My Insurance Company Denied My Property Insurance Claim, Now What?

It can happen to even the most prepared policyholder.

You suffered property damage from wind, hail, fire or a catastrophic natural disaster. As a policyholder, you file the claim and expect to receive the money needed for repairs. Even home and business owners who faithfully pay their premiums can find themselves in the unexpected situation of a denied property insurance claim.

It is no secret that insurance companies do not like to pay out claims—especially when the damage is extensive and costly. They will use any excuse possible to not pay a claim or to minimize the amount paid. Insurance companies can make policyholders feel as if they have no choice but to accept their decision. This is simply untrue.

While the insurance process for damaged property can be complex and time-consuming, policyholders should not forfeit their property rights and accept less than they are due.

Under the Texas Insurance Code, policyholders have certain rights. Insurance companies have denied many rightful insurance claims. When this denial happens, policyholders should seek professional help.

An experience attorney can help you evaluate your claim, make sure that your settlement is fair and, if necessary, take legal action so you can receive what you are rightfully owed. If your claim has been denied or underpaid, or you have been waiting an unreasonable amount of time to receive payment, it is important to be proactive and take action.

If your insurance claim has been denied, do not despair. Follow these steps and contact the Fitts Law firm for a free consultation and review of your claim.

Find out why your property insurance claim was denied

Responsible home and businessowners who diligently pay their insurance premiums are often shocked to learn that the insurance company has denied their claim. After paying premiums for years, policyholders ask simply that the insurance company provide coverage for the loss. However, insurance companies do not consider customer loyalty or timely premium payments when denying claims.

Insurance companies are for-profit business that can be an extremely profitable. They are in the business of making money. It is always in the best interest of the insurance company to pay its policyholders as little as possible. This does not mean that all insurance companies are out to take advantage of policyholders, but it does mean that discrepancies in costs often occur between the policyholder and the insurer.

Additionally, every property insurance policy is different. While some policies may exclude certain types of damage, more robust coverage typically contains less exclusions. Some policies pay the replacement cost value of your damages, while some only pay the depreciated value of your damages. If your property damage claim is denied, find out if the type of damage was excluded from your insurance coverage policy and what type of policy you have.

Another common reason for denied claims is insufficient evidence of the damage. It is crucial to keep a thorough record of any damage, repair estimates and proof of purchases.

Other reasons for denial may include: construction defects (e.g. if the home builder failed to properly insulate your home’s walls); pre-existing damage; false statements by policyholders; and failing to file a claim in a timely manner.

Speak with your insurance company

If your insurance company has denied your claim, one of the easiest steps you can take is to contact your claims adjuster and find out why. By listening to the insurance company, you can figure out their line of reasoning for your denied claim. It is always possible that the claim was wrongfully denied, but you need to communicate with your insurance to understand what your policy covers and the basis for the denial.

Before speaking with your insurance company, you should always remember to document all communications in writing.

If your insurance adjuster or agent, or another representative from the insurance company, tells you something over the phone, ask to receive that statement in writing as well. Documentation is crucial for the insurance process—especially if your claim requires further legal action.

When reaching out to the insurance company, remember to be polite. Like any business, insurance companies can make mistakes. Be respectful. Ask for a reevaluation or more detailed explanation of the claim denial.

If insufficient evidence was the reason they denied the claim, you can provide additional documentation. You should cooperate in the insurance company’s investigation of your claim, it is required by most policies.

In some cases, a professional attorney may be the best person to help you communicate with your insurance company. Oftentimes, these professionals know the right questions to ask and can advocate for the policyholder more effectively.

What about the appraisal process?

When the policyholder and insurer cannot decide on the dollar amount of the property damage, the appraisal process allows each side to have an independent appraiser. The appraisers from each side meet, assess the damages and try to agree on the claim amount. If they are unable to agree, they select an umpire who makes a decision and determines the amount of the damages.

The appraisal process is an option under the insurance policy, however the insurance policy is written by the insurance company, so it is important to note that the process may not always solve the claim value dispute in your favor. This process is unpredictable and only an option when the insurance company and policyholder disagree about the specific value of the property damage. If your insurance company is denying your claim outright, the disagreement is about your insurance coverage. Therefore, the appraisal process is not a viable option.

