What is less expensive and easier to repair–a damaged floor with a ten thousand pound stone table or one without such contents? That is the question I posed to Kalon deLuise when visiting him, and his father Scott, in Denver last week. Here is a picture of us together in Providence during the First Party Claims Conference:
Kalon was working on a National Flood Insurance claim where the adjuster allowed zero expenses for the labor needed to manipulate and move contents in areas where repairs had to be made. The National Flood adjuster’s denial was based upon the fact that the policyholder had no contents coverage. I made note of the adjustment issue earlier this week in Back to Work in 2014! Claims Decisions Already Ripping Policyholders Off!.
Scott mentioned that National Flood had a policy against paying for contents manipulation unless the contents were covered. View the March 31, 2010 memo.
"Flood Insurance Guidance Concerning Contents Manipulation." The memo provides:
• Only reasonable and necessary charges for contents manipulation will be allowed.
• Contents manipulation does not extend to items being replaced in the adjuster’s estimate.
• If the contents item(s) is not covered, the cost to manipulate it is not covered.
FEMA recognizes that manipulation of undamaged insured contents may be necessary to perform covered building repair. These charges are often included in the contractor’s unit cost(s) for items being repaired or replaced and are not a separate charge to the policyholder. When contractors present an itemized breakdown of their charges and contents manipulation is a separate line item, the adjuster may separately allow for contents manipulation. Adjusters should be instructed that they may no longer make lump sum allowances or room-by-room contents manipulation allowances in the estimate without providing supporting documentation of those costs."
The movement of personal property to repair covered damage to covered real property is an expense of labor. It is not damage to "personal property." So, what makes no sense is NFIP’s claims directive to exclude this construction expense because the property owner did not have personal property coverage. Indeed, the property could have been borrowed or otherwise uncoverable under the National Flood program. The labor expense will still be incurred to move it.
But who should care? If the contractor has to spend money and time moving personal property, it is a cost to repair regardless if the personal property is covered. It is not damage to personal property payable under personal property coverage.
Positive Thought for the Day
When I’m happy inside, that’s when I feel most sexy.