settling property insuranceclaims - wisconsin · 2018-09-26 · settling property insurance claims...

PI-084 (R 09/2018)

• What to do after a loss• How to settle an insurance claim• Flood insurance• Tips on what to do before a loss

oci.wi.gov P.O.Box7873•Madison,WI53707-7873

State of WiSconSin office of the commiSSioner of inSurance

Settling Property InsuranceClaims

https://oci.wi.gov/pages/homepage.aspx

2State of Wisconsin, Office of the Commissioner of InsuranceSettling Property Insurance Claims

The mission of the Office of the commissioner of insurance . . .

Leading the way in informing and protecting the public and responding to their insurance needs.

Ifyouhaveaspecificcomplaintaboutyourinsurance,referitfirstto the insurance company or agent involved. If you do not receive satisfactoryanswers,contacttheOfficeoftheCommissionerofInsurance(OCI).

Visit oci.wi.gov tofileacomplaintonlineortoprintacomplaintform.

Phone(608)266-0103(Madison)or(800)236-8517(Statewide)

mailing addressOfficeoftheCommissionerofInsuranceP.O. Box 7873Madison,WI53707-7873

[email protected],phonenumber,andemailaddress.

Deaf, hearing, or speech impaired callers mayreach OCI through WI TRS.

SettLing ProPerty inSurance cLaimS

This publication is not a legal analysis of your rights under any insurance policy or government program. Your insurance policy,programrules,Wisconsinlaw,federallaw,andcourtdecisionsestablish your rights. You may want to consult an attorney for legal guidance aboutyourspecificrights.

OCIdoesnotrepresentthe information in this publicationiscomplete,accurate or timely in all instances. All information is subject to change on aregularbasis,withoutnotice.

Publications are updated annually unless stated otherwise.

For publications online,visit oci.wi.gov

A printed copy of all OCIpublicationscan be ordered online or by calling (800) 236-8517

One copy of this publication is available fRee of charge. All materials may be printed or copied without prior permission.

STATE OF WISCONSIN - OFFIC

E O

F THE COMMISSIONER O

F IN

SUR

AN

CE

-

https://oci.wi.gov/Pages/Homepage.aspx

mailto:ocicomplaints%40wisconsin.gov?subject=Insurance%20Complaint

https://oci.wi.gov/Pages/Homepage.aspx


Table of Contents

After a Loss .................................................................................................................. 4

TheClaimProcess ........................................................................................................... 4

Rebuilding Your Home ...................................................................................................... 5

HouseholdContentsandOtherPersonalProperty .......................................................... 6

SettlingYourClaim ........................................................................................................... 7

Flood Insurance ................................................................................................................ 7

OtherInsuranceCoveragesforWaterDamage ............................................................... 14

Important Things to Remember as the Rebuilding Process Proceeds .............................15

BeforeDisasterStrikes .....................................................................................................15


Natural disasters—floods, tornadoes, wind, and ice storms—have caused substantial damage to life and property inWisconsininrecentyears.Toooften,policyholdersreceivelessfrominsurancepoliciesthantheyexpectbecausetheir property is not insured to its full value or they do not understand exactly what type of damage is covered.

Afteradisasterdamagesordestroysyourproperty,youwillhavemanyquestionsandbefacedwithmanydecisions.Concernsabouttemporaryshelter,emergencyrepairs,andthecostsofrestoringorrebuildingyourhomecanbeoverwhelming.Althoughyouhavepurchasedinsurance,youmayhavequestionsabouthowtofillout a claim form or how to best settle your claim. This publication is designed to help you answer some of the mostfrequentlyaskedquestionsaboutsettlingdisaster-relatedclaimsandgivesyousometipsonhowtobeprepared in the event of a disaster.

after a LossWhat should I do first?Notify your insurance agent as soon as possible. Your insurer may have insurance company representatives on the scene immediately following a major disaster to speed up the handling of claims. Notifyyourinsurancecompanyrepresentativeofanylosses.Ifyoumustvacateyourhome,leavewordwhere you can be contacted.

Intheeventofamajordisaster,stateandfederalagencieswillestablishDisasterAssistanceCenterstoprovide a variety of disaster relief programs to the public. Information about the location of the disaster assistance center and any toll-free assistance numbers will be published in local newspapers and broadcast on local radio and television stations.

Take steps to protect property. Maketemporaryrepairstoprotectpropertyfromfurtherdamage.Keepreceipts of what you paid for temporary repairs and include them in your insurance claim. Permanent repairs must wait until the insurance adjuster has had a chance to assess the damage. An adjuster is a person professionally trained to assess the damage.

If it is necessary for you to move into a motel or apartment temporarily because of damage caused by a perilcoveredbyyourpolicy,yourinsurancecompanywillpayreasonableandnecessaryadditionallivingexpenses. Your insurance company will also advance you money immediately if you need to replace major householditemstocontinuelivinginyourhome.Thepaymentswillbepartofyourfinalsettlement.

the claim ProcessThe claim process may begin in one of two ways.

1. Yourinsurancecompanymaysendyouaclaimformknownasa“proofoflossform”tocomplete,or

2. anadjustermayvisityourhomefirstbeforeyouareaskedtofilloutanyforms.

Ineithercase,themoreinformationyouhaveaboutyourdamagedpossessions,thefasteryourclaimgenerallycanbesettled.Havingdescriptionsoftheitems,purchasedates,andwhatitwouldcosttoreplaceor repair the items is important.

Hopefully,youhaveacopyofyourhome inventory in a safe spot. (Visit oci.wi.gov/Documents/Consumers/pi-224.pdfforOCI's Personal Property Home Inventory publication.)

