Here is what we are seeing and advice on how property owners can handle and avoid potential problems with their flood and wind insurance claims.  As tremendous losses continue to mount, many recovering from Hurricane Ian are realizing their insurance companies are not paying policy limits for flood and wind claims, as reported by the Cape Coral Breeze in an article on October 14, 2022. Officials told a crowd of several dozen to stay persistent in working with National Flood insurance companies on getting reimbursement and compensation for work to repair homes, while other owners we have spoken to have already received denial letters. 

This is the reality of the insurance industry, post-disaster.  National news media is gone and numb owners are starting to realize what lies ahead to prove their insurance claims and receive a fair claim recovery. 

While many still wait for the insurance company to send out an adjuster, the insurance companies are catching up and now requesting the following documentation from owners or their representatives:

• Receipts or invoices for any recent work/repair completed to the property. All receipts should note what repairs were completed, who completed the repairs, verifiable contact information including address, tax ID, and when the repairs were completed.
• Receipts for any payments made by owners to date.
• Photos of the damage prior to any mitigation and prior to inspection.
• Any photos taken by a loss consultant, contractor, insured, or their representative(s).
• Any mitigation documentation, including, but not limited to, the company that performed the mitigation, their estimate, photos, moisture readings, dry logs and contract.
• HVAC/Plumbing/Roof repair/replacement receipt

As far as general advice that I can pass along. At this point, owners need to understand that the burden of proving damages is on them to tell their insurance companies.  Documentation as well as separating wind and flood damages is key. You must be patient. Don’t be in a hurry to fix and make things all better again. While you have a duty to mitigate any further damage, make sure to follow the insurance company process of repairing your property by getting approvals (in writing) before making repairs.    

The same thing applies when it comes to mitigation requirements for your insured property.  Listen closely to what people that are making the promises are saying. Does it make sense to plug in truckloads of dryers and dehumidifiers and poke holes in your ceilings and walls without understanding the scope and price of the work being done? Does it make sense to run up a big bill for dryers and blowers when wet and damaged drywall will likely have to be thrown out anyway? And those policyholders who don’t have the right insurance coverage may end up paying all costs.

Wet-building materials should be removed from inside the property. However, if insurance is in place, do not throw anything away. Wait until your insurance adjuster gives the OK. When you do dispose of property, set it outside before the looters or others come by to go through your stuff.  Take photos, lots of photos and make sure they are preserved for future reference. If you do not have insurance, talk with a qualified financial professional. You may have a tax deduction for an uninsured casualty loss for property that was not covered by insurance.   Please remember to document and confirm everything you are told or promised in writing. Emails are a great way to confirm what someone told you to do or not to do and to ask questions or for instructions on issues about your loss. Create a claims binder for yourself and save all these communications for future reference.

Some mitigation - restoration companies who are either sent out by your insurance company or solicit you directly may tell you they will take care of everything. Please READ a restoration company’s contract BEFORE you sign it. If you do not understand the terms and conditions, seek professional help, either from a Public Adjuster or Attorney.

Labor will be short but don’t take short-cuts. Secure multiple bids.  Please consider problems of workmanship. Will they do the job correctly and did the building officials issue a final permit to allow you to occupy your home? Since a lot of damage from this storm is from flood, how did the mitigation work turn out? You also need to make sure the property was actually dried out. How much structural material was removed to allow for a proper dry out?  And finally, are costs being inflated to the point where the insurance company won’t pay? If your insurance company does not approve the mitigation work and refuses to pay it’s likely a lawsuit will arise. So pay attention to the details. With lien rights, some aggressive contractors will be smelling the money.

In addition; don’t be afraid to modify the contractor’s form. This is the type of language we’ve seen used successfully: ANY WORK PERFORMED AND BILLED TO ME MUST BE APPROVED BY MY PROPERTY INSURANCE COMPANY. MY INSURANCE COMPANY HAS THE FINAL SAY ON SCOPE AND PRICING OF THIS CLEAN UP AND THE CONTRACTOR AGREES TO ADJUST ANY SCOPE OR PRICING DISPUTES WITH MY INSURANCE COMPANY. THE CONTRACTOR AGREES THAT OTHER THAN MY DEDUCTIBLE, ANY SUMS BILLED OR OWED BY ME TO THE CONTRACTOR ARE TO BE PAID TO THE CONTRACTOR BY MY INSURANCE COMPANY, PROVIDED THE WORK MEETS MY SATISFACTION AND IS APPROVED BY THE OFFICIAL BUILDING DEPARTMENT HAVING JURISDICTION OVER THIS MATTER. EVERY EFFORT MUST BE MADE BY THE CONTRACTOR TO MEET WITH ME, MY REPRESENTATIVES AND MY INSURANCE COMPANY ADJUSTER TO FIRST AGREE ON THE SCOPE AND PRICE OF THE RESTORATION PROPOSED BY THE CONTRACTOR.

The above is not legal advice and just an observation of what we have seen people do to protect themselves. You may want to have the contract reviewed by an attorney before signing. 

Do you have flood coverage? This storm caused a lot of flooding which is a peril not covered in a standard homeowner’s insurance policy or for that matter a commercial policy. If your property experienced wind driven rain damage or water coming in from the roof, “do not” report it to your insurance company as a flood.  A flood is not covered unless you have flood insurance. A flood, for the purpose of triggering flood insurance coverage is defined as rising water and has to originate from outside of the property and meet the definition of a flood as outlined in a NFIP policy.  But a “water loss” inside of your property, which may seem like a flood at the time, is most likely covered as long as the cause is from an event inside the property and is not excluded in the exclusions sections of a property policy. In insurance speak, a comma in a sentence or a word articulated in the wrong manner can make all the difference in the world when your notice of loss is typed up and assigned to a claim handler for an initial review.

I’ll write more about flood losses in upcoming articles.