After the Flood: Post-Disaster Insurance Considerations
Insurance Commissioner Jim Donelon is advising Louisiana home and business owners of
insurance considerations to keep in mind as they work through the recovery process.
This comes as the Federal Emergency Management Agency (FEMA) has granted National Flood
Insurance Program (NFIP) policyholders a 60-day extension to file Proofs of Loss for
claims resulting from the August flooding.
"For NFIP policyholders, there are deadlines to keep in mind as well as changes in living
situations that may necessitate adjustments to insurance coverage. For those not directly
impacted by the flooding, I encourage them to review the coverages they have in place to
ensure their property and contents are adequately protected," said Commissioner Donelon.
"As we work through the next stages of recovery there are certain insurance matters to
keep in mind that can help you avoid further hurdles in the rebuilding process."
NFIP policyholders filing claims must submit a Proof of Loss. The Proof of Loss
is a sworn statement of the amount a policyholder is claiming including necessary
supporting documentation. FEMA recently announced a
60-day extension for NFIP policyholders to submit the required
documentation giving them 120 days from the date of the flood event to submit their Proof
of Loss. Similar extensions were granted after the major flooding in Louisiana in March
2016 and in the northwest and central regions of the state in May 2015.
Filing the Proof of Loss is necessary even after filing a claim for your flood damage.
This document substantiates the insurance claim and is required before the NFIP can make
payment. If you need to file a claim as a result of the recent flooding, contact your
agent or call the NFIP at 1-800-621-FEMA (3362).
If you don't already have it, consider flood insurance. As many homeowners and
businesses recently learned, flooding is not covered by a standard homeowner's insurance
policy. Only 21 percent of Louisiana homeowner have active flood policies (source: FEMA)
yet anyone can be at risk for flooding. Moderate- to low-risk areas in Louisiana submit
more than 25 percent of NFIP claims and just four inches of flooding in a 2,000 square
foot home can result in $40,000 in damages. For more information, visit
www.floodsmart.gov.
The NFIP offers two types of coverage — building and contents. Keep in mind that
your mortgage lender may only require you to purchase flood insurance for the structure.
Building coverage will include the structure and attached items such as the electrical
system and permanent flooring. Contents coverage will cover items such as personal
belongings and furniture.
Review your auto insurance coverage. Coverage on your vehicle depends on the type
of policy you have. If you have comprehensive coverage within your policy on your vehicle,
you will be covered for damage due to flooding. However, if you have only liability coverage
or liability/ collision coverage, you will not be covered for any flood damage to your
vehicle.
Determine if you need renter's insurance. If you have been displaced and are renting
another dwelling, consider getting a short-term renter's policy or adding an endorsement to
your existing homeowners policy. Your landlord may have insurance for structural damage to
the building and may even be protected against damage caused by tenants, but none of that
protection will extend to your personal property. It will also not protect you from being
liable for damage you cause to the building inadvertently like a kitchen fire. Some
companies may offer endorsements on homeowners policies that will extend coverage to the
possessions of their policyholders while the policyholders are housed in temporary housing
or second homes. Talk to your agent about how much coverage is right for you, but remember
that renter's insurance will not cover flooding.
Beware of buying flood-damaged vehicles. Under
state law, if a vehicle has been
declared a total loss because it has flooded, it cannot be resold. The National Insurance
Crime Bureau offers a free service, VINCheck, on its website at
www.nicb.org to determine
if a vehicle has been listed as a total loss.
Consumers can also contact the Louisiana Department of Insurance with questions by
calling 1-800-259-5300 or visiting
www.ldi.la.gov.