Ifyoudon'thaveahomeinventory:

• Makelistsofthedamageditems>

• Takephotographsofthedamage.

• Collectrecords—oldreceipts,bills,andphotographs—tohelpestablish price and age of everything in need of replacement or repaire.

Do not throw out damaged furniture or other expensive items until the adjuster has seen them.

https://oci.wi.gov/Documents/Consumers/pi-224.pdf




Writedownbrandnamesandmodelnumbersofappliancesandelectronicequipment.Donotforgettolistitemssuchasclothing,sportsequipment,tools,china,linens,outsidefurniture,holidaydecorations,andhobby materials.

Ifyourpropertywasdestroyedoryounolongerhaveanyrecords,youwillhavetoworkfrommemory.Tryto picture the contents of every room and then write a description of what was there. Try also to remember where and when you bought each piece and about how much you paid. It may also speed up the settlement ofyourclaimifyoufindouthowmuchitwillcosttoreplacedestroyeditems.

Building DamageIdentifythestructuraldamagetoyourhomeandotherbuildingsonyourpremises,likeyourgarage,toolshed,oringroundswimmingpool.Makealistofeverythingyouwouldliketoshowtheadjusterwhenheorshearrives,forexample,cracksinthewallsordamagetothefloororceilingandmissingrooftiles.

Discusswithyouradjusterthepossibilityofstructuraldamagethatmaybelikelybutisnotvisible.Theadjuster may recommend hiring a licensed engineer or architect to inspect the property. You should also get theelectricalsystemchecked.Mostinsurancecompaniespayforsuchinspections.

Ifpossible,getwrittenbidsfromreliable,licensedcontractorsforrepairwork.Bidsshouldincludedetailsofmaterialstobeusedandpricesonaline-by-linebasis.Thismakessettlingtheclaimfasterandsimpler.

Giveyourselfseveraldaysbeforetheadjusterarrivestocompleteyourlists.Itwilltaketimeforyoutoassessdamage.Althoughyoucanalwaysnotifytheadjusterofanyadditionalitemsyouoverlooked,thismaydelaytheclaimsettlementprocess.Besuretokeepcopiesoflistsandotherdocumentsyousubmittoyourinsurancecompany.Alsokeepcopiesofallpaperworkyourinsurancecompanygivesyou.

rebuilding Your homeHow much will my insurer pay to repair/rebuild my house?Your property should be insured for its full value. To collect the full amount on apartialloss,propertymustbeinsuredtoatleast80%ofitsreplacementvalue.Replacement valueistheamountitwouldtaketocompletelyreplacethestructure.

If your policy pays actual cash value,theinsurancecompanywillpaythecostto repair or rebuild your house minus depreciation. Insurance companies use manydifferentfactorstodeterminehowmuchtodeductfordepreciation,butwithan actual cash value policy you should not expect to be reimbursed for the full amount of repairs.

Oncetheactualrepairorrebuildingiscompleted,theinsurancecompanywillpayyou the difference between the actual cash value and replacement costs up to thepolicylimits.Ifyouchoosenottorepairorrebuild,theinsurancecompanyisobligatedtopayyouonlytheactualcashvalue.Manyhomeowner’sinsurancepoliciesrequireyoutorebuildatthesamelocation,butyoumaybeabletonegotiatethisrequirementwiththeinsurancecompanyrepresentative.

Someinsurancecompaniesofferaguaranteed replacement cost policy. Guaranteed replacement cost coveragewillpaywhateveritcoststorebuildyourhomeasitwasbeforethedisaster,evenifitexceedsthepolicylimit.Forexample,ifyourinsurancepolicylimitsare$100,000anditcosts$120,000torebuildyourhouse,theinsurancecompanywouldpaytheentire$120,000underthistypeofpolicy.

If you have a guaranteed replacement cost insurance policy and building costs suddenly go up because thereisashortageofbuildingmaterialsorconstructionworkers,forexample,yourinsurancecompanywillcover the unexpected jump in costs. It will not pay for a house better than the one destroyed.

Inflationcanoften drive up replacementcosts,so without constant reassessment or an “inflation-guard” endorsement on apolicy,propertycan easily become underinsured. Contact your agent or insurance company to discuss this coverage option.


Toobtainthistypeofcoverage,youtypicallymustmeetspecificunderwritingrulesandconditionsofthecompany.Thismayincludeselectingadwellinglimitequalto100%replacementcostandincreasingtheamountofyourinsuranceonamonthly,quarterly,oryearlybasistokeepupwiththeinflationrate.

Checkwithyourinsuranceagenttodetermineifanadditionalpremiumisrequiredforguaranteedreplacementcostinsurance,andifexclusionsorconditionsapply.

Will my homeowner’s insurance policy cover the costs of meeting local/state building codes and ordinances when I repair or rebuild my home?First,check with your agent to determine whether your insurance policy includes a building code endorsementtopaytheseexpenses.Inmostcases,homeowner’sinsurancepoliciesdonotcovertheexpenseofbringingahouseuptocodeormeetingcertainordinances(includingfloodplainrequirements)ifthehousedidnotmeettheserequirementswhenitwasdestroyed.

Ifyourinsurancepolicydoesnotcoverthesecosts,checkwithfederalagenciesatthelocaldisastercentertoseeifyouareeligibleforanyfinancialassistance.

household contents and other Personal PropertyHow much will my insurance company pay for my household contents and other personal property?Mostinsurancepoliciespaytheactualcashvalue.Forexample,itmightcost$1,000toreplaceasofaattoday’sprices.Iftheaverageusefullifeofasofais20yearsandyoursofawas10yearsoldonthedayitwasdestroyed,theinsurancecompanywouldpayyou$500.

