In Write Your Own (WYO) Bulletin W-18009, FEMA recently clarified Bulletin W-14058. Bulletin W-14058 addresses the Loss Settlement Provision of the Standard Flood Insurance Policy (SFIP).

In W-18009, FEMA provided additional clarification on the following:

Handling Requests for Additional Payment Prior to Repairs

Policyholders requesting supplemental payment and who have not yet completed repairs are not required to show how they spent the funds FEMA previously approved and disbursed under the same claim. If repairs have not been made, then NFIP insurance carriers (WYO Carrier or NFIP Direct) cannot deny requests for additional or supplemental payment based solely on the policyholder’s failure to provide evidence of receipts, invoices, and bank statements to show amounts paid were spent to repair or replace covered flood damage.

Claims Adjustment and Investigation

NFIP carriers have a responsibility to assist policyholders and work collaboratively toward resolution on scope of damage and cost to repair or replace covered damage. Policyholders are still tasked with the responsibility of substantiating their claim. However, NFIP carriers must work with policyholders to agree on scope and cost regardless of the documentation provided. Other responsibilities of NFIP carriers include:

  • Providing the policyholder with guidance on documentation necessary to support a request for payment.
  • Assign an adjuster to review the claim and inspect the property.
  • Retain experts on issues of causation or scope of damage.
  • Confirm the SFIP covers the property for which payment is sought. NFIP carriers analyze several factors when making this determination. A few important factors to note include whether the scope or cost includes material improvements, repair re-design, duplicate allowances, or costs incurred to comply with building codes.

The 2018 hurricane season began June 1, 2018, and ends November 30, 2018. It is important for flood insurance policyholders to understand the Loss Settlement Provision of the SFIP. Policyholders should seek clarification from a qualified property insurance professional to increase the likelihood of a smooth transition to recovery if a loss occurs this season.