How Insurance Distribution Is Changing

How Insurance Distribution Is Changing

By Andrew G. Simpson | January 26, 2012

Insurance distribution is changing, and agents and brokers—retailers and wholesalers—have to define the value they offer and what type of relationships they will have with carriers and customers in the years ahead.

“Over the last several years, we’ve seen a drastic change in the distribution space, in that the traditional rules have sort of broken down, that the role of a retail agent, the role of a wholesaler, those have all changed,” Glenn Hargrove said in an interview with Insurance Journal.  Hargrove is president of MarketScout Wholesale.

“There are no longer circumstances where a surplus lines company is represented just by a wholesale broker or a surplus lines broker. They can go directly to retail agents,” he said. “You have direct line products that are happening within the space that circumvent retailers and wholesalers, in some cases. So it’s changed the value propositions of the firms in that space.”   Hargrove believes the changes are being driven in part by regulation and by technology, but another major driver is insurers looking to deliver their products and services in the most efficient manner possible.

There’s the aggregation effect of those people in the distribution chain being able to access a multitude of markets. Or if you look at it in the reverse sense, from the carrier, their ability to deliver to a carrier, a multitude of clients and customers that that carrier probably couldn’t efficiently reach on their own.

Thus agents and brokers bring a combination of expertise, talent and access to the equation.  In addition, agents and brokers provide an opportunity for insurers to outsource services.

He said he believes that going forward there will be distribution businesses that are hybrids and some that are much more tailored towards specific operations “but maybe don’t look, necessarily, like the traditional form of either a retailer or a wholesaler as we’ve known it.”

Going forward, distributors are going to have to explain more than that they are in the middle of the equation, but also “why they are there,” he said.

He advises agents and brokers to reshape their own box and own value proposition so that the market is convinced they are an important player in the distribution chain.

Excerpted from:   http://www.insurancejournal.com/news/national/2012/01/26/232787.htm   For full story please visit Insurance Journal (link above).

Brought to you courtesy of:   Dick Wagner   www.AskDickWagner.com

Should I Use A Certified Contractor For Hail Damage?

Should I use a Certified Contractor for hail damage?

YES, you should always use a certified contractor when dealing with your Hail Damage. It does not cost anything extra to use a certified contractor, but the benefits are priceless. You can't be too careful when choosing a roofing contractor. Certified contractors are your safest choice because they are:

• Local
• Properly Insured
• Properly Licensed
• Factory Certified
• Hundreds of satisfied Customers
• Covered by Manufacturers Warranty
• Better Warranties Available

Here's What Homeowners Say About Their Certified Contractor:

• Deliver the highest level of professionalism
• Provide detailed estimates
• Clearly explain products and warranties
• Did an excellent job in clean-up
• Professional and cared about our needs

We have pledged to insure that each customer receives their “best and safest choice” in roofing and are authorized to offer the Weather Stopper System plus Warranty.

 

 

 

 

 

 

We install the Weather Stopper Roofing system certified by GAF with a 25 year to Lifetime warranty. We use all certified roofing materials from Pro starter to Weather stopper in all valleys and install per manufacturers specifications. These are the benefits when using a certified contractor for Deluxe Warranty:

• Manufacturing Defect Coverage For Lifetime Shingles
• Peace of Mind
• Warranty Transferable
• Good Housekeeping Protection
• Up to 50 Years of Non-Prorated Protection

 

 

 

Orion Restoration Is Proud to be a GAF Certified Contractor.

Our professional factory trained crews complete your roof in a timely manner keeping your exposure to a minimum. Our Field supervisors are trained to handle your claim, ensure a fair assessment and settlement with your insurance company. We are there to meet with the adjuster and agree on all damage. If you have already had an adjustment and feel you did not receive a fair settlement; we specialize in re inspections and supplement utilizing the Xactimate software which is the same software used by most insurance carriers.

 

 

Orion Restoration Provides 100% Transparancy On All Insurance Claims!

 Orion Restoration Provides 100% Transparency on All Insurance Claims! 

Yes, that is correct!  We now provide 100% transparency on all claims and allow Customers, Insurance Agents, and Insurance Adjusters to log into our 24 hour Customer Care Center to be able to review all the documents, drying records, schedules and even upload documents into our Clear-view System.

After about a year of development we are live with our Clear-view Software, and for those of you who have never head of Clear-view there is a reason.  Clear-view is software developed by Orion Restoration to provide 100% Transparency throughout the entire claim.  Our software is a secure web based system providing all the information to keep the customer, the agent, and the insurance adjuster up to date at all times.  Well, some of you might be wondering what benefits does this provide to me? 