For example, if your home’s roof was damaged in a hail storm, and you needed $10,000 to fix your roof while the insurance company believes you only need $5,000, you could enter the appraisal process to try and receive a higher claim amount. If the insurance company denied your property insurance claim because of an improper roof installation, the appraisal process would not be an option.

The appraisal process is just one option open to policyholders in certain cases.

Contact an attorney and notify the insurance company of your disagreement

Just because your denied claim is not eligible for the appraisal process, does not mean that you are out of options as a policyholder.

You have the option to file a notice of disagreement with your insurance company, so they can reassess your claim. If you choose to go this route, make sure you contact an attorney who can assist in the investigation of your claim and file the notice, including all the documentation and any additional evidence regarding your claim.

You also have the right to hire an independent engineer or inspector. When insurance companies keep insurance inspectors and engineers on a retainer, these people are not working on behalf of the policyholder. They may cut corners during the inspection or not investigate the damages as needed to fully assess the damage. Consequently, an engineer who conducts an independent assessment without payment from the insurance company may have a different opinion on the extent of property damages.

Regardless of which steps you choose to take, an experienced attorney can help explain your best options and decide if legal recourse is worth considering.

In some, though not all, cases, the legal system provides the best opportunity for a policyholder to receive their full claim amount.

Especially in cases involving an outright denied insurance claim, filing a suit and beginning the legal process can be the only recourse.

Contact the experienced attorneys at Fitts Law Firm today. Our team has handled hundreds of denied property insurance claims over the years. We are well-versed in the Texas Insurance Code and have helped policyholders with damaged homes and businesses receive what they are rightfully owed by their insurance company.

We want to fight to make it right. Fill out the form below to receive a free denied insurance claim consultation.

3 Steps for Policyholders with Harvey Claims to Take Before the August 25th Deadline

All policyholders should know that the deadline to submit a Proof of Loss form for a Harvey flood insurance claim is August 25, 2018. In just a few short weeks, any policyholder who has filed a flood insurance claim will not be able to submit a supplemental Proof of Loss or file an appeal for a potentially underpaid or wrongfully denied claim.

Policyholders file a flood insurance claim after a flood and typically have 60 days after the date of loss to file a Proof of Loss. This form is a sworn statement from the policyholder stating the amount of money needed to repair the damage. The Proof of Loss also requires additional documentation showing the property lost or damaged by flooding.

Hurricane Harvey is one of the worst natural disasters to ever hit southeast Texas. Thousands of homeowners and businesses faced nearly irreparable damage. To date, policyholders have filed more than 91,000 insurance claim while FEMA has paid over $8 billion in claims.

In the aftermath of the storm, FEMA chose to extend the 60-day deadline to 365 days. This extension is common after natural disasters when many policyholders face an extraordinary amount of damage.

Flood insurance policyholders must not miss this deadline. If a policyholder has yet to file a supplemental Proof of Loss (to submit additional damages after the initial claim and Proof of Loss has been filed), he or she will lose the right to pursue any further action like file an appeal or legally contest an underpaid or wrongfully denied claim at a later date.

Though the Proof of Loss and any additional documentation must be submitted by August 25th, policyholders are still able to dispute the claim amount or start the appeals process after the deadline if they have submitted the necessary Proof of Loss.

If you still have an open claim, or a claim that was wrongfully denied or underpaid, follow these next steps before the August 25th deadline passes by.

1. Do not delay—take action

While the 365-day extension may seem like a lot of time, flood insurance claims can be incredibly complex, not to mention time-consuming, for policyholders.

After a disaster such as Harvey, flood insurance claims are often handled by multiple insurance adjusters. These are adjusters may not be local to the area and/or may be juggling a huge case load. Consequently, policyholders can face longer wait times and unresponsive adjusters.

If you are still debating how to handle a flood insurance claim, do not delay any longer. With the August 25th deadline fast approaching, it is imperative to act as soon as possible. Even if a policyholder has a rightful claim to a higher claim amount for the flood damage, he or she will lose the ability to seek additional damages after August 25th.

