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What Does Flood Insurance Cover? Perhaps Not Much!

Posted in Flood, Flood Damage, Insurance Policy, Uncategorized

Flooded.HouseAfter a flood or other substantial water event, flood insurance policy holders are often surprised to learn what is covered by their flood policy – and more surprisingly, what is NOT covered under their flood insurance policy.  As I have written about before, flood insurance is totally separate from homeowners insurance, and both provide separate coverage for different types of loss.  Specifically, homeowners insurance does not cover water damage from flood.

In order to qualify for coverage under your flood insurance policy, there must have been a “flood” in your area.  A “flood” condition occurs when water covers at least two acres of land that is normally dry, or if the water condition has damaged two or more properties in your area.  Additionally, this water has to come from either (1) overflowing or inland tidal waters, (2) unusual, rapid accumulation or runoff of surface waters from any source, or (3) mud flow (defined as mud that is carried by a flow of water, thereby creating a river of mud).  Depending on the circumstances, there may also be coverage for waterfront land that collapses or sinks as the result of water that is above anticipated cyclical levels.  Importantly, damage caused by water that overflows out of sinks, toilets, sewers, or similar sources does not qualify for flood insurance coverage, but should instead be covered by your homeowners insurance policy.

The maximum available coverage limit for flood insurance is currently $250,000.00 for your principal dwelling and $100,000.00 for personal property.  Unlike the coverage available under your homeowner’s insurance policy, the building coverage provided under your flood insurance policy is very specific as to what it covers – and what it doesn’t cover.  In order to avoid a lot of heartache later, you may want to review your policy before a loss in order to better understand the limited coverage that flood insurance actually provides.  You can click HERE to see a listing by FEMA as to the specific items that are currently covered under the standard National Flood Insurance Program policy.

The coverage for personal property loss under flood insurance is even more limited – especially for personal items in a basement.  In general, the only personal property covered below the “lowest elevated floor” would be your laundry equipment, freezer (but not refrigerator!), and portable air conditioner.  There is no coverage for any flooring, drywall, window treatments, or any other type of personal property (furniture, electronics, etc.) stored in your basement or below the lowest elevated floor.  As an additional jab, your flood insurance policy only covers your personal property on an “actual cash value basis”, as opposed to what you actually paid for the items or what it would take to replace them.

There is no flood insurance coverage for any loss of use, additional living expenses, or temporary housing while your home is being repaired.  There is also no coverage for any loss of business income.

As you can imagine, the flood insurance policies issued by the National Flood Insurance Program are not overly consumer friendly and really only provide the most basic of coverage.  Should you ever have questions regarding the coverage available under your insurance policy or the manner by which to submit a claim, please feel free to contact our office and we will do our best to answer any questions you may have.

 

Why is the Mortgage Company’s Name on My Insurance Check?

Posted in Insurance, Insurance Policy, Uncategorized

Policyholders are often shocked to learn that the loss settlement check they receive from the insurance company is payable not only to the policyholder, but to their mortgage company as well.   Homeowners insurance policies are broken down into several types of coverage – whether for the building, personal property, liability, alternative living expense, or other losses.  For certain types of coverage, the insurance policy will list the mortgage company as an “additional payee” on the policy – which means that the mortgage company’s name must be listed on any loss settlement check.  

The reason the mortgage company is listed as an “additional payee” on the insurance policy is that the mortgage company has a vested interest in insurance coverage payments issued for any loss to the insured property.  The mortgage company presumably loaned money to the policyholder and, in order to provide a guarantee of repayment, the policyholder agreed to grant the bank a mortgage on the property as collateral for the loan.  

Should the subject property be damaged or destroyed, the unrepaired property would then be worth less than before the loss and therefore, the mortgage company would not have the same amount of security for the loan as prior to the loss.  In order to protect the mortgage company’s security for the loan, the mortgage company’s name will appear on all insurance loss payments related to the property given as collateral for the loan.  Because the property protects the mortgage company in case of non-payment of the loan by the policyholder, the mortgage holder has a strong interest in making sure the property is either repaired or the outstanding loan is paid down to a point at which the loan is again fully secured by the value of the property.

The inclusion of the mortgage company’s name on the insurance check usually just affects coverage relating to the actual building on the property, since the home is usually given as collateral for the mortgage loan.  On the other hand, claims for damage to personal property, liability, or loss of use do not relate to property subject to a mortgage and therefore settlement checks on these losses would not have to include mortgage company’s name as an additional payee.

Is Flood Damage Covered Under My Homeowner’s Insurance Policy?

