After Irma: Why are 90% of flood claims being denied?

Nine out of 10 flood claims resolved by the National Flood Insurance Program in the early going after Hurricane Irma have been closed without payment, federal records provided to Florida officials show.

Residents help push a stranded car into a driveway along Alden Ridge Drive after heavy rain from Tropical Storm Isaac caused the nearby lake to overflow flooding the neighborhood streets of the Alden Ridge housing community in Boynton Beach in 2012. (Palm Beach Post staff file photo)

Why? The Palm Beach Post asked the Federal Emergency Management Agency.

Nearly $100 million in payments have been approved on payable flood claims, said Greta Richardson, claims branch chief with FEMA in Washington, D.C.

But it’s still early in the process, she said, and payable claims tend to take longer to resolve  than cases where officials have determined there was no qualifying damage.

“Irma was a hurricane that brought in a lot of wind damage,” Richardson said, though some areas of Florida did experience flooding as well. In contrast, Hurricane Harvey in Texas did much of its damage from flooding.

NFIP policies generally cover flooding from the ground up, such as storm surge or heavy rain causing local waterways to overflow. Standard homeowner policies tend to cover damage from, say, wind blowing off a piece of the roof and rain coming in from above.

If homeowners are not entirely sure of the cause of damage, they might file claims under both their standard home and flood policies just to be sure.

According to data federal officials gave Florida Insurance Commissioner David Altmaier last week, 195 NFIP claims administered by private partners in a Write Your Own program have been closed with payment after Irma, compared to 1,936 resolved without payment.

But there are still plenty of claims to be worked out. Fewer than 8 percent of the 24,316 flood claims mentioned had been resolved at that stage. Records provided to Altmaier showed more than $72 million in payments had been made at the time.

The average claim closed with payment was for more than $25,000.

FEMA officials urged Florida residents to buy flood coverage, because flooding is not covered in standard home insurance policies. Lenders require flood policies in certain high-risk zones, but it’s up to homeowners to make the choice in other cases. Florida has the largest share of the nation’s roughly 5 million NFIP policies, including more than 100,000 in Palm Beach County.

Most flood policies come from the federal program, though a limited number of private insurers offer such policies.

Out of 1,419 private flood claims filed so far after Irma, 269 have been closed with payment and 92 have been closed without payment, with more than 1,000 still open, state records show.

Among NFIP claims, Monroe County leads with 6,714 claims, or 29 percent of the total, according to information provided by FEMA on Monday.

That is followed by 2,870 claims in Miami-Dade County and 2,082 in Collier County.

Duval, Lee, St. John’s and Broward counties all registered more than 1,200 NFIP claims.

Palm Beach County is among the top dozen counties affected with 313 claims, though nearby Martin Co. had just 29.

As of March 31, there were more than 100,000 policies in Palm Beach County, including more than 66,000 in unincorporated areas, nearly 15,000 in Boca Raton, more than 9,000 in Boynton Beach, and more than 7,000 each in Jupiter, Palm Beach and Delray Beach.

Changes to flood maps effective this month have caused some uncertainty and anxiety among county homeowners about how their homes and properties are classified. Homeowners can talk to their agents and mortgage companies to get more information as their policies renew.

Hundreds of thousands of Florida homeowners with a choice — meaning they were not required by lenders to buy it — dropped flood insurance after Congress increased costs in recent years in an effort to tackle the flood program’s $23 billion debt load following storms including Katrina and Sandy.

Florida officials have often maintained their state often gets a bad deal as a donor market, receiving about 30 cents in claims paid for every premium dollar spent.

 

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