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.

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.

tornado-damage-floridaOver the last few days, Central Florida has been pounded by torrential rain, tornadoes and high winds.  These damaging windstorms and tornados were especially violent in Manatee, Sarasota, Lee, Hillsborough and Pinellas Counties.  These thunder storms caused flooding in Shore Acres, wind damage in Siesta Key, and claimed the lives of two people in Duette.  Now that the storms have past, we are left to deal with the damage done by this weather event.  Fortunately, most people have homeowners insurance to help pay for the damage to their property, but as we have often seen, going through the insurance claim process can be a world of heartache all its own.

After the storm or tornado has past and/or the flood waters have receded, you should immediately contact your insurance company and place them on notice of your claim.  The sooner you start the insurance claim process, the better chance all parties have of accurately calculating your damage and the cost to repair same. You should also take whatever ever steps you can to mitigate the damage caused to your property and otherwise take action to keep additional damage from occurring.  You should also, to the best of your ability, make a listing of the damaged property.  Although making a listing of your damaged property can be difficult – especially when the items are missing or totally destroyed – you are the best person to know the extent of your property.  If you can’t properly itemize your lost or damaged property, most likley the insurance company will not reimbuse you for same.

After a storm or other weather event, you may also have to deal with emergency restoration companies.  These companies will come to your house soon after the damage occurs and will do the immediate repairs or restoration that may be necessary to protect your home from further damage.  These services usually include the placement of large fans or other equipment to dry out your property, the installation of tarps over your damaged roof, or other similar activities.  Although these services can often be crucial for the protection of your property, always remember that these services are very expensive and that you only have a certain amount of money under your insurance policy limits with which to repair your home.  If large sums of your policy limits are spent on these initial emergency repairs, you run the risk of not having sufficient funds remaining to repair the remainder of your home.  Therefore, it is always important to obtain an agreed upon written estimate of the work prior to the performance of same.

Lastly, it is important to remember the difference between flood insurance and wind insurance.  Your normal policy of property insurance does not cover flood damage – meaning damage caused by “rising water”, but will only cover damage caused by water which was “blown into” your home by wind.  For instance, if your property was damaged by water that had been blown in through a window or a damaged roof, your normal homeowners policy would cover it.  If the damage was caused by water rising from a nearby creek, your homeowner’s policy would not cover the damage.  It is crucial that you understand the coverages available to you prior to authorizing any repair work to your home.  If you authorize a contractor to dry out your home after a flood and then realize that you do not have flood insurance – you will be on the hook to pay the contractor out of your own pocket!

As always, should you have any questions regarding what coverage may be available to you under your insurance policy, please feel free to contact our office and we will do our best to answer any questions you may have regarding your property damage claim.

 

By now, most Floridians have heard about – or even experienced – the incredible spike in flood insurance premiums that are coming their way due to the Biggert-Waters Flood Insurance Reform Act.  In short, the Biggert-Waters act is a new federal law which attempts to address a $24 billion dollar deficit in the coffers of the National Flood Insurance Program by raising flood insurance rates across the board.

Unfortunately, the slipshod manner by which this law was enacted is going to have a catastrophic affect on the economy of Florida and the financial future of many Floridians.  The Tampa Bay Times wrote just the other day about a Seminole couple who was looking down the barrel at a 900 percent increase in their flood insurance premium.  Contrary to the initial thoughts of many, Florida is not known for incurring large amounts of flood losses.  In fact, many studies have shown that Floridians have only received about $1 in claim payouts for every $4 that Floridians have paid into the federal flood insurance program.  Despite not having a large amount of historical claims, Florida does stand out as having the most overall flood policies issued – over 2 million policies and counting.  Because of the sheer number of these policies, Florida must bear the brunt of the steep rise in premiums.