Posted in Flood Damage, Insurance, Insurance Policy, Storm Damage, Uncategorized, Water Damage

do-i-really-need-flood-insuranceMost people believe that when they buy homeowner’s or commercial property insurance that they will be covered for any damage that may occur to their property.  Unfortunately, as many people have painfully learned during recent flooding events, the normal policy of homeowner’s property insurance does NOT provide coverage for damage caused by “rising water” or flood.  This realization often comes too late for property owners and only after catastrophic damage has occurred to their property due to a flooding event.

The usual policy of homeowner’s insurance will only cover storm related water damage if it is caused by “wind blown” water, as opposed to “rising” water.  A good example of “wind blown” water would be water that comes through a broken window or a roof opening caused by the storm.  On the other hand, damage caused by the buildup of rain water which eventually enters the structure and causes flooding-type damage would not be covered under the standard policy of homeowner’s insurance.

As can be easily imagined, disputes often arise between property owners and their insurance companies over whether damage was caused by “rising” water as opposed to “wind blown” water.  The property insurance company, obviously, would like to prove that the damage is from a flood event – and thereby not covered under its insurance policy – whereas the property owner would advocate that the damage was the result of water entering through an opening in the structure and thereby covered under the policy.

The best and safest course of action is for all property owners to obtain both property insurance and flood insurance – regardless of whether or not their structure is located in a flood zone.  If you ever find yourself in a dispute with your property insurance company as to whether your damage is covered under your insurance policy, it is best to seek the advice of an attorney who specializes in property insurance claim matters.

How to Determine Whether Your Property Has Been Damaged By Vibration from Adjacent Construction.

Posted in Uncategorized, Vibration Damage

VibrationPropertyDamageDevelopers and construction firms often elect to use heavy equipment, blasting or pile driving in the performance of their construction projects.   If your property is in close proximity to a construction project where heavy equipment, pile driving or blasting is being used, your property may incur damage related to the vibration caused by these activities.

If you believe your property has sustained damage due to vibration-related sources, you can assess whether your damage was the result of vibration by using any of the following methods:

Pre-Construction Condition Surveys – Prior to beginning the construction project, the contractor most likely prepared a pre-construction condition survey of the properties adjacent to the construction project in order to document any existing damage to the properties.  This document may include photos and/or video of the properties, along with notations of any existing damage.  This document or report is usually available from the building contractor or developer.

Seismograph Reports – A seismograph can be used to monitor the vibrations being caused by the construction activities and to document the intensity of the vibration.  An analysis of this data would help determine whether the vibration intensities reached a level that could have caused damage to your property.

Historical Data – In some instances, there may be historical data as to the intensity of vibration caused by the use of certain equipment.  If such information is available, it may not be necessary to use a seismograph to assess the intensity of the vibration caused by specific construction activities.  This historical data may then be further analyzed in relation to the distance between your property and the equipment being used.

Property Inspection – The inspection of your property is the easiest and most obvious manner by which to assess whether your property has incurred damage from construction-related vibration.  Most importantly, you must determine whether the current visible damage pre-existed the use of the vibration-causing equipment by the construction company.  Clearly, if the damage to your property existed prior to the beginning of the vibration causing activities, the damage is not the result of such activities.

If you believe your property has been damaged by the use of heavy equipment, pile driving, blasting, or any other vibration inducing activities, you should contact an attorney with experience handling vibration damage claims.  Our firm has handled vibration damage claims on behalf of both residential and commercial property owners.

Is Vibration Damage Covered Under My Homeowners Property Insurance Policy?

Posted in Uncategorized, Vibration Damage

la-epa-mexico-earthquake-jpg-20140418As can be easily witnessed as you drive around town, construction companies often use blasting, pile driving, dewatering and heavy equipment in the performance of large construction projects.  Many times, damage can be caused to buildings on nearby properties due to the  enormous amount of vibration generated by these activities.  The question then becomes whether the cost to repair the damage caused by this vibration is covered under the property owner’s property insurance policy.

For many years, insurance companies sought to exclude coverage for such damage through the use of the “Earth Movement” exclusion found in most policies of insurance.  Although the exact wording of the definition may change from policy to policy, the usual earth movement exclusion language is similar to the following:

  1. We do not insure for loss caused directly or indirectly by any of the following.  Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss.

………..

  1. Earth Movement, meaning earthquake, including land shock waves or tremors before, during or after a volcanic eruption; landslide, mine subsidence; mudflow; earth sinking, rising or shifting; unless direct loss by:

(1)  Fire; or

(2)  Explosion….