Customers:  Customers will have 24 hour access to the Orion Cloud.  In the cloud, customers will be able to access the following information:  Status of the job, The date the job was created, and the ability to view all the Contracts and Estimates, Photos of the Job, Drying Records, Scope of Work and all Job Files associated with your job.  Customers will also have access to our real time web based schedule and be able to see all aspects of the process.  Customers will also have the ability to upload documents related to their job for review.    

Agents: Agents will have 24 hour access to all your customers jobs.  The following information will be available in the Orion Cloud:  Status of the job, The date the job was created and you will be able to view all the Contracts and Estimates, Job Photos, Drying Records, Scope of Work and all Job Files associated with your customers job.  Agents will also be able to see the real time schedule and see exactly where everything is in the restoration process.  Agents will also be able to upload documents relating to the job for everybody to view. 

Insurance Adjusters:  You will have 24 hour access to all your customers jobs.  The following information will be available in the Orion Cloud:  Status of the job, The date the job was created and you will be able to view all the Contracts and Estimates, Photos of the Job, Drying Records, Scope of Work and all Job Files associated with the job.  Adjusters will also be able to see the real time schedule and see exactly where everything stands in the restoration process.  Adjusters will also be able to upload documents relating to the job for everybody to view. 

Orion Restoration: Although Clear-view is our customer relationship interface, it really does a lot more behind the scenes; holding everybody accountable, including Orion Restoration. Clear-view is a workflow based system assigning task to the Orion Staff making sure all the documents are properly uploaded into the system for everybody to view.  Along the way there are checks and balances; from required managers approvals to our customer care center calling to verify with the customer all the details of the job.  The system then transfers the job into production, where a schedule is created and maintained all the way through the completion.  Once the job is fully completed, the system automatically transfers the file to billing.  Marketing is the final stage of our process where customer surveys are conducted and insurance agents and adjusters are notified that the Project is 100% and all parties are happy with the work preformed.  

 

Finally, there is a contractor where you do not have to call to find out what is going on and everybody is on the same page.  No more looking for files, calling for numbers, the Buck Stops where the last task was not finished and everybody knows where everything stands.  Your customers are our customers and through good business practices and a whole lot of hard work, we strive to keep all of our customers happy.  So, please find below a quick glimpse into Orion Clear-view with our intro letter which automatically gets sent out to our customers, agents, adjusters, and subcontractors who are now part of the Orion Family. 

 

•      Contracts: This folder contains all Contracts, Change Orders, Supplements, and Selection Sheets for the job.
•      Photos: Photographs will be uploaded throughout the process; documenting from the beginning until the end of the process.
•      Drying Records: These are Orion Restoration Forms in which the structure that is being dried will be drawn and will indicate all moisture levels through the entire drying process.
•      Customer Attachments: Documents uploaded by the Customer, Agent and Insurance Adjuster.
•      Scope of Work: Internal Orion Restoration document stating the actual scope of work contracted to be done.
•      Marketing Documents: This folder will contain a customer referral and letters to Adjusters, Insurance agent and Customer thanking them for their business
•      Job Files: Are all the files in which the project manager has scoped the work with to get to a final contract.

I think I Have Mold? What Should I Do Next?

I think I have mold?  What Should I Do Next? 

YES, You Have Mold in Your Home! Mold is present in every home and the real question is... what levels of mold and what types of mold are present in your home? Normal levels of mold in a home is referred to by the Clean Trust as "Normal Fungal Ecology".   The scientific definition of "Normal Fungal Ecology" is an indoor environment that may have settled spores, fungal fragments or traces of actual growth, whose identity, location and quantity are reflective of a normal fungal ecology for a similar indoor environment. So what does this really mean?  This means there is only the typical amount of mold in your home and it varies in different parts of the country. It depends on the types of mold and the amounts of mold present. However, the most important thing it means is, that there is no active mold growth. So, then back to the question, Do I have elevated mold levels in my home? 

There Are Four Common Signs You Have a Mold Problem:

Moisture:  Dampness from humidity, condensation, plumbing failures or any source from inside a structure.  Chances are if you see moisture in a structure there is already mold.

Odor:  A musty or earthy smell often indicates that mold is hiding, however, not all molds can be detected by smell. 

Leaking:  Leaks go hand in hand with moisture, however, if the structure is leaking the leak needs to be addressed immediately.  Mold growth can occur within 72 hours if not dried properly.  

Discoloration:  Most of the time, the first signs of mold growth is viable mold on the surfaces located in the home ranging from drywall, wood, furniture, to carpet and sometimes clothes. 

