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Home / Insurance / National Flood Insurance Adjustment Disputes – Where the Rubber Meets the Road | Property Insurance Protection Law Blog

National Flood Insurance Adjustment Disputes – Where the Rubber Meets the Road | Property Insurance Protection Law Blog



National Flood Insurance adjustments can be extremely frustrating 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 that were reopened and eventually paid years late because those overseeing the program and its lawyers balked and refused to pay claims for the dumbest wrong reasons.

Will Hurricane Ian be a repeat of Superstorm Sandy? It’s too early to tell, but I’m taking calls from those who are already unhappy with incorrect claim decisions.

A misconception repeated in this hurricane is that the flood adjuster will only agree to pay for property that is physically affected by the floodwaters. This is incorrect. An example of a recent denial of any payment for the kitchen worktops that are not affected by the flood water but are physically attached to folded kitchen cabinets. I guess flood policy holders will have new kitchen cabinets without tops

The typical adjustment pays for the replacement of the tops. In some cases, if it can be accomplished and is less expensive, the tops can be removed and then reattached. The price to remove and put back is often much greater than just agreeing to replace the cabinets with the tops. But something is paid for the countertops.

The point is, this is just one example repeated thousands of times with outrageous results. I can̵

7;t believe that national flood managers can’t find people who are enlightened enough to understand this basic concept or educators who can teach adjusters so they can better understand. If they teach otherwise, we need Congress and the executive branch to step in and reform the system.

James Purcell is an accountant with extensive experience. He sent me a number of current flood-related claims issues as examples he encounters in the field where he believes flood adjusters are wrongly refusing to pay Hurricane Ian claims:

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

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

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

Flood Adjuster: We cannot refer to previous Sandy-based bulletins for 2022 claims.

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

Flood Adjuster: Our estimating program (Xactimate) does not allow for a sliding door of this size. A signed contractor estimate will be required to adjust for costs incurred.

Policyholder: Floor tiles that are replaced are calculated as ceramic material; tiles are actually stone.

Flood Adjuster: Xactimate does not have a range of flagstone floors, this can be remedied with a signed contractor estimate stating willingness, type and quality.

(JAMES: Xactimate has a whole category for stone floors (FCS)…)

Policyholder: IA replaced floor tiles due to “the crawl space underneath was flooded past the sub-floor” but did not replace the plywood sub-floor (IA is only included to clean the sub-floor).

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

(JAMES: How do you “photograph” Category 3 water damage on a plywood subfloor? Microscope?)

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

Flood Adjuster: The premium grade can be remedied with a signed contractor’s estimate specifying the level, type and grade. Photos of the mortar bed will be needed, the Xactimate price for the mortar bed includes lath and we need to show that this was the pre-existing installation rather than thin sets.

(JAMES Purcell: How to give a photo of mortar bed from before the flood happened?)

The National Flood Program says these flood adjusters are there to aid and assist the policyholder, but do not determine what is paid. If so, who are the people behind the curtain making these false denials? Someone is responsible for stupid field claim decisions. People get hurt because of this incompetence.

Today’s thought

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


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