Is It Flood, Or Is It Water Damage?

Our office was "flooded" with calls from different Policy holders requiring assistance with their claims following the recent rain storm during December 18th and 19th. The areas included Hollywood Beach, Hallandale and Aventura. These claims range from flood waters damaging vehicles, homes and shopping centers to water intrusions from roofs, windows and wind damaged structures. While adjusting these losses, it is very important to document all of the damages, keep records of all expenses related to the loss, and most importantly take as many pictures as you possibly can of the damage. Finally, always make sure you do your absolute best to mitigate your damages in order to protect your property. This can include placing a tarp on your roof, placing fans and dehumidifiers in your home, cleaning your furniture etc. Your insurer will always want to inquire about your efforts of mitigating your damages!
 
FLOOD - This Policy covers ONLY damages caused by flood waters. The term “flood” is generally defined in the Policy. NFIP (National flood Insurance Program), who is funded by the Federal Government offers the following definition: “A flood is excess water that effects an area either greater than two acres or more than two properties”. In simple English this means that if your home is sitting on less than two acres of land and your home is the only one in the neighborhood that sustained damage from rising water, it is not likely that your carrier will pay your claim.

HOMEOWNER - This Policy will generally cover a roof leak. It is not likely that this will cover “FLOOD” Under “Exclusions” you may find the term “flood”

COMMERCIAL PROPERTY - This Policy is designed primarily for Business Owners, Investors, Rental building owners etc. - These policies generally do not cover Flood. In these policies there are specific exclusions for damages caused by water. Since those Policies include many different conditions, exclusions and endorsements, I highly recommend speaking with a Public Adjuster or an Attorney (one that specializes in this field) about your claim

AUTO - COMPREHENSIVE POLICY - This Policy should pay for your claim caused by flood to your vehicle. It is highly recommended to tow your car (do not drive it) to an authorized dealer service repair shop. Since it is a possibility that water damaged the electrical system and wiring in your car, the risk of a fire is very possible, as such, tow your car to this repair center to diagnose and write up an estimate of repair to submit to your carrier. Generally, most carriers should agree with the recommendation of an reputable authorized dealer repair shop.

CASE IN POINT - John and Laurie live in Hallandale Beach. Their home was damaged during this rain storm on December 18. The Water leaked into their living room and dining room from the roof, through their ceiling damaging their walls, floors and furniture. After several hours of pounding rain, flood waters came into the home through the door openings. This added more damage to their home. While adjusting the loss, we prepared two different estimates, one to present to the flood carrier, the other to the Homeowner Insurer. This is how we separated the two claims: The flood estimate of damages included the damage to the flooring, baseboards, drywall and paint. However, this was limited to up to 4 feet from the ground. Since the wall paint is all continuous and can not be matched, the walls will have to be painted all the way up to the ceiling which is approx. 12’ from the ground. As such, the “excess” was estimated as part of the Homeowner claim. This Homeowner claim caused by the roof leak should pay for damages caused to the ceiling, Insulation, light fixtures, paint from the ceiling up to the 4 foot mark established by the flood estimate. This system prevents any duplication of scope items to be presented. John and Laurie sustained drying invoices in the amount of $3,000.00. This amount was divided in half and each respective carrier was presented with fifty percent of these damages. Since the contents were damaged by both, ceiling and flood, this too was split in half and presented that way to the carrier. These estimates should be shared with all adjusters and insurance companies involved to avoid The appearance of impropriety. Finally, I would like to encourage you to write me with your questions, comments, or share your claim story with us. Our advice is free! 

Citizens Insurance Policy Changes

A significant change in Citizens Insurance Policies will take effect On January 2010 that will impact Policy Holders state wide. This change has to do with the fact that this state-funded carrier has decided to revise the "Appraisal clause" language in their policies.  This revision can have a detremental effect on both Insurers, PolicyHolders and all tax paying Floridians.

In summary, this revision will give Citizens Insurance the right to refuse "Appraisal", limit the "Appraisal" and set the parameters of which this "Appraisal" will be conducted.  For those of you who are not familiar with this term, I will explain:  When a Policy Holder and the Insurer can not agree on the value of the loss (which happens quite often), under the current endorsement on the HO-3 Policy, either side may make a written demand for Appraisal.  The responding party will normally have twenty days to respond with their appraiser name and contact information. Once both appraisers have reached an impass, They waill both select a competent and impartial Umpire to settle their differences. This Umpire is generally chosen within 15 days of the Appraisers' Initial contact.  This Umpire generally gets involved in the event both appraisers can not agree on the value of the loss.  After all documents and estimates have been submitted to this Umpire, the Umpire then will issue an "Appraisal Award" reflecting his position of the loss.  This award will be given to both appraisers for their consideration and as a result, at least one will agree to sign this award.  Two signatures constitute an agreed value amount of the loss.

As you can see, this is a very fair process where both Policy Holder and Insurer have an opportuinity to bring their positions to a neutral party of their choice to settle their matters of differences.

Today, while this endorsement is still in effect, and there is a disagreement with Citizens Insurance Corp, a Policy Holder can simply ask for an appraisal of the loss, and the Insurer will most likely accept it.  However, once this new endorsement takes effect, this Policy Holder may ask for an appraisal of the loss only to tackle a resistance based on new Policy Language by the carrier.  In the event this happens, this Insured may have to retain counsel.  Taking into consideration that the average attorney will charge 30% plus costs to represent the insured, or a hefty retainer will have to be paid by this Insured, this will cause a significant increase in the financial burden this Policy Holder will have to face.  As it is, this Policy Holder suffered a "loss". By hiring an attorney this "loss" may increase significantly.  Most attorneys utilize the services of Public Adjusters.  I often am asked to assist different attorneys in estimating costs of damages, site inspections and appraising the loss.  Obviously, this is an extra expense to the Insured.

In some cases an attorneys involvment is highly recommended and even required.  However, in most cases, this issue of Appraisal can be handled by a good Appraiser and/or Public Adjuster.

With the recent economy and the mortgage crisis, some reports indicate that the court systems are flooded with new cases of Bankruptcy, Foreclosures and lawsuits.  Now with the new changes in Citizens' Policy, this problem could be significantly aggravated.  In the long run this will end up costing an already struggling tax payereven more than He or She imagined.  If you have any questions, please contact me for a free of charge consultaion.