Texas Flood Insurance –The Basics

Texas Flood Claim Appeals:  Obtaining a Fair Settlement

The overall losses imposed by Hurricane Harvey and the other storms still forming will almost certainly set new records. At present, at least one data analytics firm that forecasts natural disaster losses has issued a preliminary estimate indicating that Houston area homeowners may suffer losses equaling $30 billion. However, only about 40 percent of that amount will be covered by insurance — with the federal government picking up the tab for most of it.

How Most Flood Insurance is Handled in Texas

While a small number of private insurance companies are underwriting flood insurance today (often providing an optional rider to your homeowner’s coverage), most stopped doing so long ago since they could not charge high enough premiums to make it a profitable endeavor. Instead, most Texas homeowners are only able to obtain a flood insurance policy through the National Flood Insurance Program (NFIP) that’s run by the Federal Emergency Management Agency (FEMA).

Since homeowner policies don’t cover windstorm and hail damage for those living in this state’s major flood zones like the Houston area, some people also purchase Texas Windstorm Insurance Association (TWIA) coverage to help with those types of losses. However, a Washington Post study indicates that as few as 17% of Houston homeowners may have any flood insurance.

Should you be among the small percentage of homeowners with an NFIP policy or hold one that covers your business property, it’s critical to move forward now and get your NFIP claim filed. However, you need to know that it’s fairly common for these types of claim to be denied – or to be offered a very small amount for your actual losses. Once your claim has been turned down, you’ll then need to work closely with the local insurance representative who sold you the policy on behalf of FEMA to be sure it was processed properly.

Deciding Whether to Appeal FEMA’s Decision About Your NFIP Coverage

Once you’re certain that all pertinent paperwork was fully examined by FEMA when it denied all or part of your NFIP claim, you’ll need to decide whether to file a formal appeal or pursue other possible remedies. Since making the right decision requires a clear understanding of each option – and because you only have 12 months to appeal the decision, it’s often best to speak with your Houston business law attorney who can help you weigh all of your options before moving forward.

In some cases, perhaps to minimize the time involved in obtaining the maximum recovery available, flood insurance policy holders may want to simply obtain a formal appraisal of their covered loss. This option is often chosen when your insurer is agreeing that a covered loss occurred – but is disagreeing with you about the correct amount that should be paid for your loss.

Keep in mind that if you choose this path, FEMA’s website states that you cannot then appeal the FEMA decision if you still don’t like the results. As you can see, you need to fully understand what you’re risking, regardless of the path you choose.

What is Covered (and Not Covered) Under A Flood Policy

The NFIP covers “direct physical damage by flood to your building and/or personal property, also known as contents.” The Standard Flood Insurance Policy (SFIP) is a single-peril (flood) policy that pays only for flood damage to your insured property, up to the policy limit which is $250,000 for a residential policy.

Covered Building Property:

-The electrical and plumbing systems

-Furnaces, water heaters, heat pumps, and sump pumps

-Refrigerators, cooking stoves, and built-in appliances such as dishwashers

-Permanently installed carpeting over an unfinished floor

-Permanently installed paneling, wallboard, bookcases, and cabinets. The damage must be directly caused by flood water. Cabinets that were not damaged by flood water are not covered, even if they match cabinets that were damaged by flood water.

-Window blinds

-Foundation walls, anchorage systems, and staircases attached to the building. There is an exclusion for “loss caused directly by earth movement even if the earth movement is caused by flood.”

-A detached garage, used for limited storage or parking. Up to 10 percent of the building coverage limit can be used, but will reduce the total amount of building coverage available.

-Solar energy equipment, and well water tanks and pumps

Covered Personal Property – Contents:

-Personal belongings such as clothing, furniture, and electronic equipment

– Curtains

-Portable and window air conditioners (easily moved or relocated)

-Portable microwave ovens and portable dishwashers

-Carpets not included in building coverage (carpet installed over wood floors, etc.)

-Clothes washers and dryers

-Certain valuable items such as original artwork and furs (up to $2,500)

-Food freezers and the food in them (but not refrigerators)

Not Covered for Building or Personal Property:

-Damage caused by moisture, mildew, or mold that could have been avoided by the property owner or which are not attributable to the flood

-Damage caused by earth movement, even if the earth movement is caused by flood

-Additional living expenses, such as temporary housing, while the building is being repaired or is unable to be occupied

-Property and belongings outside of an insured building such as trees, plants, wells, septic systems, walks, decks, patios, fences, seawalls, hot tubs, and swimming pools

 

Obtaining Timely Advice After a Flood is Critical

Please remember that our firm is here to help you as you try to obtain a fair settlement for your flood losses so you can quickly repair or rebuild your damaged property. (Should you be among those without any insurance coverage, you may want to visit this government website provided for this needing emergency assistance.)

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