Ifyoupaidanextrapremiumforreplacementcostcoverageonyourpersonalcontents,theinsurancecompanywillfirstpayyoutheactualcashvalueasdescribedabove.Onceyouhaveactuallyreplacedtheitemsandsubmittedyourreceipts,theinsurancecompanywillpayyouthedifference.Usingtheaboveexample,theinsurancecompanywouldinitiallypayyouonly$500foryourdamagedsofa.Afteryoubuythenewonefor$1,000andpresentthereceipttoyourinsurer,theinsurancecompanywouldreimburseyouanother$500—thedifferencebetweentheactualcashvalueandthereplacementcost.Someinsurancecompaniesalsousereplacementservicestoobtaincertainitemsforyou,suchasappliances.

Keep all receipts as you begin replacing damaged items. It may be advisable to submit accumulated receiptstotheinsurancecompanyeverytwoweeksratherthansendingtheminoneatatime.

Mostpoliciesrequireyoutoreplaceyourhouseholdcontentsandpersonalpropertywithinaspecified timeperiodfromthedateofloss.Ifyoucannotmeetthistimeperiod,ask your adjustor for an extension in writing.

You may also submit a claim for storage costs incurred until your home is ready for occupancy.

Is my insurance company obligated to pay for my antique furniture, valuable paintings, and expensive jewelry?Mosthomeowner’spoliciesplacespecificdollarlimitsonitemssuchasjewelry,paintings,andsilverandwillonlypaytheactualcashvalueofantiques(whichmayormaynotbeequaltotheirappraisedprices).Youmustpurchaseadditionalcoveragetofullyinsuretheseitems.Ifyouhavenotdoneso,theymaynotbefullycoveredinyourregularhomeowner’spolicy.Contact your agent or insurer to discuss these coverage options.


Settling Your claimHow will my insurance company pay me?Your insurance policy divides your claim into two separate parts—one for the house itself and one for personal property or household contents. You may also be entitled to reimbursement for additional living expenses.Thecheckordraftforpaymentforthehouseholdcontentsclaimwillbemadeouttoyou.However,thecheckordraftforthehousemaybepayabletoyouandyourmortgageholderifthereisamortgage on your house.

Youwilllikelyreceiveanadvancecheckimmediatelyafterthedisastertocoversuchitemsasadditionallivingexpensesandclothing.Itisimportanttokeepreceiptsforallitemspurchasedwiththismoneybecausewhentheclaimisfinallysettled,theseexpenseswillbedeductedfromfuturepayments.Forexample,

• Clothingandpersonalpropertyreceiptswillbedeductedfromthepersonalpropertyorcontentscheck.

• Receipts for living expenses will be deducted from the amount allowed for additional living expenses.

I may have forgotten to include some items in my claim. Should I accept a check marked “final payment”?Wisconsinlawdoesnotpermitanycheckordrafttoindicatefinalpaymentorreleaseofclaimunlessthepolicylimitshavebeenpaidortheclaimisbeingdisputed.Forexample,ifyouforgottolistyourChristmasdecorationsbuthavealreadyacceptedacheck,simplycontactyourinsurancerepresentative.Unlesstheinsurancecompanyhaspaidtheentirelimitofyourpersonalpropertycoverage,youmaybeentitledtofurther reimbursement. It is not unusual for an insurance company to reopen a claim for additional payment. However,itisimportantyoufileanaccurateclaiminatimelyfashion.

What if the damages to my house cost more than my insurance policy covers?Ifthedamagestoyourhousecostmorethanyourinsurancepolicycovers,youshouldcheckwiththelocaldisastercentertoseeifyoumaybeeligibleforagrantorlow-interestloanthroughalocal,regional,orfederal agency.

flood insuranceThe National Flood Insurance Reform Act of 1994 (the Reform Act) made several revisions to the National FloodInsuranceProgram(NFIP).TheReformActincreasedamountsoffloodinsurancecoverage,addsmitigation insurance to help policyholders rebuild their substantially and repetitively damaged homes and businessestomeetthefloodplainmanagementcode,andincreasedthewaitingperiodfrom5to30daysbeforefloodinsuranceiseffective.

Thefollowingsectiondescribessomeofthesechangesinmoredetail,definesmitigationinsurance,andanswerssomefrequentlyaskedquestionsaboutthefloodinsuranceprogram.

Flood insurance covers loss of insured property resulting directly from flooding. What is a flood?“Flood”isdefinedintheStandardFloodInsurancePolicy(SFIP),inpart,as:

A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property) from overflow of inland or tidal waters, from unusual and rapid accumulation or runoff of surface waters from any source, or from mudflow, or collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels.

InplainEnglish,afloodisanexcessofwater(ormud)onlandthatisnormallydry.

Floodsoftenhappenwhenbodiesofwateroverflowortidesriseduetoheavyrainfallorthawingsnow.You do not have to live near water to be at risk of flooding. Aflashflood,whichcanstrikeanywherewithout


warning,occurswhenalargevolumeofrainfallswithinashorttime.AccordingtoNFIP,nearlyoneinfourfloodinsuranceclaimsarepaidonpoliciesinlow-tomoderate-riskareas.Everyonelivesinafloodzone.

Dangerousordamagingfloodsdonotalwaysmeandramatic,rushingwatersthroughthestreetsofyourhometown.Justasingleinchofwatercancausecostlydamagetoyourhome.Keepthisinmindwhenyouconsiderfloodinsurance.

Normalrunoffresultingfromrainandisolatedincidenceofseepageinbasements,withoutgeneralfloodconditions,isnotcoveredbyfederalfloodinsurancepolicies.Sewerbackupsarecoveredonlywhentheyareclearlyaresultofageneralconditionofflooding.

