The situation along the Texas coast, as well as Houston and surrounding areas, is dire. There is hurricane damage and flooding unlike anything we’ve ever seen. Flooding from Hurricane Irma in Florida and the Caribbean follows close behind. Property damage may be inevitable for most, but it’s comforting to know that this catastrophic event isn’t beyond hope.
Take action: What to do right now if you’ve been affected by flooding
If you or your family has been impacted by the flooding in Houston and surrounding areas, please know that our hearts and our prayers are with you.
For homeowners with property damaged by the hurricane or flooding, there are several steps you can take to safeguard your belongings:
File a claim as soon as possible.
- First and foremost: “Know what your policy does and does not cover,” Dan Karr, founder of independent insurance grading website ValChoice, says,
- Complete a property damage inspection in writing and on a 1004D form, unless specified otherwise. In addition, Karr advises, “Notify the company that you will be filing a claim. Do this within three days.”
- Document water levels in your home and/or car using photo, video, and detailed notes. “Hurricane Harvey was such an unusual catastrophic event that many of the normal rules of a property claim go out the window, so to speak,” John Espenschied, Agency Principal of Insurance Brokers Group, says. “Obviously, the number one goal is to make sure your family is safe. And second is to contact your insurance agent or insurance company to file a claim. Hopefully, with the massive amount of rain produced by Harvey, homeowners decided to carry flood insurance.” Espenschied’s number one suggestion to any homeowners affected by the flood? File a claim even before the water recedes. This will get your name on the list for claims adjusters.
Begin making a list of belongings that have been lost or damaged (or update your home inventory list) while it’s fresh on your mind. Karr says that for each item in a claim, you’ll need to know its replacement cost. And have proof you owned the item. “This needs to be from a credible third party. If you know the value of the claim, you will be able to negotiate more effectively,” he says.
- File multiple claims as needed. Depending on the kind of damage and type of property damaged, Trent says, the insured may need to file more than one claim. (Windstorm, flood, homeowners’, auto, watercraft, etc.) “From there, the insurer will have an adjuster work with the client to document the extent of the damages and identify where coverage is provided. A good agent will ask questions surrounding the loss. They’ll provide the proper guidance for that insured’s specific needs. And they’ll start the claims process as soon as possible,” she explains.
- Never accept the first offer in a claim payout. “And never get coerced into accepting a deal quickly. Insurers close for quick closure to minimize the payment and get a release signed,” Karr explains. Karr also recommends keeping detailed notes of every conversation and potentially hiring third-parties for assessment, like contractors, public adjusters, and lawyers.
- Remove as much water as possible before mold develops. “A flooded home is always a terribly unfortunate circumstance,” Luis Gazitua, partner at JAG Insurance Group, says. “Some insurance policies cover water restoration services to extract the water to remedy the problem; otherwise, the consumer is required to assume the cost. This is the most pertinent step to avoid further home damage.” The longer the water sits, the more it settles into its surroundings.
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Understand the new Hailstorm Bill.
- The new “Hailstorm Bill,” Texas House Bill 1774/Senate Bill 10 recently passed by Governor Greg Abbott, went into effect September 1, 2017. “The new law is simply adding a checks and balances system to stop the lawsuit abuse that was encouraged by third-party advisors to policyholders,” Ashleigh Cloud Trent, CAPI, CPRIA, member of the nonprofit, collaborative group Private Risk Management Association (PRMA) and insurance advisor with Swingle Collins and Associates in Dallas, Texas, says.
- The bill provides insurers with additional rights that may or may not affect those of the policyholders. “The circumstances addressed in HB 1774 have never been an issue for any of our clients,” Trent says. “Claims disputes are only an issue when the insured believes that their insurer is not meeting their duties after a loss or engaging in bad-faith conduct. A good agent will place your policy with a quality carrier who practices excellent claims handling. There the likelihood of a dispute is lessened.”
- Homeowners should read through the new Hailstorm Bill in full. Then, consult with an attorney as needed to see how you may be affected by any changes that take place on September 1, 2017. From Trent’s perspective, “The insurance claims process for Texas insurance policyholders will not change when HB 1774 takes effect on September 1.”
Realize there’s still time.
- “Relating to Hurricane Harvey, House Bill 1774 does not apply to claims with the Texas Windstorm Insurance Association (TWIA) or the National Flood Insurance Program (NFIP). The insurers impacted the most by this storm,” Trent explains.
- The Texas Department of Insurance will continue to accept and handle any complaints about insurers.
- Insureds still have all the legal remedies available under the consumer protection law in the event an insurer engages in bad-faith conduct.
- Texas has some of the strongest consumer protections in the nation against insurers that unfairly deny or delay claims, Trent confirms.
- Most importantly, policyholders with covered damages maintain the same rights during an insurance claim whether they file their claim before or after September 1. “In the after-hours of Hurricane Harvey, panicked clients were contacting me desperate to file claims before September 1. Social media and news outlets were convincing Texans that if they didn’t file a claim before September 1 that they would have no legal remedy for bad-faith claims handling by insurers. This is simply not the case,” Trent says.
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Stay aware for the future.
- When buying a piece of property, always determine the home’s flood zone and elevation level. Gazitua says, “I recommend that my clients speak with neighbors to get a clear sense on how frequently floods occur in the area. Flood insurance used to be an overlooked policy, but with rising sea levels, it is an escalating planning factor for homeowners.”
- Get quotes on flood insurance. As Gazitua explains, cost can depend on the property. Typically for a single-family home, prices for flood insurance vary between $500-$3,000 annually. Flood insurance rates remain the same no matter which insurance company you choose. “And if you have existing flood insurance in your policy, you can be grandfathered in to any national flood programs,” Gazitua says.
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For those affected by flooding, our hearts are with you. Down but not out, the best way to move forward is to take it one step at a time. Please don’t hesitate to reach out during this time with any questions — we’re prepared to help our clients right now. If we currently service your loan, click here to learn more about mortgage relief for borrowers of affected properties.
For educational purposes only. Please contact your qualified professional for specific guidance.
Sources deemed reliable but not guaranteed.