FEMA Recovery

Even as the flood waters recede from your property, you should already be in contact with your agent or insurance company to start on your flood loss claim. It usually takes an adjuster a few days to get to your property, so make sure to get a time frame for when they will visit your property so that you, or someone you trust, can be present.

While you are waiting for the adjuster to arrive, you can start recording the level of damage to your property and your belongings.  Start by taking photographs of all the damaged property, including structural damage, damaged possessions, and any remaining water. Separate out the damaged items to take a full inventory including the details of each item such as the date purchased and value.  If local officials require the disposal of damaged items before your adjuster arrives, make sure to keep evidence from the damaged items (e.g. cut swatches from chairs, carpet, etc.) to provide your adjuster.

Once the adjuster arrives, they will walk through your property to evaluate the level of damage. It is important to accompany the adjuster in their walk-through so that you can clarify the scope of the loss, and to provide additional details regarding the value of the damaged property.

The National Flood Insurance Program requires that the Proof of Loss form be filed within 60 days of the flood.  This 60-day time period is non-negotiable, and if the Proof of Loss is not submitted (or is missing any required information) your claim will be denied.   The Proof of Loss form is a sworn statement that you agree with the adjuster’s valuation of the damage, and that your claim is truthful and accurate.

If you do not agree with the adjuster’s valuation, you have a limited amount of time to appeal their decision before the claim window closes. Once an adjuster has submitted his decision, they will rarely amend their report; therefore consider hiring a public adjuster to assist with your appeal. Public adjusters have special training and expertise in appraising, preparing and negotiating flood damage insurance claims. They work solely for the policyholder – not the insurance company.

For a more detailed overview on recovering from Flood Damage, read the Adjusting Today issue on “Flood: Understanding and Recovering from One of Nature’s Worst Disasters“.

The National Flood Insurance Program (NFIP) is a FEMA-sponsored program that enables property owners in participating communities to purchase flood insurance. Flood insurance is not a covered peril under a standard property insurance policy. If your property is located in a high-risk flood area and your community participates in the National Flood Insurance Program, chances are good that you have a flood insurance policy.

Even if you don’t live in a designated high-risk area, your property may be at risk. Do you know if you live in a community that participates in the NFIP and if you are eligible to purchase flood insurance through this Program? The One-Step Flood Risk Profile on Floodsmart.gov determines your flood risk based on your property’s location and estimates your premium based on your risk profile.

In moderate-to-low risk areas, the risk of flooding is reduced, although it remains a possibility. In these areas flood insurance is not required (as it is in the high-risk areas), but it is still strongly recommended for all property owners and renters. In fact, 25% of flood insurance claims come from these moderate-to-low risk areas.

Most homeowners in these low-to-moderate risk areas qualify for a Preferred Risk Policy at a much lower rate than the Standard Rated Policy. A Preferred Risk Policy offers two types of coverage: ‘Building and Contents’ or ‘Contents Only’. The Preferred Risk Policy offers multiple tiers of coverage based on the value of your property and how much coverage you require.

Before the flood waters rise, make sure you are covered!

For more on flood insurance and the National Flood Insurance Program, read the Adjusting Today issue on “Flood: Understanding and Recovering from One of Nature’s Worst Disasters“.

Repair vs. Replacement of a Facility under 44 CFR §206.226(f) (The 50 Percent Rule)

On 25 March 2009, FEMA’s update to the Disaster Assistance Policy 9524.4 regarding the 50 Percent Rule went into effect. This policy clarifies the application of 44 CFR §206.226(f) of whether a disaster-damaged facility is eligible for either repair or replacement under the provisions of the FEMA Public Assistance Program.

FEMA has outlined four conditions that define the eligible costs determinations.

(Chart courtesy of FEMA: http://www.fema.gov/government/grant/pa/9524_4.shtm)

There are two important factors to note in regards to this update:

1. FEMA staff creates the 50% repair versus replacement calculations. Therefore, it is imperative to review their work and check their assumptions and accuracy against real world costs for both repair and replacement.
2. FEMA often uses R.S. Means’ Construction Cost Estimator to determine which of the above conditions is met in regards to the 50 Percent Rule. This guide uses standard construction costs based on facility models to provide repair/replacement cost estimates for the damaged facility.  It is important to review the cost data to ensure that the facility model chosen should be the same form, function, and size as the damaged one (i.e., if the facility is a damaged library, the R.S. Means model for replacement should be a library, not a department store).

This summary of the update to Disaster Assistance Policy 9524.4 is not all-inclusive, and is only intended as an overview. If you are interested in further reading on the topic check out the Disaster Recovery Today issue entitled “Rebuilding under the FEMA Public Assistance Program – Repair? Replace? Relocate?“. This article examines how the FEMA Public Assistance Program affects the decision to repair, replace or relocate a damaged facility.

For a more thorough understanding of how this policy affects your FEMA claim, contact one of the Disaster Recovery Consultants at Adjusters International.