What is the National Flood Insurance Program?NFIP is a federal program enabling property owners in participating communities to purchase insurance pro-tectionagainstlossesfromflooding.Thisprogramisdesignedtoprovideaninsurancealternativetodisasterassistancetomeetescalatingcostsofrepairingdamagetobuildingsandtheircontentscausedbyfloods.

Participation in NFIP is based on an agreement between local communities and the federal government. ThisagreementstatesifacommunitywilladoptandenforceafloodplainmanagementordinancetoreducefuturefloodriskstonewconstructioninSpecialFloodHazardAreas(SFHAs),thefederalgovernmentwillmakefloodinsuranceavailablewithinthecommunityasafinancialprotectionagainstfloodlosses.Communitiesmustapplytotheprogramforresidentstobeeligibletobuyfloodinsurancepolicies.

TheU.S.CongressestablishedNFIPwiththepassageoftheNationalFloodInsuranceActof1968.NFIPwasbroadenedandmodifiedbythepassageoftheFloodDisasterProtectionActof1973(www.floodsmart.gov/floodsmart/)andotherlegislativemeasures.ItwasfurthermodifiedbytheNationalFloodInsuranceReform Act of 1994 (www.fema.gov/media-library/assets/documents/7281).

Who may buy flood insurance?Propertyowners,renters,andbusinessownersincommunitiesparticipatinginNFIPmaypurchasefloodinsurance.Localgovernmentofficialscantellyouifyourcommunityiseligible.Ifyourcommunityisnotalreadyintheprogram,localofficialsmaywishtocontacttheWisconsinDepartmentofNaturalResources(DNR)forassistancequalifyingforparticipation.

Rentersmaybuycontents-onlyorpersonalpropertyfloodinsurance.Condominiumcoverageisalsoavailableinqualifyingcommunities.Buildingsunderconstructionmayalsobeeligibleforcoverage.

What types of property may be insured against flood loss?Almost every type of walled and roofed building principally above ground and not entirely over water may be insuredifitisinaparticipatingcommunity.Inmostcases,thisincludesmanufactured(i.e.,mobile)homesanchoredtopermanentfoundationsbutdoesnotincludetraveltrailersorconvertedbusesorvans.Contentsof insurable walled and roofed buildings also may be insured under separate coverage.

Thecontentsofafullyenclosedbuildingarealsoeligible.Commercialstructures,multiplefamilydwellings,and single family residences are also covered for actual cash value less the deductible.

What kinds of property are NOT insurable under NFIP?• Buildings entirely

over water or principally below ground

• Gasandliquid storagetanks

• Animals,birds,fish• Aircraft

• Wharves• Piers• Bulkheads• Growing crops• Shrubbery• Land

• Livestock• Roads• Machineryorequipment

in the open

• Motorvehicles

https://www.floodsmart.gov/


https://www.fema.gov/media-library/assets/documents/7281


Besidesthelistabove,mostcontentsandfinishingmaterialsarenotcoverediftheyarelocatedinabasementorenclosurebelowthelowestelevatedfloorofanelevatedbuildingconstructedaftertheFloorInsuranceRateMap(FIRM)becameeffective.Informationontheinsurabilityofanyspecialpropertymaybeobtainedbycontactingapropertyinsuranceagentorbroker.

Are there certain buildings that cannot be covered?FloodinsuranceisnotavailableforbuildingstheAdministratoroftheFederalInsurance&MitigationAdministration(FIMA)determineshavebeendeclaredbyastateorlocalzoningauthorityorotherauthorizedauthoritytobeinviolationofstateorlocalfloodplainmanagementregulationsorordinances.Nonew policies can be written to cover such buildings nor can an existing policy be renewed.

NewconstructionorsubstantiallyimprovedstructureslocatedwithinadesignatedCoastalBarrierResourcesSystem(CBRS)arenoteligibleforfloodinsurance,butexistingstructurespre-datingCBRSdesignationareeligibleforfloodinsurancecoverage.Theseareasarelocatedinnearly400communitiesontheAtlanticandGulfcoastsandalongtheGreatLakesshoresandaredelineatedonthecommunitiesfloodmaps.If,atthetimeofaloss,itisdeterminedthebuildingislocatedinaCBRSarea,theclaimwillbedenied,thepolicycanceled,andthepremiumrefunded.

Can I buy flood insurance if my home is located in a high-risk flood area?Youcanbuyfloodinsurancenomatterwhereyoulive,aslongasyourcommunityparticipatesinNFIP,exceptinCBRSareas.

Is it true only residents of high-risk flood zones need to insure their property?Evenifyouliveinamedium-orlow-riskarea,floodinsuranceisrecommended.Ifyourhomeorbusinessisinalow-ormoderate-riskzone,yourbuildingmayqualifyforalow-costPreferredRiskPolicy(www.fema.gov/pdf/nfip/manual201105/content/09_prp.pdf).TheaveragecostofaPreferredRiskPolicyisapproximately$395peryear.

Can I buy flood insurance if my property was previously flooded?Itdoesnotmatterhowmanytimesyourhome,apartment,orbusinesshasbeenflooded.Youarestilleligibletopurchasefloodinsurance,providedyourcommunityparticipatesinNFIP.

How do I buy flood insurance?Thebestpersontohelpyoubuyfloodinsuranceistheagentortheinsurancecompanyfromwhomyouobtainyourhomeowner’sorautomobileinsurance.Floodinsurancemaybepurchasedthroughlicensedproperty or casualty insurance agents in Wisconsin.