Although there are signs of mold growth there are 6 factors essential for mold growth and with out these factors being present mold will not grow:

1.  Presence of mold spores

2.  Nutrient Source (organic substrate)

3.  Water Source (any water)

4.  Time (mold growth can occur within 72 hours)

5.  Environmental Conditions (Temp and Relative Humidity)

6.  Oxygen

Water is the single most important factor for microbial growth - No Water No Mold! So the most important thing to keep in mind is that if you ever have a leak or notice high humidity, you need to deal with the issue as soon as possible! If you think there is a possibility of mold it is recommended to call a restoration company and have the issue tested.

The three most common test that are preformed to determine whether you have a mold problem or if mold is present at elevated levels: 

1. Visual Inspection:  This should be done by a company that is certified by the Clean Trust (IICRC)) or other national certification firm. The most common answer is if you can see the mold you have a mold problem, however it is recommended to get further testing by getting an air quality test preformed or a tape test preformed by a certified contractor. 

2. Air Quality Testing:  This should be done by a company that is certified by a national certification company and is trained in proper air sampling techniques.  These test are sent out to a third party for analysis and should be able to deliver a full air quality report. (Like the pictures below)

3. Tape Testing:  Is generally done as a do it your self type test, however can be used by mold remediation professionals in areas like attics and basements to determine the type of mold present.  

All of these test can determine if the property has mold. In most cases, it is recommended that a Certified Mold Remediation Specialist do the test, to help decipher the results and determine the proper steps that need to be taken if there is a problem. 

 

 

Air Sample Test: Percentages Present       Air Sample Test:  Definition & Explanations

 

As you can see the air sample test is quite accurate and does give great explanations. Now the big question is, what do I do next?  Well in the case above, nothing.  This test was preformed on a house where the home owner thought they had a mold problem and there was a little musty smell in the house. In this case, the mold was not at elevated levels and the homeowner can sleep well at night knowing they do not have a problem.  However, this is not always the case and if elevated levels are found then the proper remediation steps need to be followed and a Certified Mold Restoration company needs to be called. 

I hope this has helped in giving you a first step in determining whether you have a mold problem and understanding the signs of mold and the types of testing that are preformed.  

We preform Mold Testing in the Greater Atlanta Area and do visual inspections for free and air quality tests for $250.00 for three tests. If there is any thing we can help you with please feel free to contact us even if you just have a question, we are more than happy to help.                                                                                                                                

Is My Contractor Charging Me A Fair Price On My Insurance Claim?

Is My Contractor Charging Me A Fair Price On My Insurance Claim?

How Do I Know If The Contractor Is Charging Me A Fair Price On My Insurance Claim? This is quite a common question and the simple answer is that insurance contractors in most cases do not determine pricing. Pricing is determined by the insurance companies who use a program called Xactimate.  http://www.xactware.com/solutions/claims-estimating

 There are three components to determine the final price of a Insurance claim:

First: Scope of Work:  Scope of work is the agreed upon issues that the insurance claim is being filed about.  This can range from a water heater busting and flooding the entire house to a fireplace starting a fire and burning the house down.  The scope of work is all the components that have to be fixed to get the house back to pre-loss condition.  The scope of work is usually agreed upon by the insurance adjuster and the contractor.  However, the contractor generally does not determine the scope of work, the insurance company does.  Sometimes if a contractor is a preferred vendor and the loss is not a major loss the insurance company lets the contractor determine scope of work and submit the loss to them. 

Second:  Quoting the Job:  This is done in most cases through Xactimate.  Xactimate is a very robust program that most adjusters and good restoration contractors all use.  It is not software that somebody accidentally picks up and starts using.  Most of the time the contractor has to be trained and pays a licensing fee to Xactimate for the use of the software, however it is the platform in which the major insurance companies price from.  Pricing is undated monthly and adjusters and contractors can simply change the zip code to get different pricing in different parts of the country.  These quotes are generally 6 to 100 pages long and detail out everything being done piece by piece. See Below

Third: Construction and Supplements:  Once the construction gets underway, if there are any items not in the original scope of work these items will be brought to the adjusters attention.  The adjuster has the ability to approve or deny the issues. If the issues are approved then these items are considered supplements. A supplement can range from the replacement of sub floor due to water leak to replacing HVAC systems that could not be tested on the house due to no power. Supplements are generally items that can not be determined with out causing further damage to the house at the time the scope of work is being determined. 

 

Finally there is the deductible.  The deductible is the elephant in the room however in the State of Georgia where we do business this is no longer an issue. 

