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Law \ Legal

National Flood Insurance Adjustment Disputes—Where the Rubber Meets the Road


National Flood Insurance adjustments can be extraordinarily maddening for people trying to get a fair adjustment. For example, the Superstorm Sandy flood adjustment fiasco led to a Congressional investigation and thousands of flood claims being re-opened and eventually paid years late because those overseeing the program and its attorneys nitpicked and refused to pay claims for the stupidest wrongful reasons.

Will Hurricane Ian be a repeat of Superstorm Sandy? It is too early to tell, but I am fielding calls from those that are already disgruntled with wrongful claims decisions.

One wrongful notion being repeated in this hurricane is that the flood adjuster will only agree to pay for property that is physically touched by the flood waters. This is incorrect. However, a recent denial of any payment for the kitchen counter tops not touched by the flood waters but are physically attached to folded kitchen cabinets serves as an example. I guess flood policyholders will have new kitchen cabinets sans the tops

The typical adjustment pays for the replacement of the tops. In some cases, if it can be accomplished and is less costly, the tops can be removed and then re-attached. The price to remove and re-attach is often much greater than just agreeing to replace the cabinets with the tops. But something is paid for the counter tops.

The point is that this is just one example that is repeated thousands of times with infuriating results. I cannot believe that national flood managers cannot find people enlightened enough to understand this basic concept or trainers that can teach adjusters so they can better understand. If they are teaching otherwise, we need Congress and the Executive Branch to step in and reform the system.

James Purcell is an estimator with considerable experience. He sent me a number of current flood related claims issues as examples he is encountering in the field where he believes flood adjusters are wrongfully refusing to pay Hurricane Ian claims:

Policyholder: Electrical wiring in crawl space was flooded with salt water (Photos provided)

Flood Adjuster: Can be addressed in a supplement with an itemized electrician estimate signed by the insured and the contractor.

Policyholder: Wall base plate and fasteners flooded with saltwater requiring re-nailing per Flood Bulletin W-13027

Flood Adjuster: We cannot refer to Prior Sandy Based Bulletins for 2022 claims.

Policyholder: Flood adjuster included replacement for standard grade 6’ x 6’8” sliding patio door; actual damaged door is a premium grade (PGT) door, sized 11’ x 8’ and impact rated. (Photos of door and manufacturer label provided)

Flood Adjuster: Our estimating software (Xactimate) does not allow for a sliding door of this size. A signed contractor estimate will be needed to adjuster for incurred cost.

Policyholder: Floor tile being replaced is estimated as ceramic material; tile is actually stone.

Flood Adjuster: Xactimate does not have a stone floor line item, this can be addressed with a signed contractor estimate stating like, kind, and quality.

(JAMES: Xactimate has an entire category for stone flooring (FCS)……)

Policyholder: IA replaced floor tile due to ‘crawlspace below was flooded up past subfloor’ but did not replace the plywood subflooring (IA included to clean subflooring only).

Flood Adjuster: The FEMA Flood policy requires documentation of damage due to flood. Please submit in photos of the subfloor showing damage.

(JAMES: How does one ‘photograph’ Category 3 water damage to a plywood subfloor? Microscope?)

Policyholder: Flood adjuster agreed to replace floor tile due to using standard grade tile installed with thin set; actual tile installed is a premium grade 18” tile installed in a mortar bed. (Photos provided)

Flood Adjuster: Premium grade can be addressed with a signed contractor estimate stating like, kind, and quality. Photos of the mortar bed will be needed, Xactimate pricing for mortar bed includes lath and we have to show this was the pre-existing installation in lieu of thin set.

(JAMES Purcell : How does one provide a photo of mortar bed from before the flood occurred?)

The National Flood Program says that these flood adjusters are there to help and aid the policyholder, but do not determine what is paid. If so, then who are the people behind the curtain making these wrongful denials? Somebody is responsible for stupid field claims decisions. People are being harmed because of this incompetence.

Thought For The Day

Your most unhappy customers are your greatest source of learning.
—Bill Gates



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