Right now the roads in Houston are impassable and there are a lot of people who are in need of help. I want to do what I can to provide whatever assistance I can to as many people as possible. Please let us know how we can help! I’m writing a series of articles to provide you with some information that might be helpful as you try to recover and rebuild in the weeks and months ahead.
It’s safe to say that most of the Houston area damage related to Hurricane Harvey is flood related. The rains just continue to batter this area and many are sleeping in makeshift shelters and relying upon the kindness of neighbors and strangers to stay safe and dry tonight. There are several things you need to know from a legal standpoint to help you recover after the flooding.
1. Homeowner’s Policies Don’t Cover Flood
Unfortunately, a lot of folks may be under the impression that their standard homeowners policy might cover flood damage, but the standard policy doesn’t.
The typical home insurance policy doesn’t cover earthquakes or floods. So a homeowner wanting coverage for either of those disasters will need to pick up separate, specific coverage against those types of disasters.
There is a 30-day waiting period between when you buy the coverage and when it kicks in. So, even if you recently purchased flood insurance, it may not provide protection for the damage from Hurricane Harvey. When a hurricane is bearing down on your area, it’s too late to get a flood policy.
2. You Might Have A Claim Against Your Insurance Agent
Despite the fact that flooding is common in this area, many of those impacted by Hurricane Harvey may not have Flood Insurance coverage, and don’t know that their Homeowner’s policy does not cover flood damages.
If you do not have flood insurance coverage, you may have a cause of action against your insurance agent if your agent failed to offer you flood insurance coverage.
If you insurance agent failed to offer this coverage, it may be an error or omission. Many insurance agents and agencies are covered by specific professional liability insurance to protect them in the event of these types of errors and omissions.
If you do not have flood insurance because your agent failed to offer it or inform you of the need for it, you might want to inquire about whether your agent has errors and omissions coverage.
3. You might be surprise what Flood Insurance Covers and Doesn’t.
What it Covers
Flood insurance does cover the building and contents inside, but it doesn’t cover the land on which the dwelling is located. There may be limited coverage for basements, crawlspaces, lower floors and enclosed floors of elevated buildings.
Dwelling coverage will cover property up to $250,000 and contents coverage insures up to $100,000 of personal property.
Building coverage may cover:
- The building and its foundation
- The electrical and plumbing systems
- Major systems like central air conditioning equipment, furnaces and the hot water heater
- Some appliances such as refrigerators, cooking stoves and built-in appliances like dishwashers
- Permanently installed carpeting over an unfinished floor (e.g., wood, cement)
- Window blinds
- Permanently installed paneling, wallboard, bookcases and cabinets
- A detached garage (up to 10% of building property coverage)
Coverage for contents includes:
- Clothing, furniture and electronic equipment
- Portable and window air conditioners
- Portable appliances such as microwaves and dishwashers
- Carpeting that is not covered under the building coverage
- Clothes washers and dryers
- Food freezers and the food in them
- Certain valuable items such as original artwork and furs (up to $2,500)
What it doesn’t cover
There are a number of damages and expenses a flood insurance policy will not cover. These include:
- Currency, precious metals and valuable papers like stock certificates
- Damage caused by moisture, mildew or mold that could have been prevented by the homeowner or renter
- Property and items outside of the dwelling such as trees, plants, wells, septic systems, walkways, decks, patios, fences, hot tubs, seawalls and swimming pools
- Financial losses due to business interruption or loss of use of the insured property
- Most self-propelled vehicles – e.g., cars, motorcycles, four-wheelers, etc.
4. Water damage isn’t all the same
When it comes to your insurance, not all water damage is the same.
There is a big difference between a storm where your roof comes off and water comes through and a flood where the river or bayou overflows. A storm where wind caused the water damage may be covered by your homeowner’s policy where the flood waters will require a separate flood insurance policy for coverage.
Some claims may be difficult to determine or may include both kinds of damage. Make sure you understand the difference. Many times, you will have to stick to your guns with your insurance carrier if you had both types of damage as the carrier may want to attribute covered damages to an uncovered type of loss.
If you need help reviewing your insurance policy to understand the details of what is and is not covered, please call us at 713-999-9398.
5. Flood Insurance Deadlines
The first step is notification. Homeowners, renters and business owners with flood coverage should immediately report flood damage to their insurance company or agent. A claims adjuster will inspect your damages, estimate the repair costs, and send an estimate to the insurance company for review and payment approval.
As part of their claim, policyholders are required to submit a “Proof of Loss” statement which includes an estimate of the damages on both your structure and its contents. Insurance companies usually provide this form and in most cases will help you fill it out.
A “Proof of Loss” is not a release of claim, but a statement of loss facts and damages claimed.
Your claims package should be supported by photos of water in the structure and the resulting damage. You should also compile an itemized list of all flood damage and retain swatches of carpets or fabrics that were damaged if you have them. Be sure to make copies of the insurance claim, proof of loss and all other supporting documents for your own records.
An important point to keep in mind is that you do not have to accept the initial estimate of the damage prepared by the claims adjuster. All issues should be addressed with the adjuster and the company’s management. However, if you believe the claims adjuster did not address all of your flood damage in their estimate, you can file a supplemental claim for the additional damages. For example, there may have been hidden damage not detected by the claims adjuster during their property inspection.
Be aware there are strict deadlines for filing flood insurance claims. Regardless of whether you agree with the claims adjuster’s estimate, your proof of loss statement must be submitted to the insurance company within 60 days.
The insurance company will usually provide a proof of loss form and in most cases prepare the form based on the adjuster's estimate of repair.
A policyholder who disagrees with the final figures can submit their own "proof of loss" or when signing and returning the company's proof of loss, simply send a letter outlining why they do not agree with the amount offered by the company. It is essential the document be sent to the insurance company because until the proof of loss package is received, the insurance company will be unable to issue a payment to the insured.
An important point to keep in mind is that the policyholder does not have to accept the initial estimate of the damage prepared by a claims adjuster. If the policyholder believes the claims adjuster did not cover all damages in the estimate, then the policyholder can make claim for the additional damages.
For example, there may have been hidden damage not detected by the claims adjuster during the inspection. Regardless of whether the policyholder agrees with the claims adjuster's estimate of damages, the proof of loss must still be submitted within 60 days of the loss.