Someinsurancecompaniesactuallyissuethefloodinsurancepolicies,inpartnershipwiththefederalgovernment,asaserviceandconveniencefortheirpolicyholders.Inthoseinstances,theinsurancecompanyhandlespremiumbillingandcollection,policyissuance,andlossadjustmentonbehalfofthefederal government.

These insurance companies are called Write Your Own (WYO) (www.fema.gov/write-your-own-wyo-program)insurers.IfyouragentorinsurancecompanyisnotintheWYOprogram,youmaybereferredtoanother agent or insurance company involved in the program. Your agent may also order the policy for you directly from the federal government.

What types of flood insurance are available through NFIP?There are also two layers of coverage available through NFIP.

1. Thefirstlayerofcoverageisemergencycoverageandisavailabletoresidentsofflood-pronecommunities as soon as the community enters the program. Rates for this emergency coverage are partiallysubsidizedbythefederalgovernment.

https://www.fema.gov/pdf/nfip/manual201105/content/09_prp.pdf

https://www.fema.gov/pdf/nfip/manual201105/content/09_prp.pdf

https://www.fema.gov/write-your-own-wyo-program

https://www.fema.gov/write-your-own-wyo-program


2. Onceafloodratemapiscompleted,asecondlayerofcoverageisavailableatactualratherthansubsidizedrates.InsuranceundertheregularprogramisonlyavailabletocommunitiesthathavepassedrequiredordinancesandhaveundergonestudiesbytheArmyCorpsofEngineers.

How are the rates determined for a flood insurance policy?Anumberoffactorsareconsideredindeterminingthepremiumforfloodinsurancecoverage.Theyinclude:

• The amount of coverage purchased

• Location

• Age of the building

• Building occupancy

• Designofthebuilding

BuildingsinSpecialFloodHazardAreas(SFHAs),elevationofthebuildinginrelationtotheBaseFloodElevationisalsoconsidered.Buildingseligibleforspeciallow-costcoverageatapredetermined,reducedpremiumratearesingle-familyandone-tofour-familydwellingslocatedinzonesB,C,andX.Fortheseexceptions,certainlosslimitationsexist.

Does a deductible apply to my coverage?Building and contents policies have separate deductibles for each. This means if your building and contents arebothdamagedduetoafloodevent,bothdeductibleswouldbeapplied.

for more information about deductibles, contact your insurance agent or company.

What if I want to purchase more insurance than NFIP offers?ManyprivateinsurancecompaniesofferExcessFloodProtection,whichprovideshigherlimitsofcoveragethanNFIP,intheeventofcatastrophiclossbyflooding.Formoreinformation,contactyourinsuranceagentor company.

flood Insurance CoveragesFloodinsuranceispurchasedintwocomponents:

• Coverageforthebuildingitself,and

• Coverageforthecontents.

ThefollowingcoveragelimitsareavailableundertheDwellingFormandtheGeneralPropertyFormoftheStandardFloodInsurancePolicy.CoveragelimitsundertheResidentialCondominiumBuildingAssociationPolicyarelistedintheNFIPFloodInsuranceManual.(www.fema.gov/media-library/assets/documents/162601)

flood Insurance Coverages

emergency Regular Program Program Building SingleFamily $35,000 $250,000 OtherResidential 100,000 250,000 Nonresidential(including 100,000 500,000 small business)

Contents Residential 10,000 100,000 Nonresidential(including 100,000 500,000 small business)




Does insurance under the program provide coverage at replacement cost?Only for single-family dwellings and residential condominium buildings if several criteria are met. Replacementcostcoverageisavailableforasingle-familydwelling,includingaresidentialcondominiumunitthatisthepolicyholder’sprincipalresidenceandisinsuredforatleast80%oftheunit’sreplacementcostatthetimeoftheloss,uptothemaximumamountofinsuranceavailableattheinceptionofthepolicyterm.

Replacementcostcoveragedoesnotapplytomanufactured(i.e.,mobile)homessmallerthancertaindimensionsspecifiedinthepolicy.LossesareadjustedonareplacementcostbasisforresidentialcondominiumbuildingsinsuredundertheResidentialCondominiumBuildingAssociationPolicy(RCBAP).

Theprincipalresidenceandthe80%insurancetovaluerequirementsforsingle-familydwellingsdonotapplytoRCBAP.However,coverageamountslessthan80%ofthebuilding’sfullreplacementcostvalueatthe time of loss will be subject to a coinsurance penalty.

Contentslossesarealwaysadjustedonanactualcashvaluebasis.Ifthereplacementcostconditionsarenotmet,thebuildinglossisalsoadjustedonanactualcashvaluebasis.Actualcashvaluemeansthereplacementcostofaninsureditemofpropertyatthetimeofloss,lessthevalueofphysicaldepreciationasto the item damaged.

Are there limitations on the amount of insurance available for certain types of property?Itemssuchasartwork,photographs,collectibles,memorabilia,rarebooks,autographeditems,jewelry,watches,gems,articlesofgold,silver,orplatinumandfursarelimitedto$2,500coverageintheaggregate.This limitation does not apply to other items that are personal property or household contents usual or incidentaltotheoccupancyofthebuildingasaresidence.ForotherlimitationsundertheStandardFloodInsurance Program see the current policy or contact a property insurance agent.

Will damage-preventing measures I have taken in my home be reimbursed by my flood insurance policy?Somewillbe.Whenyourinsuredhomeisinimminentdangerofbeingflooded,youmayreceiveuptoa$1,000reimbursementforyourdamage-preventingexpenses.Thingslikerentingstoragespacetoprotectyourbelongings,buyingsandbagsandlumbertomakeabarricade,andrentingpumpsareallthingsthatqualifyforreimbursement.Nodeductibleisappliedtothiscoverage.