Despite the many complications that can occur during the flood insurance process, the FEMA deadline is final. Policyholders must submit all Proof of Loss forms before the August 25th deadline.

Policyholders should act quickly if they have additional damages or their claim has been underpaid or wrongfully denied. They should not sign anything without speaking with an attorney with previous flood insurance claim experience who can review their case and discuss their options with them.

Regardless of what the best course of action is for a policyholder, it is vital not to waste time.

2. Collect all necessary documentation

Because the flood insurance process can be so demanding and go on for months, it is important for policyholders to gather as much documentation as possible. Insurance companies will use any reason to deny a claim outright or pay out the lowest claim amount possible.

Therefore, policyholders must be diligent and keep all relevant documentation and correspondence involved in the claim. The property owners also should have a copy of their flood insurance policy readily available to reference.

Policyholders should keep all documentation in organized in one central place such as a binder. If they have photos of their home before the flood or have recorded water or flood damages on video, it is important to have easy access to the files.

After property is destroyed or badly damaged after flooding, policyholders must deal with numerous contractors. When policyholders receive estimates and oversee repair work, they should also make sure to receive everything in writing.

Any receipts for property lost or damaged in flooding should be saved in a central location as well.

These types of documentation may be crucial in claiming the full amount to which the property owner is entitled. When policyholders have detailed and thorough documentation, it is much easier for an attorney to quickly and correctly assess their case.

3. Consult with an attorney and file a supplemental Proof of Loss if needed

The August 25th deadline is important because if the initial payments given by the insurance company are not enough to cover the flood damages and make the necessary repairs, the policyholder must file a supplemental Proof of Loss to claim the full amount needed to properly fix the property.

The typically flood insurance policy reimburses up to $250,000 for residential damage and $500,000 for businesses. Policyholders are entitled to receive the full amount needed to fix their damaged property.

This upcoming August deadline is the last opportunity for policyholders to submit a supplemental claim. After this deadline, they will no longer have an option to pursue additional damages under their flood insurance policy per FEMA rules.

If policyholders have already submitted more than one Proof of Loss, they can still submit additional Proof of Loss forms. There is no limit to the number of Proofs of Loss that a policyholder can submit.

If a policyholder has previously submitted a Proof of Loss but made a mistake on the form, August 25th is also the last day to correct the error and resubmit the form. Furthermore, if policyholder did not submit sufficient evidence (or documentation) to accompany the Proof of Loss, August 25th is the deadline to submit the Proof of Loss with the necessary evidence.

Our attorneys have handled many flood insurance claims. Too often a policyholder misses out on the opportunity to resubmit a claim, submit a supplemental Proof of Loss form or take legal action because he or she was unaware of the August 25th deadline. Essentially, the claim will be closed after the deadline if the policyholder fails to submit a Proof of Loss.

Though the August 25th deadline is fast approaching, an experienced attorney can handle the tight deadline and prevent policyholders from forfeiting a higher claim amount.

If you think your flood insurance claim has been wrongfully denied or underpaid, consult with one of our attorneys as soon as possible.

With a free consultation, you can find out if your best option as a policyholder is to file a supplemental Proof of Loss, start the appeals process or take another course of legal action.

If you are unsure what next steps to take regarding your claim, or if you feel your claim is stuck either in appeals or with red tape from the insurance company, reach out to the experienced trial attorneys at Fitts Law Firm. We can help you make sure that you receive everything to which you are rightfully owed.

If You Have Questions About the Upcoming Deadline, Complete the Form for a Free Case Review.

The Upcoming Deadline for Property Owners Handling a Flood Insurance Claim from Harvey

Underpaid or denied flood insurance claims in the aftermath of a hurricane are unfortunately all too common. Home owners or businesses may be eager to fix their damaged property and accept the first amount offered by their insurance, but it is very important to carefully consider the options.

While not rushing into any decisions is important, there is an incentive to act quickly due to the upcoming FEMA deadline for Harvey related flood insurance claims.

August 25, 2018, is the last day to file a Proof of Loss for a supplemental claim, file an appeal, request an outside appraisal or file a suit against your insurance company.

Difficulties with the Flood Insurance Claim Process

The flood insurance process, due to claims being handled by the Federal Emergency Management Agency (FEMA) as part of the National Flood Insurance Program (NFIP), can be unavoidably complex.