Link to House Bill 423

http://gallery.mailchimp.com/178d2748493ec329fa42be728/files/Georgia_Law_Regarding_Residential_Roofing_Contracts_and_Incentives.1.pdf

 

House Bill 423 states that:

"Advertise or promise to pay or rebate all or any portion of any insurance deductible as an inducement to the sale of goods or services.  As used in this subsection, the term promise to pay or rebate includes (A) granting any allowance or offering any discount against the fees to be charged, including, but not limited to an all or discount in return for displaying a sign or other advertisement at the insured's premises, or (B) paying the insured or any person directly or indirectly associated with the property any form of compensation, gift, prize, bonus, coupon, credit, referral fee, or other item of monetary value for any reason."

So the real answer to the question is that the answer is all in the insurance paper work.  Now the real trick is to make sure the contractor that is helping you is a good contractor.  We are big advocates of the BBB and getting a referral list from the contractor you are considering using.  All good contractors should be active with the BBB willing to do both. 

I hope this has helped you in knowing if your contractor is charging you a fair price. Also, if the contractors that built the houses in the two pictures below are the same price, why not go with the one that has a proven track record for success? We do business in and around Atlanta, Georgia all the way to Macon, Georgia and would love to help with any of your restoration or construction needs. 

 

     

Orion Restoration                                             Other Contractor

 

 

 

Do I Have To Use My Insurance Companies Prefered Vendor?

Do I Have To Use My Insurance Companies Prefered Vendor?

You are not required to use your insurance companies preferred vendor! You as a homeowner, have the ability to do the work yourself, hire the work out to another contractor or use a preferred vendor.  Some insurance companies or insurance agents will imply that you have to use one of their vendors.  They might say that their preferred vendors are better because:

Myth: They can control what they do. 

Fact: Which is not true! If you have a problem there is nothing they can do except threaten them just like any other vendor.

Myth: They carry the appropriate insurance.

Fact:  All professional contractors should carry the correct insurance for the size of the jobs and the type of work they do and a good contractor will actually carry umbrellas and side policies for specialty work. 

Myth: They charge the correct amount and if your contractor charges more you will be responsible for the extra charges. 

Fact: Every contractor that works in the insurance business uses Xactimate as a pricing system and should be able to give a professional estimate in a reasonable amount of time. 

Myth: They are properly trained.

Fact:  Everybody sends their guys to get IICRC Certified and all good restoration companies will have all their lead guys certified and most will have all their technicians certified or in a training program working to become certified. 

Myth:  They have to respond in 2 hours per the program.

Fact: We all should respond in 2 hours, however if there is a catastrophe all insurance companies will take care of the agents that give them business all year and good restoration companies have Disaster Response Programs in place to take care of companies and agents actively refer them and handle their business all year. 

Myth: They all Drive Pretty Green Trucks

Fact: The local guy around me should probably wash his trucks a little more, however a professional image is always a plus. All Companies should take the time to make sure their guys have a professional image. 

In reality insurance companies do like to use their preferred vendors! It saves them money and they carry extra insurance to protect them.  However, most  franchises are just like any local contractor.  There are some great contractors and there are some horrible contractors. If there is a local contractor that is a one stop shop, your job will go much easier. However, this can be a double edged sword.  Most contractors in the restoration industry have a general background in something.  A lot of restoration contractors are from the carpet cleaning industry and then there are contractors from the Construction Industry. So, if your needs are to get a little water cleaned out of the house, a carpet cleaner would be fine, however if you have a large loss that requires a lot of reconstruction then I would go with the Best Construction contractor around.  I mean one that can really build something not just put a band aid on it. 

We all use the same estimating system Xactimate and charge the same thing! So if you can get the contractor that built the home above to repair your mansion why would you ever choose the contractor that built the house below? 

 

So, the bottom line is, use the best possible contractor in your area. Orion Restoration  serves all Metro Atlanta and South Atlanta all the way to Macon and would love to help anybody with water damage, Fire Damage, Mold and Commercial and Residential Construction.  We are a one stop shop where customer service matters!

Hail Damage is it a Scam?

  Hail Damage is it a Scam?  