Does the flood insurance dwelling policy provide additional living expenses if the insured dwelling is flood damaged and cannot be occupied while repairs are being made?No.Thepolicyonlycoversdirectphysicalflooddamagetothedwellinganddoesnotprovideadditionalliving expenses.

NOTe:Lossordamageoccurringasaresultofaflood,suchasexplosion,fire,theft,looting,etc.,maybecovered under your existing property insurance policy. You should contact your agent should such loss occur asaresultofaflood.

What is covered in my basement?Floodinsurancecoversyourhome’sfoundationelementsandequipmentthatarenecessarytosupportthestructure(forexample,furnace,waterheaters,circuitbreakers,etc.).

Itisimportanttonote,someitemsinyourbasementarecoveredunderbuildingcoverage(likeafurnace,hotwaterheater,andcircuitbreaker),andothersarecoveredundercontentscoveragethatmustbepurchasedinadditiontobuildingcoverage(forexample,yourwasheranddryer,oryourfreezerandthefoodinit).


NFIP encourages people to purchase both building and contents coverage for the most complete protection. Floodinsurancedoesnotcoverbasementimprovements,suchasfinishedwalls,floors,ceilings,orpersonalbelongingskeptinabasement.Foracompletelistofwhatiscovered,viewtheStandardFloodInsurancePolicy(SFIP)forms.(www.fema.gov/national-flood-insurance-program/standard-flood-insurance-policy-forms)

Is sewer backup covered under a flood insurance policy?Floodinsurancedoesnotcoversewerbackupsincefloodingisdefinedastheinundationofnormallydrylandbytheoverfloworriseofinlandwatersortheaccumulationofstormwaterrunoff.

Sewerbackupisalsonotcoveredunderyourhomeowner’sinsurancepolicy.Sewerbackupcoverageisanendorsementavailablethroughmostinsurancecompanies,butitmaynotbeofferedtopropertyownerswhenpurchasingcoverageifyoudonotaskforit.

If my home is flooded, will federal disaster assistance pay for my damage?No.Federaldisasterassistanceoffersloanstohelpcoverflooddamage,notcompensationforyourlosses.Eventhen,thoseloansareonlyavailableifthePresidentformallydeclaresadisaster.Lessthan10percentofallweatheremergenciesintheUnitedStatesaredeclared.

Does NFIP cover flood damage caused by hurricanes, rivers, or tidal waters?Yes,providingatleasttwoadjacentpropertiesinthearea(ortwoacres)areflooded.

Is flood damage from wind-driven rain covered?No.Whenrainentersthroughawind-damagedwindowordoororcomesthroughaholeinawallorroof,NFIPconsiderstheresultingpuddlesanddamagetobewindstorm-related,notflood-related.

Floodinsurancecoversdevastationcausedbystormsurge,wavewash,tidalwaves,ortheoverflowofanybodyofwaterovernormaldrylandareas.Althoughfloodinsurancespecificallyexcludeswindandhaildamage,thegoodnewsismosthomeowner’sinsuranceprovidessuchcoverage.

Are losses from land subsidence, sewer backup or water seepage covered?Lossesfromlandsubsidence(agradualorsuddensinkingofland)arecoveredifthedamageisadirectresultofflooding.Youarecoveredifyourpropertyisnearalakeorsimilarbodyofwaterandwavesorcurrentsfromthelakecauseyourproperty’slandtosink.

Damagecausedbysewerordrainbackuporoverflowsfromasumppumporrelatedequipmentiscoverediftheeventisadirectresultofflooding.

Seepageorleaksinyourhomearenotcovered.

Is there a waiting period for flood insurance to become effective?Yes,thereisa30-daywaitingperiodfromthetimeapolicyispurchaseduntilyouarecovered,withthefollowingexceptions:

• There is no waiting period ifyouhaveanexistingfloodinsurancepolicyandanadditionalamountoffloodinsuranceisrequiredwiththemaking,increasing,extending,orrenewingofaloan,suchasasecondmortgage,homeequityloan,orrefinancing.Coverageiseffectiveimmediately,aslongasthepremium is paid at or prior to loan closing.

• There is no waiting periodifalenderrequiresfloodinsuranceafterdeterminingitisnecessaryevenifthepropertywasnotpreviouslycoveredbyfloodinsurance.Coverageiseffectiveimmediately,aslong as the premium is paid at the completion of the loan application.

Seepage or leaks in your home are not covered.

https://www.fema.gov/national-flood-insurance-program/standard-flood-insurance-policy-forms


• There is a one-day waiting periodwhenanadditionalamountofinsuranceisrequiredasaresultofamaprevision.Thisapplieswhenthemaprevisionisfromanon-SpecialFloodHazardAreatoaSpecialFloodHazardAreaandonlyiftheendorsementisreceivedwithin13monthsfollowingthe map revision. The increased amount of coverage will be available 24 hours after the amount of coverage is applied for and the additional premium is paid.

When is mandatory flood insurance required?TheFloodDisasterProtectionActof1973andtheNationalFloodInsuranceReformActof1994mandatethepurchaseoffloodinsuranceasaconditionoffederally-regulatedfinancingforacquisitionand/orconstructionofbuildingsinSpecialFloodHazardAreas(SFHAs)ofanyparticipatingcommunity.Thepurchaseoffloodinsuranceonavoluntarybasisisfrequentlyprudent,evenoutsideofSFHAs.