While each NFIP flood insurance policy is the same no matter which private insurance company issues the policy, victims of Hurricane Harvey throughout Texas may face significant barriers while filing flood insurance claims.

Insurance Journal estimates that Hurricane Harvey caused between $6.5 billion and $9.5 billion in home flood insurance losses alone while Accuweather estimated the entire damage caused by the storm to be almost $200 billion dollars, or an entire percentage point of the United States GDP.

After such a large catastrophe, policyholders who file a claim often face longer wait times because claims adjusters, appraisers and insurance agents must tackle such a high volume of claims. Policyholders may deal with these long wait times, unresponsive insurance representatives and other unavoidable delays.

Furthermore, it can be difficult for policyholders to accurately document property damage, submit a Proof of Loss form and gather the necessary information—especially in the aftermath of a natural disaster where flood victims have lost valuable possessions and/or important documentation.

Residential and Commercial policyholders often must seek professional help to better ensure they receive everything that is rightfully owed to them.

Was My Flood Insurance Claim Underpaid or Denied?

Insurance companies deny or underpay flood insurance claims for a variety of reasons. You must remember that it is always in the best interest of the insurance company to pay out the bare minimum for claims.

When insurance adjusters are more concerned with retaining profits than properly assessing claims, they are dealing in bad faith with policyholders in need. Often homeowners must assert themselves to receive the correct amount.

Insurance practices vary widely depending on the insurance company and the type of policy. Additionally, so many factors go into deciding the claim amount that the claim amount can vary widely. For example, if the insurance adjuster is using outdated information to find repair estimates in the area, or if the adjuster is underappreciating the value of the policyholder’s home.

Another common reason for an underpaid claim, especially after a natural disaster such as Hurricane Harvey, is that insurance adjusters are overwhelmed with claims. Due to the high volumes of claims, insurance adjusters and property inspectors rush to settle claims as quickly as possible causing property damage to be overlooked.

The insurance adjuster may overlook the severity of damage and underpay the flood insurance claim. In these cases, the adjuster includes to repair cosmetic damage to the property but fails to account for structural damage that has affected the functionality of the property, which may be harder and more time consuming to assess.

Strict Deadlines to File under FEMA

One of the most common reasons for an insurance adjuster to underpay or deny a claim is because the policyholder failed to provide the proper documentation or comply with FEMA deadlines.

Policyholders may lose important documents in the flooding or make a simple error when submitting the claim or proof of loss. Either way, mistakes by the policyholder can affect the claim amount or result in a denied claim.

Under the standard flood insurance policy, there are strict deadlines for how soon policyholder must submit a Proof of Loss as part of their claim. This Proof of Loss document is a sworn statement from the policyholder stating the amount of money requested and providing proof to support the claim amount.

While in typical flood insurance cases, the proof of loss must be submitted 60 days after the loss, FEMA extended this standard 60-day deadline for victims of Hurricane Harvey and Irma. Policyholders affected by these hurricanes have 365 days—or one year—from the date of Hurricane Harvey to file a Proof of Loss.

This deadline is strict and final.

FEMA will deny a policyholder’s claim if the proof of loss is not filed by the deadline, improperly filed or is not accompanied by sufficient evidence to support the amount claimed for property loss.

Many policyholders confuse the Proof of Loss with the claim, but they are not the same thing.

While a policyholder files a flood insurance claim for their insured property, there will be only one claim for the entire property, including personal property.

The policyholder can submit more than one Proof of Loss (along with the additional required documentation). If the initial payments made by the adjuster were not enough to complete the repairs, the policyholder must file a supplemental claim for additional damages by submitting a supplemental Proof of Loss. There is no limit to how many Proofs of Loss that can be filed by a policyholder, as long as they are submitted to the insurance adjuster and FEMA by the one year deadline and include supporting documentation.

Policyholders are required to file a compliant Proof of Loss form for any supplemental claims by the August 25th deadline.  If policyholders fail to submit this document in time, they cannot make a legal claim under their flood insurance policy.

