Policyholders stymied by flood insurance coverage
October 20, 2011
Due to confusion about insurance losses and depreciation
, the National Flood Insurance Program recently extended the deadline to file claims related to damage caused by Hurricane Irene.
The Outer Banks Sentinel notes that an NFIP representative told homeowners at a recent meeting that building depreciation on some proofs of loss was "recoverable" and they could file a supplemental claim provided they showed evidence of nondepreciated cost payment. However, section 4B of the flood insurance claims guidance recently reissued by the agency appears to contradict this - "When insured property is eligible for replacement cost loss settlement, there is no longer any requirement to hold back the recoverable depreciation
The confusion was not limited to depreciation. Some policyholders reported that they were told damage caused by mildew and mold was covered only to the flood line. This is incorrect according to the memo, which states related damage "will be covered unless there is clear evidence of the policyholder’s failure to inspect and maintain the insured property, where it was feasible to do so."
Hurricane Irene, which battered the East Coast in August, caused more than $200 million dollars worth of damage in New York's Suffolk County alone, according to Bloomberg.