BEFORE                                                       AFTER 

1. Is Hail Damage a scam? This is one of the biggest topics going around on the internet and local communities. The short answer is absolutely not. Damage caused by wind and Hail cost State Farm more than $3.2 billion in 2010. Your insurance company sends an independent adjuster to verify damage and approve or deny your roof. Now, where the scam comes into play is the con in contractor. There is no such thing as a free roof. It is your responsibility to pay your deductible. There are several companies that offer free roofs or say they will cover your deductible.
2. How do I prevent being scammed? It is very important to use a reputable contractor who is a member of the BBB, licensed, insured and provides references. There are several fly by nighters who will scam you out of money.  Never give any money up front until your roof is approved by the insurance company. Most reputable companies offer free hail damage assessments and do a thorough inspection of your entire home roof, siding, gutters, a/c unit etc. It is important to have an inspection before you call your insurance this will prevent a frivolous claim.
3. How do I know if I have Hail Damage? Hail damage is usual not visible from the ground. It is important to ensure a proper roof inspection was conducted. The insurance companies have established guidelines which constitute roof replacement. Contractors who fabricate this damage are committing insurance fraud. Trained inspectors look for storm related damage such as hail impacts or wind lift and ensure your roof meets the criteria to file a claim. Always try to be present during the inspection and ask for photos of the damage. When your roof has hail damage, it does several things; accelerates granule loss, accelerates shingle aging, voids manufacturer’s warranties, and leads to other associated problems. Although hail damage doesn’t pose an immediate threat to the structural integrity of the roof, it will eventually lead to problems if left untreated. Also, many insurance companies have a statue to limitations of how long a hail claim is viable.                           
4. Should I file a Hail Damage claim? When National Insurance Crime Bureau (NICB) examined data ranging from Jan. 1, 2006 to March 31, 2010, the organization found that the number of Hail loss claims filed with insurers increased by 61 percent -- from 256,000 in 2006 to more than 413,000 in 2009. At the same time, the number of claims referred to NICB for suspected fraud rose by 136 percent (from 301 reported in 2006 to 711 in 2009). The bottom line is if you live in an area that had a hail event find a reputable company to inspect your property. If you have damage then you should pursue compensation and replacement thru your homeowner’s policy. Protect you most valued possession that is why you have Insurance.                                                                    

Unresolved Water Issues Can Cause Mold

MOLD- A GROWING CONCERN IN THE SUMMER MONTHS

If you already have a mold problem – ACT QUICKLY.
Storm damage not repaired in a timely manner may lead to mold growing in your walls and sheetrock. The recent storms in the metro Atlanta area may have caused damage to your home. It is important to inspect your roof, siding and gutters, as they all can cause water to sepp into your walls. Damage that is not repaired can lead to mold in the coming summer months.

Mold damages what it grows on. The longer it grows, the more damage it can cause.

Who should do the cleanup?

Who should do the cleanup depends on a number of factors. One consideration is the size of the mold problem. If the moldy area is less than about 10 square feet (less than roughly a 3 ft. by 3 ft. patch), in most cases, you can handle the job yourself, following the guidelines below.

However:

• If there has been a lot of water damage, and/or mold growth covers more than 10 square feet, you should consult with a professional restoration company to do the cleanup. Make sure the contractor has experience cleaning up mold. Check references and ask the contractor to follow the recommendations in EPA’s Mold Remediation guidelines.
• If you suspect that the heating/ventilation/air conditioning (HVAC) system may be contaminated with mold (it is part of an identified moisture problem, for instance, or there is mold near the intake to the system), consult EPA’s guide Should You Have the Air

Ducts in Your Home Cleaned?

Do not run the HVAC system if you know or suspect that it is contaminated with mold – it could spread mold throughout the building.

• If the water and/or mold damage was caused by sewage or other contaminated water, then call in a professional who has experience cleaning and fixing buildings damaged by contaminated water.
• Visit www.epa.gov/iaq/pubs to download a copy of the EPA guide.

IF YOU SUSPECT THAT YOU HAVE A MOLD PROBLEM OR IF YOU HAVE HAD STORM DAMAGE TO YOUR HOME, ORION RESTORATION CAN RUN A MOLD TEST TO MAKE SURE THAT YOUR HOME IS MOLD FREE.

ORION RESTORATION FOLLOWS THE GUIDELINES OF THE EPA.

Courtsey of EPA

Storm Damage, Roof Repair, Siding and Home Health.

Orion Restoration opens new location in Charlotte NC! Our Stockbridge, GA based company continues to grow due to our “One Stop Shop” menatlity! Our location which is commonly referred to as comfortably south of Atlanta allows for a very large service area. Our clients know that we are more that just roof repair. Storms damage more than just roofs! The insurance agents that refer us have confidence in our porject managers who over see all home repairs. We rebuild or repair any damage…..fallen trees, broken windows, ripped siding, you name it! Our staff has experience working with adjusters and reassures homeowners that the estimates are done fairly. We use xactimate, the pricing software that the adjusters use too. Orion’s success is due to efficient systems in customer service and extremely experienced project managers and technicians. Summer, which is right around the corner, is mold season! Orion also mitigates for mold. Have an inspection done on your home so that you can prevent the growth of mold.