Per FEMA regulations, if there is any error or mistakes on the Proof of Loss, submitted on or by August 25th, and the policyholder fails to correct the error prior to the August 25th deadline, the policyholder forfeits the right to correct the mistake and resubmit their claim, request a supplemental payment or file legal action at a later date.

A Proof of Loss also requires additional documentation that corroborates whatever amount is requested. All documentation must be submitted by the August 25th deadline as well. Policyholders also should keep in mind that FEMA requires the Proof of Loss and the necessary documentation to be submitted at the same time.

The Impending August 25th Deadline

The Hurricane Harvey date of loss is August 25, 2017.

August 25, 2018, will be the last day to submit a compliant Proof of Loss. FEMA extended the deadline from 60 days to one year to give policyholders sufficient time to properly assess their damages, which in most cases were extensive.

Even with the extension, a year does not give flood victims a lot of time to obtain information and estimates to successfully handle the flood insurance process given that most have had to deal with multiple insurance adjusters, adjusters who left town and failed to turn in paperwork, adjusters who have not returned their calls or emails, and extremely busy contractors. Policyholders must obtain accurate, full estimates for repairs; find documentation that supports the full value of their claim amount; and file a supplemental Proof of Loss, all within one year.

There is no deadline to negotiate the claim amount with the insurance adjuster after the supplemental Proof of Loss is filed.  The deadline only applies to the time frame for the policyholder to support the Proof of Loss and documentation.  So, as long as the Proof of Loss and documentation are submitted timely, by August 25th, policyholders may still be disputing the claim amount with their insurance company, waiting for the completion of the appraisal process, or working through the appeals process after the August 25th deadline.

If flood insurance policyholders affected by Harvey miss this deadline, however, they will have no recourse under their current flood insurance policy or the law. After August 25th, policyholders lose the right to appeal, submit additional damages, request appraisal or pursue further legal action.

The year has passed by quickly, so it is important to act now.

Consult with an experienced attorney that has handled complex flood insurance claims where the claim may have been underpaid or denied.

Contending with an insurance company or the NFIP takes time and knowledge of the complicated process. A capable attorney will be able to handle the process for you and help you attain everything that you are rightfully owed.

Policyholders should gather as much information and documentation as possible before speaking with an attorney, so their case can be quickly and properly assessed. With a free consultation, policyholders can gain the necessary guidance to decide the best next steps with the August 25th deadline in mind.

Critical Next Steps for Denied or Underpaid Flood Insurance Claims

It can be difficult to accurately submit Proof of Loss forms by the deadline if policyholders have trouble reaching their insurance adjuster or do not receive correspondence from FEMA or the insurance company in a timely manner.

If you are considering filing a Proof of Loss or taking further action in dealing with your insurance company, do not hesitate to reach out to a professional. This close to the August 25th deadline, you will not want to waste any more time.

The deadline is fast approaching, but there is still enough time to dispute an underpaid or denied flood insurance claim. Our attorneys have handled numerous Harvey related flood insurance claims, and we are here to help you. Do not delay and miss out on claiming the full amount of your claim before the August 25th deadline. Let the Fitts Law Firm work diligently to help you secure the full amount of damages to which you are entitled.

If Your Flood Insurance Claim Was Denied or Underpaid, Complete the Form for a Free Case Review

5 Steps to Take When Dealing with an Underpaid Flood Insurance Claim

Insurance is meant to provide security in the event of an emergency. The policy gives you peace of mind. You pay the insurance premiums on time for years, and after a qualifying event, you expect for the insurance company to pay your claim on time as well.

Few people can afford to handle the necessary costs of repairing a home after a natural disaster on their own. But what happens when insurance—your primary means for managing unexpected risks—falls short in your time of need?

Underpaid flood insurance claims are more common than you might imagine. Since most homeowner’s insurance excludes flood damage, and private flood insurance remains a rarity, most flood insurance claims are handled through the Federal Emergency Management Agency (FEMA)’s National Flood Insurance Program. Homeowners typically purchase the Standard Flood Insurance Policy through their private insurance company or agent. Each flood policy is the same, regardless of which private insurance company underwrites it.

The number of flood claims has skyrocketed in the aftermath of Hurricane Harvey and as a result, policyholders often face longer wait times, multiple adjusters, and more bureaucratic “red tape” than they would with another type of insurance claim.

