Jim Adler | The Tough, Smart Lawyer
By Jim Adler October 11, 2016

Hurricanes aren’t the only source of Texans’ flooding pains. Severe rains in many parts of the state have left homes swamped — and residents struggling to cover their losses via flood insurance claims.

However, homeowners insurance alone does not automatically cover flood damage. For that, special flood insurance is needed and can be vital. Between 2006 and 2015, total flood insurance claims had an average of $1.9 billion per year.

Who Has Flood Insurance?

Despite the risks, many people do not purchase flood insurance. In fact, 18 percent of homeowners aren’t even aware that their homeowners policy does not automatically include insurance for flood damage, according to Bankrate.com.

However, if you live in a Special Flood Hazard Area (SFHA) or some other area at high risk for flood damage, and if you have a federally-backed mortgage on your home, your mortgage lender should require you to have flood insurance.

Otherwise, you could suffer many thousands of dollars in damage for only a few inches of floodwater in your home, and such costs could cause you to default on your mortgage.

Without flood insurance, according to the National Flood Insurance Program, homeowners can get federal disaster assistance in the form of a loan which must be repaid with interest. A $50,000 loan at 4% interest would create a monthly payment of about $240, or $2,880 in payments for a full year. But a $100,000 flood insurance premium can cost only $33 per month, or $396 in payments for a full year.

Clearly, flood insurance is preferable as a pre-emptive element. Such insurance can be purchased as a separate flood insurance policy from your insurer or from NFIP if your community is an NFIP partner. To determine which Texas cities are partners, go to this list from FEMA, or the Federal Emergency Management Agency.

Flood Insurance Claim Payments

NFIP has paid almost $52 billion in flood insurance claims and associated expenses since 1978. But collecting on claims may be more difficult from the average insurance company, which tends to fight to keep from paying what is rightly due.

According to CNN Money, insurance companies may resist paying flood insurance claims by denying claims outright or by writing policies with legal jargon that’s hard to comprehend or include exclusions that absolve them from paying for certain damages.

Even with flood insurance, keep in mind that it may take 30 days to take effect. So don’t count on buying flood insurance just before a storm and then having it cover losses which occur before 30 days are up.

How To File a Flood Insurance Claim

As for how to file a flood insurance claim, that begins with notifying your insurance agent or company. When doing so, be sure to have your policy number and contact information for where you can be reached. An adjuster then should contact you in a few days.

You also should document your flood damage by taking photos of all damaged items and structural damages, including the height of floodwater levels. Do not throw away damaged items, but rather collect them outside the home for further evaluation by an adjuster. And wait to make repairs, if possible, until after the adjuster has seen your home.

You also should prepare a “proof of loss” statement to support your claim. You must swear to this statement’s authenticity and do so within 60 days of the flood damage. But don’t wait that long. After a flood causing widespread damage, those who contact insurers first are at the front of the line for adjusters.

What If Insurance Won’t Pay?

But what if insurance won’t pay — or won’t pay enough — for severe flood insurance claims?

Many insurance companies offer quick “low-ball” settlements which don’t provide as much money as policy owners are rightly due. Others may deny a claim entirely based on technicalities.

If that happens, you can file a complaint with your state regulator. Or you can engage a lawyer to review your denial letter and provide a strategic response.

If you then have to go to court, a court which rules in your favor may order the insurance company to pay your legal fees.

Keep all these things in mind and protect your financial future if your home suffers flood damage.

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