Policyholder Question about Earth Movement Foundation Damage Caused by Flood
Q. I’m looking for help/guidance. A flood event heaved thin crawlspace slurry pour, rotated a concrete support pier and then pushed the entire slurry floor down toward center of crawl and pier. A forensic engineer determined damage was pre-existing and not caused by the flood event. His report contained anecdotal evidence, supposition and was riddled with factual errors, including measurements. It also seemed to push irrelevant observations as supporting evidence as well. What can you tell me about this type of loss and my options?
A. It’s timely given all the information and problems going on in the Northeast as a result of the Super Storm Sandy flood claims as they relate to foundation damage claims.
Since you did not say what type of flood you had, I’ll assume it was from outside water intrusion. Sometimes people assume they had a flood when water soaks their house from a broken water or sewer pipe in their home. This is a different type of water loss that may be covered under a homeowner’s insurance policy. Your homeowner’s policy will not likely cover a “flood” or water event from a flood outside your home. So if your loss is a flood that occurred outside your home your recourse is to make a claim with the National Flood Insurance Program (NFIP) if you had flood coverage in place during the loss.
Of course your flood event must fall within the definition of a flood as defined in the NFIP policy. But even if you have a flood policy, it does not mean they will give you coverage from a flood. You are still subject to the NFIP policy terms and conditions. The problem you describe will likely be problematic as it sounds like you have foundation and earth movement issues.
As we have written in our Sandy Insurance Tips blog, the NFIP has taken a position that earth movement even though caused by a flooding event, is not covered. I find this a little unconscionable as clearly flood was the cause of most foundation and slab issues from Sandy flooding. It becomes even more so, due to the fact that the NFIP does cover damage to slabs and foundations when there is erosion of earth under the foundation or if hydrostatic pressure from water pushing upward on a slab or foundation is the cause of the loss. But “earth movement” downward also called “settlement” seems to be the line in the sand for the NFIP program.
The reason this makes no sense to me is that when water weighting eight pounds a gallon which may be two feet or higher during a flood event sits on a slab, it pushes down on the slab and cracks the foundation. That type of loss is not covered. Why do they make this distinction? I can only guess, but it may be that most private and for profit insurance companies have written forms which have been approved by your state insurance regulators that excluded earth movement losses. I know there is currently a lot of pushback from consumers and their elected officials on this issue in Sandy matters, but I doubt the NFIP will change course since it is federally funded and authorized by Congress that currently is billions of dollars in the red from recent catastrophic events. But one never knows. Since this issue is impacting so many property owners on the East Coast, you should keep your eyes on any news of potential assistance or changes. We certainly will.
If you have an NFIP flood event, be sure to file a proof of loss within sixty days of the loss or if an extension is granted, within the extended period. Also file an appeal of your claim denial and write your Congressional Representative. Sometimes a re-inspector may see things differently than a field adjuster that was originally assigned to your file. Best of Luck
If you have questions regarding any property insurance related issues that Superstorm Sandy may cause please call 800.321.4488 or contact us to submit a question to one of our public adjuster or insurance claim experts.