But – even if the Feds have thrown Florida under the bus, help may be on the way from our Florida legislature.   State Senator Jeff Brandes of St. Petersburg has said that he is close to filing a bill that would encourage private insurance companies to offer flood insurance in Florida.  Normally, flood insurance is not provided under your normal homeowner’s insurance policy and must be purchased separately through the federal flood insurance program.  This new proposed legislation would encourage private insurance companies to offer an alternative to the federal flood coverage by making changes in the residential “surplus lines” insurance market.  In general, surplus lines insurance carriers are not as regulated as “normal” insurance carriers and are not subject to many of Florida’s laws and requirements (including rate regulation).  Lloyds of London, for instance, is a surplus lines carrier, as opposed to State Farm Florida Insurance Company, which is a “non-surplus lines” insurance company and therefore subject to the laws and regulations of Florida.

It has become clear that any relief for Florida property owners will have to come from reforms at the State level as opposed to waiting for the Federal government to take action.  Considering the large available market for the issuance of private flood insurance policies and the relatively low occurrence of flood claims, Florida may well turn out to be quite a profitable endeavor for a private insurance carrier willing to take on the risk.

 

Water DamageAlthough hurricanes, earthquakes, and sinkholes get the majority of the attention in the news, the vast majority of insurance claims deal with water damage to property.  These claims are generally broken into two categories – flood damage and water leak/seapage damage.  Flood claims revolve around damage caused by “rising water”, as opposed to other types of water losses which could come from leaky pipes, water blown through windows as the result of a storm, or overflow from appliances. 

With regard to the avoidance of damage caused by a flood – well, that’s between you and Mother Nature.  With regard to protecting your property from other types of water damage, you may find the following tips helpful: 

1.  Know the location of water valves.  Make sure everyone knows where the main valve is located and how to turn the water off.

2.  Monitor utility bills.  An unusually high water bill could signal a water leak.

3.  Turn off water before traveling.  Turn the water off at the main valve or directly on major appliances. Consider leaving a house key and contact information with a neighbor or trusted friend and ask the person to check the inside and outside of your home periodically while you are away

4.  Inspect your home regularly for signs and sources of moisture.   After a storm or rain shower, check for water stains or odors inside your house.  Create a maintenance schedule to check the following sources of water leaks on a regular basis:

Hot water heaters – Hot water heaters may rust or develop cracks over time. Check your water heater for rust and deterioration every year. Check the drain pan for water and ensure that the drain line for the overflow pan is not clogged. Drain and clean the water heater as recommended by the manufacturer.

Garbage disposal – Routinely check for cracks or other sources of leaks.

A/C drain lines – Damage can occur when the line that drains condensation from the evaporator coils becomes clogged and water overflows from the drip pan. Periodically check the drip pan for water and consider an annual service call to reduce the buildup of algae and mold in the drain line.

Indoor and outdoor pipes and faucets – Routinely check indoor pipes under cabinets and sinks for leaks, rust, and any signs of deterioration. Minimize the potential for water damage from frozen and broken outdoor pipes by insulating supply lines (in attics, crawlspaces, and exterior walls), protecting exposed outdoor faucets, sealing gaps in exterior walls, and maintaining adequate heat in your home.

Appliance hoses – Broken hoses are among the most common causes of water damage. Regularly inspect hoses and hose fittings on washing machines, icemakers, and dishwashers for kinks, cracks, bulges, or deterioration. Replace standard rubber washing machine hoses every two to five years or more often if they are showing signs of wear. Consider using steel-reinforced hoses for longer life.

Showers, tubs, sinks, toilets, windows, and doors – Water leaks around bathtubs, showers, sinks, and toilets can cause damage because the leak is often out of sight. To prevent leaks, make sure you have a watertight seal of caulk around tubs, sinks, toilets, tubs, shower stalls, windows, and doors. Cracks or mold on caulk or tile grout may indicate that you do not have a watertight seal. Remove all caulk or grout, clean and dry the surface thoroughly, and apply fresh caulk. Do not apply new caulk or grout on top of the old materials.