The Steps for Dealing with an Underpaid Flood Insurance Claim

You filed the claim, and your insurance company has given you the documentation estimating the sum of the total cost of damages. However, you disagree with the insurance company’s estimate. The value does not adequately represent how much money is needed to replace and fix your damaged property.

If the insurance company is not offering enough, there are options. Homeowners often feel that the first amount that the insurance company offers is final and there is no recourse.

This is a mistake. If the insurance company issues initial payment to you, you should accept it as a partial payment.

It is unfortunate how many homeowners accept a lower claim amount even if they do not believe the amount is an accurate assessment of their flood damage.
It can be unwise to accept the first settlement offered by your insurance company. To ensure you receive the correct amount, property owners must often take time to understand their policy and the damage. When needed, property owners may also need to bring in outside help.

If you are unhappy with your flood insurance claim and believe you may have been underpaid, quickly follow these 5 steps before accepting any settlement. The Standard Flood Insurance Policy is governed by federal law, not state law and there are very strict deadlines that you must meet or you will lose the opportunity to dispute your flood claim.

1. Understand your flood insurance policy and coverage

It is important to review your flood insurance policy before and after you receive your claim amount for flood damage. You must know what is covered and what is excluded before you can have the insurance company reassess your claim.

2. Document, document, document your damages

Before repairing or replacing any of your damaged property, take lots of pictures, keep receipts, make an inventory of all damaged or destroyed personal property that needs to be discarded. If you were unable to document the damages before repair or replacement, go through old photos from holidays, family events. You probably have photos of the pre-loss conditions of your home and personal property that you are not considering when under the stress of handling a flood claim. You have to be able to prove flood damage to your claimed items to the adjuster, they are unlikely to just take your word for it.

3. Notify your insurance company and file a Proof of Loss

You should reach out to the insurance company directly. Speak with the adjuster about his or her property damage assessment. Never be afraid to ask for further information. Find out exactly how the claim amount was calculated by asking to see their work. When requesting new information, make copies of any additional documents that you receive from the insurance company.

Advise the adjuster that you would like to file a supplemental claim seeking additional damages. You have the right to obtain your own estimate and submit it to the adjuster. The way to file a supplemental claim is to file a Proof of Loss.

Under the flood policy, there is a 60 day deadline to file a Proof of Loss. It is your responsibility to timely file a Proof of Loss and all supporting documentation. Under Hurricane Harvey, the deadline was extended by a year from the date of the storm. The Proof of Loss is critical to your flood claim. Under the FEMA regulations, your claim will be barred if you fail to timely file your Proof of Loss. Specific information must be included in the Proof of Loss. FEMA has published a form on FEMA.gov that we recommend be used. Documentation of your supplemental claim must accompany your Proof of Loss at the time that you submit it.

If you are unsure of how to properly file a Proof of Loss, you will want to consult with an experienced attorney with experience handling underpaid flood insurance claims.

4. File an appeal or request an appraisal

FEMA provides guidance for how policyholders can file an appeal or request appraisal after they receive a denial of their claim or believe the dollar amount of the claim offered is insufficient for the flood damage and repairs. You have to choose one or the other. If you choose the appraisal option, you are unable to file an appeal at a later date. If you choose the appeal option, you are unable to request appraisal at a later date.

When you want to file an appeal or request an appraisal, make sure you understand the policy thoroughly. Also understand if you are filing your appeal or request an appraisal with FEMA or directly with your insurance company. If you have a flood insurance policy with the National Flood Insurance Program, you will file an appeal or request appraisal with FEMA. If you have private flood insurance, then you will file the appeal or request appraisal with the insurer.

Once your appeal is received, you should receive a written acknowledgement of your appeal. If you do not receive the acknowledgement, you need to follow up with your adjuster or FEMA. Generally, you should receive a decision regarding your appeal should generally be received within 90 days.

Once your request for appraisal is received, you should receive written acknowledgment and additional information regarding selecting an appraiser and the identity of FEMA or the insurance company’s appraiser within 20 days. If you do not receive the acknowledgement, you need to follow up with your adjuster or FEMA. Generally, appraisals take at least 60 days to finalize.