Orion Restoration has an A rating from the BBB, so let your Atlanta and Charlotte friends know that they are safe if their repairs are done by Orion.

FAQ for Home Owner Claims…..Our Company can advise you on how to make your claim.

FREQUENTLY ASKED QUESTIONS

FLOOD INSURANCE CLAIMS

Q: How do I make a claim?

A: You should notify your insurance company immediately after you sustain a flood loss. An adjuster will be assigned to investigate your claim. You should take pictures of all damage, separate the damaged from the undamaged property, and make an inventory of all the damaged or destroyed personal property. You are required to file a Proof of Loss in order to receive payment. This is a standard form issued by the NFIP. The adjuster will probably furnish this form to you, but he is not required to do so. Many times, the adjuster will complete the Proof of Loss form with the amounts contained on his or her Repair Estimate. Payment can not be made on a flood claim until a Proof of Loss has been received. This Proof of Loss should be submitted within 60 days after the date of the flood loss. It is the sole responsibility of the policyholder to file the Proof of Loss within the deadline.

Q: Does the 60-day deadline always apply to the filing of a Proof of Loss?

A: Yes, in most cases. However, after hurricanes or wide-spread losses, the Federal Insurance Administrator (FIA) has the authority to extend the deadline for the filing of Proofs of Loss. An extension of 120 days was granted for Hurricanes Gustav and Ike and expires on March 12, 2009 unless further extended. However, regardless of the time period, it is always necessary to file a proof of loss. This requirement cannot be waived except by the Director of FEMA.. There are no exceptions to the Proof of Loss requirement.

Q: Is it necessary for me to use the Proof of Loss form published by the NFIP or can I satisfy the requirement by filing a letter or a repair estimate or other documents which support my claim?

A: The requirements of the SFIP specify that certain information must be provided in the Proof of Loss and these requirements are strictly enforced. The Proof of Loss must also be sworn. It is recommended that the NFIP Proof of Loss form be used. Technically, it may be possible to satisfy the Proof of Loss requirements without using the form, but it is unlikely and should not be attempted. Even though the NFIP carrier may accept any documents you provide and negotiate with you on your claim and even offer a payment, this does not mean that a Proof of Loss is not required nor does it mean that the deadline for filing has been or will be waived. Even though you may be dealing with a WYO carrier and it is adjusting and paying your claim, it does not have the authority to waive any requirement of the SFIP, including the requirements pertaining to the Proof of Loss.

Q: What should I expect from the adjuster?

A: You should expect the adjuster to be courteous and helpful, as well as prompt. Flood adjusters are required to have special training. An adjuster should notify you, after you have filed a notice of your claim, and provide you with contact information. He or she will generally attempt to inspect your property within a week after receiving the claim, but this is not always possible, especially if there has been widespread losses. However, you should maintain constant contact with the adjuster until he or she has prepared a repair estimate for your house and a personal property inventory. Remember that the deadline for filing a Proof of Loss starts on the date of the loss. The more time the adjuster takes to finish the inspection and report, the less time you have to review or challenge his estimate.

Q: Am I entitled to any payments before my claim is settled, such as for living expenses, if I am unable to return to my home?

A: You are not entitled to living expenses under the SFIP, but you are entitled to partial payments. You should discuss this with the adjuster. Usually, partial payments are made if requested and are initially applied toward the contents coverage. Appropriate adjustments are made when a final settlement is made.

Q: Should I make temporary repairs?

A: It is best if no repairs are made before the adjuster inspects the property. However, you are required to mitigate your damages. This means that you are required to protect your property and to minimize the damage. If you throw away any damaged personal property or make any repairs or demolish any part of the structure before it is inspected by the adjuster, you should make sure that you have documented everything and pictures will be especially helpful to do this.

Q: Am I required to accept the adjuster’s repair estimate?

A: No. If you disagree with the adjuster’s repair estimate, you have the right to obtain your own repair estimate. Or, you can submit additional information to the adjuster for his or her consideration. However, remember that you must comply with the deadline for filing a Proof of Loss. Sometimes, after widespread losses, it takes longer for the adjuster to complete his report. Most of the time, policyholders will wait to receive the adjuster’s repair estimate before seeking their own estimate. Contractors are also busy and obtaining estimates, on a timely basis, can be difficult, if not impossible. If you suffer a substantial loss, you should attempt to obtain an independent estimate immediately after the loss. If you wait on the adjuster’s estimate, you may not have time to effectively challenge items in his estimate you disagree with.

Q: If the adjuster fails to provide me a Proof of Loss form, is it necessary for me to file one?