TheseActsprohibitfederalagencylenders,suchastheSmallBusinessAdministration(SBA)andUnitedStatesDepartmentofAgriculture’s(USDA)RuralHousingService,andGovernment-SponsoredEnterprisesforHousing(suchasFreddieMacandFannieMae),frommaking,guaranteeing,orpurchasingaloansecuredbyrealestateormanufacturedhome(s)inanSFHA,unlessfloodinsurancehasbeenpurchasedand is maintained during the term of the loan.

Why does my mortgage lender require me to buy flood insurance?Thepurchaseoffloodinsuranceismandatoryforallfederally-backedfinancialassistancefortheacquisitionand/orconstructionofbuildingsinhigh-riskfloodareas(SpecialFloodHazardAreasorSFHAs).

Ifthepropertyisnotinahigh-riskareabutinsteadinalow-tomoderate-riskarea,thelawdoesnotrequirefloodinsurance;however,itisrecommendedsincehistoricallyaboutoneinfourfloodclaimscomefromtheselow-tomoderate-riskareas.If,duringthelifeoftheloan,themapsarerevisedandthepropertyisnowinthehigh-riskarea,yourlenderwillnotifyyouthatyoumustpurchasefloodinsurance.Ifyoudonotpurchasefloodinsurance,thelenderwillforce-placeit,whichcouldbeatamuchhigherrate.

As I read about reducing flood risk, I keep hearing the term “flood mitigation.” What does this mean?Floodmitigationreferstothemeasuresacommunitytakestocorrectandpreventfloodrisks.Theseeffortsgenerallyincludezoning,subdivision,rulesforbuildinginfloodplains,andspecial-purposefloodplainordinances.Ahomeownercanminimizeflooddamagebypreparinghisorherhomeandcontentsforaflood.

Do flood mitigation efforts affect the cost of insurance premiums?Yes,theycan.CommunitiesmayvoluntarilyparticipateintheCommunityRatingSystem(CRS),wheremitigationeffortsthatgoaboveandbeyondthebasicrequirementsofNFIPareevaluatedandgivenanumber.Thehigheracommunity’sCRSrating,thelowertheriskoffloodingandthelowerthepremiumrates for individuals in the community.

FormoreinformationonmitigationcontacttheFederalEmergencyManagementAgency(FEMA)at(312)408-5500(inChicago)or1-800-621-FEMA(3362)oronFEMA’swebsiteatwww.fema.gov/hazard-mitigation-planning-contacts.

RememBeR: When a loss occurs, file a claim with your agent. Most adjusting services brought into your community following a flood also can provide proof-of-loss forms if you need to file a flood insurance claim. The claim forms must be filed with NFIP within 60 days.

https://www.fema.gov/hazard-mitigation-planning-contacts

https://www.fema.gov/hazard-mitigation-planning-contacts


For general information on the flood insurance program, contact:

RegIONAl OffICeSNational flood Insurance Program (NfIP)

Bureau&StatisticalAgent AnnetteBurrisCFM

P.O. Box 407 Petersburg,IL62675 Phone:(217)632-7210 Fax:(217)632-7210

[email protected] www.floodsmart.gov

federal emergency management Agency (femA) Region5—MitigationDivision

(312) 408-4421 www.floodsmart.gov

If you cannot get the answers you need from the above sources, or if you have a specific complaint, please contact OCI.

other insurance coverages for Water DamageMuchoftheflooddamageinWisconsinisnotcoveredbyinsurancebecausethepropertyisnotcoveredbyNFIP.Listedbelowaretypesofpoliciesthatmayproviderecoveryforlossordamagecausedbywater:

Water DamageThehomeowner’spolicynormallydoesnotcoverflooddamagebutyourhomeowner’sinsurancepolicymaycoversomekindsofwaterdamage.Forexample,thehomeowner’sinsurancepolicywouldgenerallypayfordamagefromraincomingthroughaholeintherooforabrokenwindowaslongastheholewascausedbya disaster covered by the policy. If there is water damage, check with your agent or insurance company representative to see if it is covered.

Comprehensive Auto InsuranceFlood damage to your auto is covered if your auto insurance policy includes comprehensive coverage. If you carrycollisionwithoutcomprehensivecoverage,youarenotcoveredforflooddamage.Somecompaniesuse a drive-in claims center where an adjuster will assess the damage and often pay the claim immediately.

Carrentalreimbursementcoverageisavailablefrommostinsurersasanoptionalcoverageonyourautopolicy. This coverage will reimburse you for the rental of a car while your car is disabled due to a loss such asflood.

Personal Property floaterYourscheduleditemsofhouseholdcontentsandpersonalpropertymaybecovered,whetheronoroffthepremises,byapersonalpropertyfloaterwrittenseparatelyorasanattachmenttoahomeowner’sorfarmowner’sinsurancepolicy.Thesefloaterpoliciesaregenerallywrittenonanall-riskbasisthatincludeslossordamagebyflood.

Business PoliciesSomeformsofbusinessinsuranceprovidecoverageforlossordamagecausedbyflood.Suchfloodcoverage is generally optional and an additional premium must be paid. This coverage may be available

mailto:aburris%40nfip-iservice.com?subject=Flood%20Insurance%20Information%20Request



mailto:ocicomplaints%40wisconsin.gov?subject=Flood%20Insurance%20Issue


underMotorTruckCargoInsurancepolicies,allrisktransportationforms,baileescustomerspolicies,differenceinconditionspolicies,andall-riskbuildersriskpolicies.

manufactured Home InsuranceIfyouownamobilehome,youmayhaveamobilehomeinsurancepolicybasedonreplacementcost,actualcashvalue,ora“statedamount.”Withastatedamountpolicy,themaximumamountyoureceiveifyourhome is destroyed is the amount you agreed to when the policy was issued. The depreciation in the value of your home is not considered in the settlement.