5. Consult with an experienced attorney

Whether you want to file a supplemental Proof of Loss, file an appeal, request appraisal, request more information about your claim, or reopen a past claim, you will want to consult with an experienced attorney with experience handling underpaid flood insurance claims. An attorney can provide a case review and let you know your best options moving forward.

Navigating flood insurance claims can be tricky. Having an expert work through the insurance process on your behalf can make the difference between receiving the full amount you are owed, instead of an underpaid claim. When insurance companies underpay claims and expect policyholders to accept the amount without question, experienced attorneys can fight on behalf of the policyholder.

Many underpaid insurance claims can be settled without going to court. Attorneys will help you walk through the claims process and properly assess the flood damage and claim amount. Furthermore, an attorney can help policyholders communicate with their insurance company and exhaust all their options before litigation. If your insurance company is not responding to your requests or delaying payments, an attorney will fight to ensure your claim is processed and paid in a timely matter.

Unfortunately, wrongfully underpaid flood insurance claims after a natural disaster can be common. Property owners want to make the best choices and not rush into any decision regarding the first claim amount offered by the insurance company, however it is important to act quickly because FEMA has very strict deadlines under the flood policy and National Flood Insurance Program. Seek professional help and ensure you receive everything that you are rightfully owed.

If Your flood insurance Claim Was Denied or Underpaid, Complete the Form for a Free Case Review

FEMA Provides Insufficient Funding for Hurricane Harvey Claims

Hurricane Harvey delivered a devastating blow to Southeast Texas in August of 2017. Along the Texas Coastal Bend, from Rockport up to Port Arthur, many towns and cities were hit with the extreme rainfall and subsequent flooding. In just a few short days, the hurricane poured over nine trillion gallons on the affected areas.

Hurricane Harvey Flood Damage

Hurricanes are known to cause massive destruction requiring billions of dollars of federal and state assistance to fix, and Hurricane Harvey was no exception. The extreme flooding caused by Hurricane Harvey was the most expensive natural disaster of 2017 causing a staggering $125 billion of damage.

As affected communities struggle to rebuild, underpaid, delayed, or denied insurance claims can become a significant obstacle. Flood claims can be denied or underpaid for a variety of reasons, but regardless of the circumstances, homeowners without the necessary financial assistance will struggle to cope with damages.

It can be difficult for property owners to properly file a flood insurance claim. In the wake of a large natural disaster such as Harvey, property owners face longer wait periods for insurance inspectors to assess the damage and for a determination of their claims. Complicated insurance claim processes, excessive wait times, and underpaid claims all work together to slow down recovery efforts.

What Will FEMA Cover?

For the survivors of a natural disaster, the damages can add up—lost jobs, irreparable vehicles, broken appliances and electronics, flooded homes, damaged personal items, lost memorabilia and more. The financial and personal burdens for those affected can become overwhelming.

In most cases, homeowner’s insurance does not include flood damage. While private flood insurance is gaining in popularity (growing by over 50% last year alone), the primary flood insurance coverage for the majority of homeowners remains the National Flood Insurance Program (NFIP), which is administered by the Federal Emergency Management Agency (FEMA). To qualify for a NFIP insurance policy, the property must be located in a community that participates in NFIP.

While some plans offer more comprehensive coverage, NFIP flood insurance typically reimburses all property losses up to $250,000 for residential properties and $500,000 for businesses.

Unfortunately, most property owners affected by Hurricane Harvey did not have any type of flood insurance. Many homeowners thought that flood insurance was unnecessary because their homes were located outside of the 100-year floodplain. According to The Houston Chronicle, 11% of the entire housing stock in Harris County flooded during Hurricane Harvey, but over 65% of these homes were outside the 100-year floodplain.

If a property owner does not have flood insurance, he or she can still apply for disaster assistance through FEMA’s Individuals and Households Program. This program was built to help disaster survivors meet basic needs. This disaster assistance also can cover expenses like temporary housing, which are not included by most flood insurance policies. Most disaster assistance given through this program is in the form of a loan from the Small Business Administration (SBA).