A: Yes. It is the duty and responsibility of the insured to complete and file a Proof of Loss whether it is furnished to you by the adjuster or not.

Q: Am I required to send any documents or information with my Proof of Loss?

A: Yes. You must provide sufficient documentation to support the amount requested in your Proof of Loss. Obviously, if you agree with the adjuster’s repair estimate, it will be sufficient to include the repair estimate with your Proof of Loss. If you do not agree with the adjuster’s repair estimate, you should submit your own documentation. The submission of only a Proof of Loss, without supporting documentation, is not sufficient.

Q: If my claim is not handled properly and it results in additional losses to me, can I recover these losses?

A: No. These losses are called “extra-contractual” and are not recoverable. If your claim pertains to procurement of a policy, such as the failure of your agent to obtain adequate insurance for you, you may have a claim, but it would be a State law claim separate and apart from your flood claim.

Q: Do State laws apply to my flood claim?

A: No. The interpretation and enforcement of the flood policy is governed by Federal law and State laws do not apply.

Q: When should I expect to receive payment on my claim?

A: If you agree with the adjuster’s repair estimate or otherwise reach an agreement with the NFIP carrier, and file a proper and timely Proof of Loss, payment should be made within 60 days after the submission of your Proof of Loss.

Q: If I disagree with the amount allowed on my claim, should I file an appeal?

A: You have the right to appeal if you disagree with the denial of your claim, in whole or in part. However, this does not extend any time period applicable to your claim. Your Proof of Loss must still be timely filed and, if you choose to file a lawsuit, it must also be timely filed, whether there has been a final decision on your appeal or not.

Q: What if I agree with the adjuster concerning which items were damaged, but cannot agree on the monetary amount of the damages?

A: If the only dispute is the monetary amount of damages or the method of repair, you can request an appraisal. However, if there is a disagreement regarding what was damaged or there are any questions concerning coverage, appraisal is not available. Appraisal is a process where you choose an appraiser and the insurance carrier chooses an appraiser and the two appraisers attempt to reach an agreement concerning the true amount of the loss. If they are unable to agree, they select an umpire and the decision of any two determines the amount of the loss. You cannot request an appraisal if you have previously filed an appeal. However, a request for an appraisal can usually be made after a lawsuit is filed.

Q: If the damage to my building is such that I cannot repair it in compliance with flood plain requirements or it would be more economically feasible to demolish it and rebuild it to comply with code requirements, am I entitled to be paid for a total loss since it will be necessary for me to demolish my building?

A: No. A flood policy is not a valued policy. Even though most states have a “valued policy” statute, state law does not apply to a SFIP. You are only paid for the damage sustained directly as a result of flooding. You are not entitled to the value of any undamaged or repairable portion of your building, even though you may be required to tear it down. This is sometimes referred to as a “constructive total loss”. The NFIP does not pay for a constructive total loss.

Q: What does it mean if my house is determined to be “substantially damaged”?

A: If your property sustains damages as a result of a flood, the local Building Inspection Department or other appropriate governmental office or official, will inspect your building to determine if it has been substantially damaged. Substantial damage means that your structure has sustained damage in an amount which exceeds 50% of its pre-damaged value. If your structure has sustained substantial damage, you must repair or reconstruct it in compliance with current flood-plain requirements. If your property has been substantially damaged, you are entitled to ICC (Increased Cost of Compliance) benefits.

Q: If it is necessary to file a lawsuit on my flood insurance claim, can I collect interest and attorney’s fees?

A: No. Since the losses are paid from U.S. Treasury funds, neither interest nor attorney’s fees are payable under the National Flood Insurance Act. However, you may be entitled to attorney’s fees under the Equal Access to Judgment Act (EAJA), although this issue is in litigation at this time.

Q: If I am entitled to ICC payments, are there any time periods which apply?

A: Yes. The SFIP requires that the policyholder must complete mitigation activity, such as demolition and elevation, within two years from the date of determination of substantial damage. However, this time period has been extended for an additional two years (for a total of four years) for all claims on or after June 1, 2005.

Q: Can I recover for damage to my cars, boats or other vehicles which were located 1 In a Memorandum from David Maurstad, dated March 14, 2006, No. W-06019, this waiver was granted in anticipation of an increased number of claims, and the intention of FEMA to increase the two year time frame to four years in an upcoming revision of the SFIP. near my structure when damaged by flood?

A: No. These items are not covered by the flood policy, but there may be coverage under other policies.

Q: Can I recover for damages to my swimming pool and swimming pool enclosure?

A: No. These damages are not recoverable under the flood policy. There may be coverage under other policies.