The question as to whether coverage should be afforded to this type of damage was heavily litigated for many years, until the Supreme Court of Florida finally clarified this issue in the case of Fayad vs. Clarendon National Insurance Company, 889 So.2d 1082 (2005).  After an in depth analysis of the issues, the answer finally given by the Florida Supreme Court was – “Maybe”.

In the Fayad case, the insured’s property had incurred a substantial amount of damage due to blasting activities taking place near their home.  When the insureds presented a claim for this damage, their insurance company denied their claim based upon the insurance policy’s Earth Movement exclusion.

Ultimately, the Florida Supreme Court found that the subject insurance policy DID provide coverage for this type of loss and that the insurance company was responsible for the payment of the insured’s damages.  The Court based its decision on the specific language of the subject insurance policy and the fact that the policy seemed to only exclude earth movement or vibration caused by a “natural event” as opposed to a manmade event.  Specifically, the Court concluded:

We interpret Clarendon’s earth movement exclusion to exclude damage caused by earth movement arising from natural events from coverage rather than damage cause by earth movement arising from any cause, including man-made events such as blasting.  

If the Supreme Court found that the policy covered this type of loss, why did I say that the Court’s ultimate answer was “Maybe”?   The reality is that insurance companies tend to learn from their mistakes and many insurance companies have since re-written their policies to clarify their intention to eliminate Earth Movement caused by any event – including manmade events such as blasting.  Therefore, if you believe you have damage to your property that may be the result of blasting, pile driving or other vibration activities, please contact our office so that we may review your situation and provide a free consultation as to your rights.

After the Storm – How to Handle the Storm Damage Claim

Posted in Erika, Hurricane, Storm Damage, Tropical Storms, Uncategorized

capture87As Tropical Storm Erika was quickly approaching landfall a few weeks ago, Floridians were correctly focused on preparing for the high winds and water that could have caused an unknown amount of damage.  As important as pre-storm preparation is, the steps you take immediately after the storm are also crucial with regard to your ability to adequately present a claim with your insurance company for the damage to your property.

Your first priority after the storm needs to be the safety of your family.  After the safety of your family is assured, you need to thoroughly document the damage to your property.  With the advent of cell phone cameras and other video devices, it is easier than ever to memorialize the damage caused by the storm and to easily provide same to your insurance carrier.  Hopefully, you also have pictures and other documentation from before the storm so that you can demonstrate to the insurance company the nature of your property and the condition of same prior to the damage.

As soon as communications allow, you should also immediately place your insurance company on notice of your loss.  Many insurance policies are now written to specifically mandate “immediate” notice of a loss, and insurance companies will often spend lots of money defending against the payment of your claim based upon an alleged “late notice” defense.  After notification of your claim, the insurance company will send an adjuster to your property to inspect the damage.  It is crucially important that you point out any and all damage to your property so that the damage can be documented.

Remember, even though the adjuster may be friendly and professional, he or she is not an advocate for the full payment of your loss.  The adjuster is employed solely by the insurance company and, whether consciously or unconsciously, his goal will be to provide the least amount of coverage for your damage.   If you are not satisfied with the treatment, coverage or payment provided to you by your insurance company, it is advisable to contact an attorney or other professional who has experience with handling property insurance claims.  Most of these professionals work on a contingency fee basis and offer a free initial consultation, so there are no out of pocket costs to obtain help with your storm damage insurance claim.

 

Hurricane Danny – Property Insurance Claims on the Horizon

Posted in Flood Damage, Hurricane, Roof Damage, Tropical Storms, Uncategorized, Water Damage

Hurricane WindsAs we watch Hurricane Danny approach the Gulf, it is hard to believe that 10 years have passed since Hurricane Charlie and three other storms caused massive damage and property insurance claims throughout Central Florida.  Although the passage of time makes it easy to think that such storm damage is unlikely to happen again, we are not immune from further visits from Mother Nature.

It is important to prepare for the eventuality of a hurricane strike now, instead of waiting until the winds begin to blow before getting your family and property ready for the storm.  First, make sure to map our your evacuation route so that if you are ordered to leave (or just want to), you already know where to go and how to get there.  Whether or not you plan to evaluate, it is crucial that you stock up on water, non-perishable foods, and power sources (batteries).  It is also important to have a reliable radio so that you can stay informed as to the storm’s progress and any evacuation instructions.  Don’t forget about your pet either, as many shelters do not allow animals and leaving Fido in the back yard is not a very good option.