The average flood insurance claim payout for homeowners during Hurricane Harvey was $120,000. Homeowners who lacked flood insurance and applied for disaster recovery assistance through FEMA received a mere $5,500 on average.

Underpaid Claims from Hurricane Harvey

That difference in assistance can be remarkable. On average, residents with flood insurance received $100,000 more to fix their damaged property than those residents who had to rely solely on FEMA disaster assistance.

In recent years, FEMA has been accused of delaying payments, underpaying claims by tens of thousands of dollars, and misappropriating federal relief funds.

It is an unfortunate fact that many homeowners affected by Harvey will struggle to navigate flood insurance programs for years to come.

The NFIP is expected to pay out over $11 billion in insurance claims from Hurricane Harvey alone, but these payouts will happen slowly over time and may not be enough.

Insurance companies deny or underpay insurance claims for different reasons. They may insist that the property damage was caused by a pre-existing problem and not the flooding. For example, if a homeowner lives in an older building with previous water or structural damage.

During a natural disaster, FEMA hires inspectors on contract to assess property damage and personal property losses. These findings are used to determine eligibility for insurance claims and to decide whether damage was caused by the hurricane or homeowner neglect.

Hastily conducted property inspections may result in a failure to properly assess the cause of loss and the damage amount, which often results in an underpaid or denied claim. In these cases, the household receives inadequate or no assistance for its property damage.

While property owners can appeal FEMA’s determination and fight for other federal aid, this process can take years.

Recent reporting from The Houston Chronicle found that only 41% of Texans who applied for disaster assistance from Harvey have been approved. FEMA decided that 31% of applicants were ineligible for disaster assistance, and the other 28% were still pending a determination or had been referred to the SBA for a loan.

Know Your Rights When Navigating FEMA Claims

FEMA claims are a complicated process.

Given how few Texans have received payment from flood insurance claims and how few applicants have been approved for FEMA disaster assistance, it is likely that some property owners have been unfairly underpaid by insurance claims or unfairly rejected from receiving assistance.

Even after an insurance determination is made, property owners need understand their legal and financial options moving forward.

The Texas Insurance Code lays out the requirements for insurers when handling insurance claims. Individuals are granted certain rights when dealing with insurance claims including:

  • The right to a thorough investigation of your property damage
  • The right to the prompt handling and payout of any insurance claims
  • The right to know why a claim was denied
  • The right to hold insurers accountable when they fail to pay a valid claim, misrepresent the terms of the insurance policy, or deal in bad faith

When FEMA does not provide enough assistance or properly pay out an insurance claim, property owners may need to secure legal representation to receive the right compensation from flood losses.

Assessing Your Options

If you filed a flood insurance claim but were denied coverage or did not receive a payout that sufficiently covered your damage, you can write an appeal letter to FEMA. When necessary, an experienced federal attorney can dispute NFIP claims through litigation.

If you find additional damage outside your original claim, you can file a Supplemental Claim to FEMA.

If you do not have flood insurance, you can still apply for disaster assistance including the SBA loan program. Though this loan assistance will need to be repaid, the maximum interest rate on these loans is only 4% making them a much better option for homeowners with damage than private loans with a higher interest rate.

You also may be able to make an inverse condemnation claim. These types of claims are lawsuits against the local authorities who intentionally flooded homes to protect the greater area from flooding. If your property was not flooded by heavy rains but instead from one of these “controlled releases,” you may have a claim. Consult with an attorney if you think you may qualify.

Regardless of your next steps, be sure to document the entire process. It is crucial to have clear documentation and records of any interactions with the FEMA, your insurance company, the claims adjuster, inspectors, and any relevant contractors who worked on damage after the flood.

Undervalued or denied flood insurance claims can leave property owners feeling cheated or defenseless. The devastation left in Harvey’s wake can make the rebuilding process daunting for even the most financially-secure property owners.

Make sure you understand your options and reach out to an experienced attorney if you need guidance in the aftermath of a natural disaster. Our trial attorneys are experienced in flood insurance claims and other FEMA assistance and we have the knowledge to ensure you are receiving everything that you are rightfully owed.

If Your Hurricane Harvey Claim Was Denied or Underpaid, Complete the Form for a Free Case Review