Insuranceonmobilehomesmaybewrittenwithorwithoutfloodcoverage.Ifyouownamobilehome,checkyourpolicycarefullyandcontactyouragentortheinsurancecompanytodetermineifsuchfloodcoverage is available.

Watercraft PoliciesSomewatercraftpolicies(outboard,inboard,sailboats,etc.)mayprovidecoverageforfloodlosses.Youshouldcheckwithyouragenttoverifyifyouhavefloodcoverage.

Crop InsuranceUnlessyouarecoveredbyanallriskcropinsurancepolicyofferedbytheFederalCropInsuranceCorporationorunlessyourcropinsurancepolicyspecifiesfloodasanamedperil,youwillnotbecoveredforlossestocropsoccurringasaresultofaflood.ThevastmajorityofcropinsurancepolicieswritteninWisconsincoveronlydamageresultingfromhail,wind,andfire.

important things to remember as the rebuilding Process Proceeds

• Youmaycontactyourinsuranceadjusteragainifyouhaveadditionalinformationorfinddamageyoudidnot notice before.

• Ifyoubelievethesettlementoffermadebyyourinsurancecompanyisnotafairone,contacttheinsurer.Provide information to support your view of what you feel your claim is worth.

• Yoursettlementprobablywillnotbethesameasyourneighbor’s.Yourinsurancepolicymaybedifferentand the amount of damage to your home may be different even though you live on the same street.

• Protectyourselffromshoddyworkmanship.Useonlylicensed,reputablecontractorsandbesuretheygettheproperbuildingpermits.Bewareofcontractorswhoaskforalargeamountofmoneyupfrontandcontractorswhosebidsareamazinglylow—theymightcutcornersandleaveyouwithaconstructionorbuilding code problem after they are gone.

• Yourinsurancepolicywillpayforpropertyyouhadbeforethedisaster.Yourhomeowner’sinsurancepolicywillnotpayforexpensiveimprovementslikeatileroofifyouhadastandardfiberglassroofbefore.

• Ifyourhomewasdestroyedbeyondrepairandyoudecidetorebuildonanotherlot,topurchaseanotherhouseinsteadofrebuilding,torebuildinanotherstate,ortorentratherthanrebuild,checkyourpolicyortalktoyourinsuranceagentorinsurancecompanyrepresentative.Theremaybelimitationsonwhatyourinsurance company will pay if you do not rebuild on the same piece of land.

Before Disaster Strikes• Checkyourhomeowner’sorrenter’sinsurancepolicyforcoverageofnaturaldisasterssuchasfloods,

tornadoes,wind,andicestorms.

• Checkifyourpolicycoversdebrisremovalandsewerbackup.Thestandardhomeowner’sinsurancepolicydoesnotcovertheseifcausedbyflooding.


• Considerbuyingfederalfloodinsuranceifdamagefromrisingwaterispossible.Homeowner’s,farmandranch,renter’s,condominium,andmanufacturedhomeinsurancepoliciesdonotprovidecoveragefordamagecausedbyflooding.

• Checkyourautoinsurancepolicy.Comprehensivecoverage(otherthancollision)paysifastormorflooddamages your car.

• Knowwhatyourinsurancepolicycovers.Standardhomeowner’sinsurancepolicieslimitcoverageofsomeitems,includingstamps,securities,andcertainvaluablepapers.

• Checkthelimitsofyourhomeowner’sorrenter’sinsurancecoverage,includingpersonalpropertyorcontentscoverage.Yourlimitsmaybetoolowifreplacementcostshaverisenduetoadditions,newpurchasesorinflation.

• Updateyourinventory.Photographorvideotapeeachroomandexteriorofyourhome.Listmodelandserialnumbers,andattachsalesreceipts.

• Safeguardyourrecords.Ifyouneedtoevacuateyourhome,takeyourinsurancepoliciesandahouseholdinventory.Keepcopiesofboth,includingreceipts,inasafetydepositbox.Thisspeedsupclaimsprocessingandhelpsprovetax-deductible,uninsuredlosses.

• Listallyourpersonalproperty.Makeanitemizedlistofyourfurnishings,clothing,andvaluables.Thislistisforyourprotectionandwillhelpproveyourclaimsarevalid.Itisagoodideatotakephotosorvideosoftheseitems,aswellasofyourhomeandlandscaping.Thesephotoswillhelpadjusterssettleyourclaimand can also help prove uninsured losses that are tax deductible.

• Findoutifyourpolicycoversadditionallivingexpensestoreimburseyouforthecostoflivinginatemporary residence if you are unable to live in your home.

• Makesureyouknowyourdeductible.Youwillhavetopayatleastthismuchifyouhaveacoveredloss.

• Besuretoremember,orcarryinyourwallet,thenameandaddressoftheagentwhowroteyourfloodinsurance policy.

RememBeR: Keep the lines of communication open between you and the insurance company representatives so information can be freely exchanged and your claim can be settled quickly.

Contactoneormoreofthesepartiesifyourinsuranceclaimisnotbeingsettledpromptlyorfairly:• Theclaim-handlingpersonorclaim-handlingdepartmentofyourinsurancecompany• TheOfficeoftheCommissionerofInsurance(OCI)—Please include your name and phone number:

OCI’s Website oci.wi.gov

Phone (608)266-0103(inMadison) or (800)236-8517(statewide)

mailing Address OfficeoftheCommissionerofInsurance P.O. Box 7873 Madison,WI53707-7873

E-Mail [email protected]

PI-084 (R 09/2018)

https://oci.wi.gov/pages/homepage.aspx

mailto:ocicomplaints%40wisconsin.gov?subject=