Attics and ceilings – Routinely check for wet insulation and water stains.

Wallpaper – Routinely check for bubbling, peeling, and stains.

Roofs – Keep roofs free of debris that can damage roofing and allow water to seep in. Trim tree branches to prevent them from rubbing and damaging the roof.

Repair missing or damaged shingles – Properly seal any cracks around chimneys, skylights, and vents. Check metal flashing for holes, cracks, or other damage. Replace flashing or use silicone caulk to seal any openings.

Rain gutters and downspouts – Direct rainwater away from your home. Keep gutters clear and make sure downspouts are long enough to carry water away from your foundation. Gutters that are filled with leaves and other debris allow water to back up on the roof, which can result in water damage to eaves and roofing material.

Sump pumps – Sump pumps are the first line of defense in preventing water from seeping into basements. Periodically check the sump and remove any debris that could clog the pump. Consider installing a battery-powered backup to protect your basement during power outages.

Landscape – Yards should slope away from the house to prevent puddling near the foundation or under pier and beam houses. Do not allow sprinklers or sprinkler heads to soak the exterior of your house.

Trust me – with regard to water damage, an ounce of prevention is worth a pound of cure.  A few years ago, we had a water leak at our house that resulted in our being out of the home for over 77 nights!  One tiny valve behind a toilet in my daughter’s bathroom broke free while we were on vacation and the resultant leak destroyed the hardwood flooring throughout our entire house and even seeped up the walls for approximately three feet!  Even with the best preparations, accidents may be unavoidable.  Therefore, it is vitally important that you verify that you have sufficient coverage on your homeowner’s insurance policy to protect you from water damage.  If you have any questions regarding your insurance policy or what coverages it may provide, you should contact an insurance claim lawyer to examine your policy and explain what benefits your policy may provide for this type of loss.

Pursuant to a new Federal law, premiums for residential flood insurance in Florida may soon be as high as $24,000 a year.  A new law, the Biggert-Waters Flood Insurance Reform Act, was enacted by Congress in 2012 as a knee jerk reaction to the recent large scale disasters such as hurricanes Katrina and Sandy.  Proponents of the new law stated that the passage of this law was necessary in order to make the federal flood insurance “fiscally sound”. 

People who bought homes in high-risk areas after the law was passed in July 2012 may have received the same flood insurance rates as the previous owners.  When these new owners renew their flood insurance policies, they will be required to get an elevation certificate – which will most likely cause the amount they pay for flood insurance to explode.  Much of the potential rate increase will be tied to the height of the home’s foundation as opposed to the base flood level.  It is speculated that a home at 3 feet below the base flood elevation may see rates increase to approximately $6,500 per year, and a home at 6 feet below the base flood elevation level may see a rate of $15,000 per year.  Oh – and remember that coverage limits for federal flood insurance is capped at $250,000 – regardless of the value of your home.

An article in the St. Pete Times today pointed out two specific examples of how this new law will affect Pinellas County residents.  In one example, a home was built in 1960 and was purchased in March of this year for $148,000.  Since this home is 7 feet below the base elevation, its annual flood insurance premium will soon be $22,400.  Another example was a 1956 home which is 8 feet below the base flood level.  This homeowner now pays $1,960 for his flood insurance, but next year his premium will be $29,100.  As a general rule, current property owners in the “A” flood zone who are now paying approximately $2,000 a year for flood insurance will see their premiums jump 25% in October of this year, and these premiums will continue to rise over the next eight years to approximately $11,000 per year.

Clearly, the Biggert-Waters Flood Insurance Reform Act will be catestrophic to the real estate market in Florida and beyond.  As for prospective purchasers of waterfront property in Florida, make sure you know what you are getting into as it appears that the days of affordable flood insurance are in the rear view mirror.