Hopefully, long before the arrival of a hurricane or storm, you reviewed your policy of property insurance to verify the coverages that exist for damage caused by high winds and water.  Be aware that certain rules, exclusions and deductibles apply for damage caused by a hurricane or storm, so if you have any questions, it is advisable to seek the advice of a professional with experience handling such issues.

Lightning Strikes – Florida’s Most Underrated Disaster

Posted in Insurance, Lightning, Roof Damage, Storm Damage, Uncategorized

Lightning StrikesAlthough it doesn’t get the same attention as Florida’s other natural disasters, lightning damage led to more than 10,000 insurance claims in Florida over the past year.  Florida ranks first in the nation for both injuries caused by lightning strikes and insurance claims caused by lightning related damage. The estimated total property damage caused by lightning over the past year in Florida was nearly 74 million dollars.

Although it is impossible to predict when and where lightning will strike, it is possible to reduce the risk of lightning damage.  By installing a lightning protection system, you can essentially “ground” your property and thereby allow the damaging lightning to dissipate into the ground.  Although such systems are not perfectly reliable, they do lessen the risk of damage to your property by keeping the electricity away from the building materials which can’t handle the full force of the lightning.  Many experts also recommend the installation of lightning rods and the use of surge protectors on any electronics.

Even with such precautions, it only takes one direct lightning strike for your entire structure to go up in flames.  As always, it is important to verify that you have the appropriate property insurance coverage to protect you in case Mother Nature decides to pay your house a visit.  Should you have questions regarding what coverage may be available under your property insurance policy, contact an experienced insurance claims attorney and discuss what options are available to you under your insurance policy.

 

 

The Ultimate April Fool’s Prank – Higher Flood Insurance Rates! (It’s a joke, right?)

Posted in Flood Damage, Legislature, Uncategorized

April-FoolNormally, April 1st is known for being the one day when you can pull pranks on friends and co-workers and still escape the beating that would normally follow on any other day.  By merely yelling, “April Fools!”, you can escape judgment for all sorts of sins and misdeeds – all in the name of “good fun”.

Unfortunately, this April Fools Day will hold special meaning to property insurance policy holders in Florida because, as of April 1, 2015, the Homeowner Flood Insurance Affordability Act of 2014 goes into effect.  As history has shown, anytime the Federal government passes a law with the word “Affordability” in the title, you know you are going to have to reach for your pocketbook.  The Homeowner Flood Insurance Affordability Act was passed last year to kick the can down the road with regard to sky rocketing flood insurance premiums under the Biggert-Waters Act, but it looks like “down the road” is now staring Floridians in the face.  Although the new premium increases won’t be as draconian as the $30,000 residential flood insurance premiums homeowners were facing under the Biggert-Waters Act, Floridians can still expect to see increases of approximately 18% annually until the premium charged for flood insurance coverage is “actuarially sound” (i.e., never).

But not to worry!   A local congressman just introduced a bill entitled the Flood Insurance Premium Parity Act of 2015.  Based on this lofty sounding title, the bill is sure to solve any and all problems and make flood insurance affordable for all in perpetuity.  See – nothing to worry about.

Storm Damaged Roof? Watch Out for Scams!

Posted in Hail Damage, Roof Damage, Storm Damage, Uncategorized, Wind Damage

The  severe weather that recently swept through the area left many property owners with damage to their roofs from the storms and high winds.  When massive storm damage appears, the environment is ripe for an illegal activity that often plagues Florida – roofing scams.

The usual manner by which these roofing scams play out is that an alleged “roofer” contacts a property owner and claims that the roofer can act as an insurance adjuster to help the property owner with the insurance claim.  The crooked roofer will promise the world to the property owner in order to get the property owner to hire the roofer to “handle” the claim, and may also request that the property owner assign to the roofer all rights to any of the proceeds of the insurance claim.  The roofer will then perform substandard repairs to the property and submit an inflated bill for these services to the insurance company.  The roofer will often times, as an “additional service” to the property owner, attempt to trick the insurance company into paying for other (non-roof) portions of the property by hiding/misnaming such costs in his bill for roofing repairs.  Many of these crooked roofers are fly-by-night operators that merely swing into town after a storm event and then, once the work dries up, move on to the next town – with no intention of standing behind their roofing repairs or providing any sort of warranty.

This activity is not only unethical, but illegal as well.  Before you hire a roofing contractor, make sure you research the contractor’s track record with the Better Business Bureau and make sure the contractor provides accurate contact information in case there is an issue with their work.  Lastly, if you ever have a dispute with your insurance company, it doesn’t make sense to hire a roofing company to advocate your claim – hire either a licensed public adjuster or an attorney with experience handling insurance claim disputes.