It will be weeks before damage estimates from Hurricane Harvey are finalized, but there is no doubt that insurers will see figures in the billions of dollars.
After Hurricane Katrina, the National Flood Insurance Program (NFIP), a federal program managed by the U.S. Federal Emergency Management Agency (FEMA), experienced more than $15 billion in losses in Louisiana and Mississippi.
For the first five months of 2017, the average claim payment for a flood loss was $24,698. CoreLogic, a global property information and analytics firm, conducted an analysis that found 52% of commercial and residential properties in the Houston metro area are at a "high" or "moderate" risk of flooding.
For homeowners and renters impacted by Hurricane Harvey, it will be important to document the loss and file a claim with their insurer or the NFIP, if they have the appropriate coverage. Here are some things to consider:
While a homeowners insurance policy will cover a number of specific perils, a standard policy will not provide coverage for flood damage. It may provide some coverage for rain or wind, but flooding from overflowing rivers and streets will not be covered.
1. What does flood insurance cover?
Flood insurance covers both the building and contents inside, but it doesn’t cover the land the dwelling is located on. There may be limited coverage for basements, crawlspaces, lower floors and enclosed floors of elevated buildings.
Dwelling coverage will cover property up to $250,000 and contents coverage insures up to $100,000 of personal property. Flood insurance is not a valued policy and does not pay more than the policy limit for any losses.
Building coverage includes:
The building and its foundation.
The electrical and plumbing systems.
Major systems like central air conditioning equipment, furnaces and the hot water heater
Some appliances such as refrigerators, cooking stoves and built-in appliances like dishwashers.
Permanently installed carpeting over an unfinished floor (e.g., wood, cement).
Permanently installed paneling, wallboard, bookcases and cabinets.
A detached garage (up to 10% of building property coverage).
Coverage for contents includes:
Clothing, furniture and electronic equipment.
Portable and window air conditioners.
Portable appliances such as microwaves and dishwashers.
Carpeting that is not covered under the building coverage
Clothes washers and dryers.
Food freezers and the food in them.
Certain valuable items such as original artwork and furs (up to $2,500).
2. What it doesn't cover
There are a number of damages and expenses a flood insurance policy will not cover. These include:
Currency, precious metals and valuable papers like stock certificates.
Damage caused by moisture, mildew or mold that could have been prevented by the homeowner or renter.
Property and items outside of the dwelling such as trees, plants, wells, septic systems, walkways, decks, patios, fences, hot tubs, seawalls and swimming pools.
Financial losses due to business interruption or loss of use of the insured property.
Most self-propelled vehicles — e.g., cars, motorcycles, four-wheelers, etc.
Damage from sewer backups.
3. File your flood claim as soon as possible
Individuals or businesses with a flood insurance policy should file a claim as quickly as possible if they sustain flood damage. Since there has been an official Presidential Disaster Declaration, homeowners may be eligible for assistance from other sources such as FEMA, the U.S. Small Business Administration or even some state or private organizations.
Residents who register for disaster assistance may be eligible for help with temporary housing, funding for home repairs, and help with home replacement or permanent housing construction.
When contacting the insurer, make sure you have the name of the insurance company for the broker or agent, your policy number, and a phone number or email address where you can be reached regarding the claim. Once you have filed your claim, keep careful notes about who you spoke to, when and what was discussed in case any questions arise later on in the process.
4. Documentation matters
A thorough record of what was lost or damaged will be one of the most important aspects of your insurance claim. Once allowed back into your home or business, take photographs of all damaged property — both personal contents and structural damage, standing floodwater, or visible flood levels on walls or furniture.
Take photos of large ticket replacement items that are purchased such as televisions or appliances, as well as the receipts as proof of purchase for the claim. The more documentation you have, the easier it will be to substantiate the claim.
5. Beware of fly-by-night contractors
Before engaging any contractors, ensure that they have good references and are insured in case there are any errors or injuries while they are on your property. Reputable contractors will not request full payment up front before any work is completed.
Soules Insurance Agency
Filing a claim takes time and is a process. Many insurers may be able to provide some assistance for immediate living expenses when the claim is initially filed. Make sure to track all expenses related to your insurance claim — housing expenses, meals, replacement items, medications, clothing and the like. If you have additional questions, ask an insurance representative at Soules Insurance or check out some of the resources below.
Source: AUG 29, 2017 | BY PATRICIA L. HARMAN, PROPERTYCASUALTY360.COM