Property damage caused by mold can be a real problem – especially here in Florida.  The combination of Florida’s humid climate and often rainy weather create the perfect petri dish for the creation and growth of toxic and damaging mold.  Fortunately, most homeowner’s insurance policies provide coverage for the damage caused to your property by mold.  Unfortunately, the coverage provided by most policies is extremely limited.  Up until a few years ago, damage caused by mold was covered under Coverage A of your homeowner’s insurance policy.  Coverage A of your policy provides coverage to the main structure and sets forth a policy limit which, at least in theory, is related to the replacement cost of your entire home.  A few years ago, the insurance industry lobbied for and were allowed to alter their policies to include the following language: 

Fungi, Wet or Dry Rot, Yest or Bacteria.

a.   We will pay up to $10,000 for:

(1)  The total of all loss payable under Section I – Property Coverages caused by “fungi”, wet or dry rot, yeast or bacteria;

(2) The cost to remove “fungi”, wet or dry rot, yeast or bacteria from property covered under Section I – Property Coverages;

(3) The cost to tear out and replace any part of the building or other covered property as needed to gain access to the “fungi”, wet or dry rot, yeast or bacteria; and

(4) The cost of testing of air or property to confirm the absence, presence or level of “fungi”, wet or dry rot, yeast or bacteria; whether performed prior to, during or after removal, repair, restoration or replacement.

The cost of such testing will be provided only to the extent that there is a reason to believe that there is the presence of “fungi”, wet or dry rot, yeast or bacteria.

Now – what does all that mean?  There are two kickers to this policy language.  First, no matter how catastrophic your damage is or how high the cost to repair – your policy will only provide coverage for up to $10,000 for these repairs.  Secondly, the insurance company can deduct from this limit the amount the insurance company spent initially investigating this loss!  In other words, if mold caused $50,000 worth of damage to your home and, upon contacting the insurance company, the carrier spends $2,500 investigating the existence of the mold damage and calculating the amount of the loss, you would only be provided coverage for $7,500 to repair your home ($10,000 coverage minus $2,500 investigation expense incurred by carrier).  You would then be on the hook for the remaining cost of repairing your property. 

Although the mold coverage available under your homeowner’s insurance policy may be very limited, there may be other portions of your policy which may provide coverage.  Therefore, it is important to seek legal advice from an attorney with experience with water and mold claims in order to best protect your rights.

After watching scores of television commercials and other paid advertisements touting the supporting and nurturing nature of insurance companies, one can’t help but feel that the “good hands people” will always act “like a good neighbor” once a policy holder incurs a loss.  After years of practicing insurance claims law, we have learned the unfortunate truth that insurance companies – like all big corporations – are only after one thing.  Profit!  Unfortunately, the way the insurance companies make this profit is by collecting insurance premiums from its insureds for years and then, upon the placement of a claim by its insured, denying or otherwise minimizing the payment the insurance company makes to the insured on the claim.

A perfect example of this attitute was reflected in a claim we recently resolved for one of our clients.  Our client was a 90 year old gentleman who had served his country honorably in the military for decades and had even parachuted into France the day before D-Day!  He was one of the original members of USAA Property and Casualty Insurance and had been insured by them for 60 years – without ever having made a claim!  After noticing a substantial amount of cracking to his house, he placed a sinkhole claim with his insurance company, only to be summarily denied – in spite of the fact that the report from the insurance company’s expert clearly reflected sinkhole activity and that sinkhole activity had been confirmed to be a cause of loss to all of the other houses in his neighborhood!  After vigorously pursuing this matter for our client, the insurance company eventually agreed to a substantial settlement which allowed our client to finally repair his home.

Although insurance companies will often try to do the right thing, their judgment is too often clouded by their desire to keep your premium dollars in the insurance company’s coffers.  If you ever have the unfortunate experience of incurring a loss or other damage, make sure you seek the advice and counsel of an insurance claim professional who can explain your rights and make sure you are appropriately compensated for your loss.