Earth Movement, Foundation Damage Caused by Panhandle Flooding, Is it Covered?
Property owners in the Pensacola, Destin, Gulf Breeze and the Ft. Walton Beach areas may be surprised to find that their flood claim for foundation damage is denied because the NFIP says the damage is caused by earth movement; even though the earth movement was caused by flood waters! Before I discuss this, let me remind any reader that each loss is fact specific to that property. You may have two homes or commercial buildings side-by-side in close proximity to each other and the loss conditions from the same insured event may vary.
As to the settlement, foundation issue, most property insurance policies have exclusions for ground settlement even if caused by a covered loss. As ground settlement has been so problematic in Florida over the years, the legislature passed a law many years ago that required insurance companies to cover sinkhole damage, the ultimate settlement and foundation problem. As an aside, this coverage has mostly been gutted by recent legislative action (think strong insurance company lobbyists) that for all practical purposes does not exist now unless the consumer pays significantly more premium.
But back to the flood foundation settlement question, during Superstorm Sandy, clients whose homes clearly had foundation damage due to four feet of water sitting on top of the concrete slab (remember each gallon of water weighs 8 pounds), so you can image the tremendous weight pushing down on the slab and foundation. In our cases, the resulting damage to the slabs (especially if the radiant heating strips were in the slab) was paid for. In another loss in Long Island where the dirt washed out from under the slab, NFIP paid to replace the dirt under the slab.
Another recent case from Tropical Strom Debby in Florida last year resulted in our clients getting paid for the complete concrete slab due to hydrostatic pressure pushing up the slab in a dome shape. Flood also paid for patching cracks in the foundation on that loss.
I have had cases in the past, most notably in Hurricane Opal in 1995 where foundation issues were addressed by the NFIP. In these examples where sand was washed away from under the foundation along buildings on the beachfront highway, flood did pay to grout the voids under the concrete slab and foundation with concrete.
In matters like this it may be advisable for policyholders to get a structural engineer or public adjuster involved to give an opinion. Sometimes a trained and experienced professional can identify technical issues that an untrained eye will not see to support a claim payment.
Finally the National Flood Program is a Federal program. Officials in Washington write the rules and they can change them if enough political pressure is brought to bear. The people I have worked with in senior positions at NFIP are good, decent individuals and as this is a non-profit program, I’m sure they want to do right for struggling flood victims. But remember, Congress makes the rules and the troops have to follow their directives. Finally, people should not give up. Have a professional look at the loss. Who knows, a different perspective may shine some light on what appears to be much needed coverage and result in claim dollars to properly fix the damage.
If you have questions regarding any property insurance related issues please call 800.321.4488 or contact us to submit a question to one of our public adjuster claim experts.
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