National Flood Program

After every major flood event, I am contacted by at least one business owner and/or condominium owner who suffered flood damage, filed their claim with their NFIP1 Flood Insurance Company (Allstate, Hartford, Wright Flood, Farmers, FEMA, etc.), and was then told by either the flood insurance company or adjuster that the flood insurance policy did not cover all of the buildings or structures on the property. The business owners are enraged because they were under the impression that all buildings on the property were covered.
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When a National Flood Insurance Program (“NFIP”) insured is not satisfied with the payment for flood-related losses, the NFIP insured is directed to three options:1

  1. The NFIP insured may file an appeal with the Federal Emergency Management Agency (“FEMA”) within 60 days of the NFIP insurer’s written denial or partial denial of the requested claim amount.2
  2. The NFIP insured can invoke the Appraisal Provision of her policy. NOTE: The NFIP insured may not file option one above, the appeal with FEMA, if the Appraisal Provision is invoked.
  3. The NFIP insured may file a lawsuit within one year of the date of the written denial of all or part of the NFIP insured’s claim. NOTE: The filing of a lawsuit precludes option one, the appeal, and option two, the appraisal process, as those are considered pre-litigation administrative remedies.
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Flood insurance claims are different than regular property insurance claims because virtually all flood insurance claims have to follow federal regulations. The vast majority of all flood insurance policies are written through the National Flood Program. Even if a private company known as a Write Your Own (WYO) is listed as the insurer on the first pages of the policy, these insurers are merely participants in the National Flood Program and the ultimate payments do not come from them but out of the United States Treasury.
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A case recently came in front of the court regarding a claim for damage caused by Hurricane Irma. The case is Rodriguez v. Wright National Flood Ins. Co., No. 4:18-cv-10077 (S.D. Fla. Aug. 14, 2018). In Rodriguez, the defendant, Wright National Flood Insurance Company, a write-your-own insurance carrier that is part of the government’s National Flood Insurance Program (“NFIP”), insured plaintiff’s property in Key West, Florida, under a Standard Flood Insurance Policy (“SFIP”).
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