Q: Can I recover overhead and profit as a part of my repair costs?

A: Yes. If a contractor is hired to perform the work, overhead and profit are recoverable. Overhead and profit are usually calculated as a percentage of the repair costs. The customary percentage is twenty percent. However, overhead and profit is not applied to: carpeting; outside service charges, such as plumber, electrician or appliance service calls; or, repairs made by the insured ( except an allowance can be made for the insured’s time and expense in purchasing materials, not to exceed 10 percent). Also, appropriate sales taxes are recoverable.

Q: My condominium association has an SFIP on the condominium building. I also purchased a separate flood dwelling policy. What does my individual policy pay?

A: In regard to contents coverage (Coverage B), your individual policy pays for all losses to your personal property up to the contents limits of your policy. In regard to building coverage (Coverage A), the RCBAP and your individual Dwelling Policy cover the same property. Some states have statutes which specify which building items are to be insured by the condominium association and which items are to be insured by the owner. In the event of loss, each policy pays the damage it is responsible for under the statute. Such state laws are not applicable to an SFIP. The two policies cover the identical property and the RCBAP is deemed “primary”. In other words, the RCBAP pays first before any money is due under the individual unit policy. The NFIP generally takes the position that the maximum limits of liability under the RCBAP must be paid before any losses are payable under the unit policy. Therefore, if your condominium association settles for less than the full limits of liability of the RCBAP, you will not be entitled to any payments under your individual unit policy, regardless of whether you have been fully compensated for your losses.

Also, if your condominium association fails to adequately insure the condominium building, you also may not be entitled to any payments under your unit policy. Although the unit policy usually pays for assessments made by the condominium association as a result of flood damage, it does not pay if the assessment results from a loss sustained by the condominium association which was not reimbursed under the RCBAP because the building was not insured for eighty percent of its replacement cost or the maximum amount of insurance permitted by the NFIA.

The best protection for the individual unit owner is to make sure that the RCBAP is issued for the full replacement value of the building or the maximum limits permitted by the NFIA. Also, the unit owner should make sure that the condominium association does not settle for less than the full policy limits of the RCBAP, especially if the limits are less than the full replacement cost. For example, assume a four unit complex has a replacement cost value of one million dollars ($250,000 per unit) but is insured for only $800,000. This meets the eighty percent requirement for replacement coverage under the RCBAP but if the condominium association settles the RCBAP claim for $795,000, or any amount less than the policy limits, the NFIP will take the position that no payment is due under the dwelling unit policy because the RCBAP limits were not exhausted. The unit owner will be unable to collect the remaining replacement value of his unit under his individual dwelling policy. Therefore, the unit owner, even though an individual policy may be purchased, must take an active role is making sure that adequate flood insurance is purchased by the condominium association and that no claim is settled for less than the policy limits if the settlement is not sufficient to reimburse each unit owner for his full damages.

Finally, the unit owner must timely file a Proof of Loss before the expiration of the 60 day deadline even if he is unsure whether he will be entitled to any benefits under the policy. The proof of loss should reflect the full replacement cost of the repairs. If the unit owner waits until the RCBAP claim has been resolved before filing a proof of loss, it will probably be untimely and the claim will be barred.

Q: Can I recover for losses sustained as a result of mold and mildew?

A: Yes. This is an important issue because buildings which have been inundated with flood waters often sustain mold damage. The SFIP covers reasonable costs for remediation of mold damage, except when the damage results from a condition confined to the insured building or is within the insureds control, such as the insured’s failure to inspect and maintain the property after the flood recedes. Obviously, if water remains in the building for several days or the insured is not allowed to return to the building for an extended period of time, this should be taken into consideration.

If a building was inundated, but not evacuated, the SFIP will pay reasonable expenses for water extraction, dehumidifier and fan rental, and mildicide and anti-microbial application. If, after these steps have been taken, mold reappears and causes damage to the upper portions of walls and ceilings, the NFIP will honor such claims if the insured can show that mitigation attempts were made. If local officials require testing for mold and have the legal authority to require testing, the SFIP will pay reasonable costs for the test; other testing will not be covered. If, during the inspection for mold damage, the adjuster believes that such damage was not the result of the flood, but is long-term, a testing report may be obtained to determine whether the mold is a recent problem or a long-term problem. Mold and mildew can constitute a significant health hazard and you should give this condition your close attention. The SFIP will not pay for any health care costs associated with health conditions caused by mold or mildew.

Q: Can I recover damages to my deck?

A: No. The SFIP only allows payment for steps and a landing which can not exceed 16 square feet.

Courtesy of Mordecai Claim Service