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Sha'Ron James


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After Irma: Why are 90% of flood claims being denied?

 

Date: October 16, 2017
Source: Palm Beach Post
Author:  Charles Elmore

 

Nine out of 10 flood claims resolved by the National Flood Insurance Program in the early going after Hurricane Irma have been closed without payment, federal records provided to Florida officials show.

Why? The Palm Beach Post asked the Federal Emergency Management Agency.

Nearly $100 million in payments have been approved on payable flood claims, said Greta Richardson, claims branch chief with FEMA in Washington, D.C.

But it’s still early in the process, she said, and payable claims tend to take longer to resolve than cases where officials have determined there was no qualifying damage.

“Irma was a hurricane that brought in a lot of wind damage,” Richardson said, though some areas of Florida did experience flooding as well. In contrast, Hurricane Harvey in Texas did much of its damage from flooding.

NFIP policies generally cover flooding from the ground up, such as storm surge or heavy rain causing local waterways to overflow. Standard homeowner policies tend to cover damage from, say, wind blowing off a piece of the roof and rain coming in from above.

If homeowners are not entirely sure of the cause of damage, they might file claims under both their standard home and flood policies just to be sure.

According to data federal officials gave Florida Insurance Commissioner David Altmaier last week, 195 NFIP claims administered by private partners in a Write Your Own program have been closed with payment after Irma, compared to 1,936 resolved without payment.

But there are still plenty of claims to be worked out. Fewer than 8 percent of the 24,316 flood claims mentioned had been resolved at that stage. Records provided to Altmaier showed more than $72 million in payments had been made at the time.

The average claim closed with payment was for more than $25,000.

FEMA officials urged Florida residents to buy flood coverage, because flooding is not covered in standard home insurance policies. Lenders require flood policies in certain high-risk zones, but it’s up to homeowners to make the choice in other cases. Florida has the largest share of the nation’s roughly 5 million NFIP policies, including more than 100,000 in Palm Beach County.

Most flood policies come from the federal program, though a limited number of private insurers offer such policies.

Out of 1,419 private flood claims filed so far after Irma, 269 have been closed with payment and 92 have been closed without payment, with more than 1,000 still open, state records show.