the role of certified adjusters in the nfip - h2o partners · the role of certified adjusters in...

The Role of Certified Adjusters

in the NFIP

2011 National Flood Insurance ProgramClaims Adjuster Presentation

2011 NFIP Claim Presentation

Adjuster Qualifications

• Purpose

• Database

- Identification

• 5 Areas of Authorization

- Residential

- Manufactured (Mobile) Home

- Small Commercial

- Large Commercial

- Residential Condominium Building

Association Policy (RCBAP)


Authorization Requirements

• Specialized Knowledge

• Certification is a

Requirement

- Exception:

• Write Your Own (WYO) Staff

Adjusters


Flood Certification Number (FCN)

ACTIVE-2010


NFIP CERTIFICATION FORMS


Certification ContactsIServices

c/o Claims Department

P.O. Box 310

Lanham, MD 20706

Fax Number: 301-577-3421

Obtain application at

http://www.fema.gov/library/viewRecord.do?id=2581

EMAIL: [email protected]


Adjuster Education and Certification

Assurance from WYO companies and adjusting firms that inexperienced adjusters will be supervised

Responsibility of claim accuracy and quality of work

Review of claims prior to payment or denial

Co-signature on estimates, preliminary and final reports

Mandatory annual workshop attendance

Adjuster Certification cutoff date – May 31, 2011


• Authority of the Adjuster

• Knowledge of the Program

• Professionalism

Adjustment Standards and Requirements, continued



- Claims Adjustment

- Prompt Contact

- Inspection

- Origin of Loss

- Building Scope and Estimate

- Preliminary Report

- Manufactured (Mobile)Home/Travel Trailer Worksheet



Personal Property Identification Advance Payment



-Replacement Cost and Actual Cash Value

-Coverage Limitations

-Final Report

-Insured’s Copy



- Improper Flood Zones

- Incorrect Building Descriptions and Addresses

- Substantial Improvement

- Improper Named Insured

- Two or more Buildings at the Described Location

- Incorrect Mortgagee

At the time of inspection, any discrepancies noted in the physical

description of the insured risk, the policy or Declaration Page

should be referred to the Carrier

Underwriting Issues



-Proper Building Depreciation -Photographs

-Narrative Report -Salvage

-Prior Losses Checked -Proof of Loss

-Progress Notes in File -Timely Reporting

-Subrogation


Adjustment Standards and

Requirements, continued

WYO Errors – Proper

Building Scope and Estimate

Non-judgmental

Judgmental


Proper Building Scope and Estimate

• NFIP Estimate Format

–Unit cost basis

–Room-by-room

–Accurate description of rooms

–Room vs. offsets

–Line-by-line

–Individual line depreciation

–Sales tax (should be included in unit cost)


NFIP Reinspections

• Assist WYO Companies

–Information Needed

–Flood Certification Number (FCN)

–Policy Number

–Prior Loss History

–Declaration Page

–Deductible and Coverage Amounts

–Preliminary Report

–Scope Notes

–Progress Notes

–Final Report

–Photographs

–Copies of Estimates

–Paperwork on

additional damages

–Elevation Certificate

–Narrative

–APDA

– Manufactured (Mobile)

Home Worksheet


Detect Possible Waste & Abuse

• Receipts

• Serial Numbers

• Ownership

• Policies

• Waterlines

• Misrating

• Price Quotes

• Damaged Property

• Cause of Loss

• Late reporting of claim


Report Possible Waste & Abuse

• Immediately reported to the NFIP and the insurance company

• Waste and Abuse Hotline 1-800-323-8603


NFIP Fee Schedule

NFIP Fee Schedule Billing

– Gross Loss

– Increased Cost of Compliance Claims


NFIP Fee Schedule, continued

Erroneous assignment $ 70.00

Closed without payment 275.00

.01 - 1,000.00 375.00

1,000.01 - 5,000.00 600.00

5,000.01 - 10,000.00 800.00

10,000.01 - 15,000.00 925.00

15,000.01 - 25,000.00 1,025.00

25,000.01 - 35,000.00 1,175.00


NFIP Fee Schedule, continued

35,000.01 - 50,000.00 $ 1,400.00

50,000.01 - 100,000.00 3.0%, but not less than $ 1,600.00

100,000.01 - 250,000.00 2.3%, but not less than $ 3,000.00

250,000.01 - and up 2.1%, but not less than $ 5,750.00


Disaster Response

• Adjuster Coordinating Office (ACO)

• Flood Insurance Claims Office (FICO)

• Claims Coordinating Office (CCO)

• Flood Response Office (FRO)

• FEMA/Joint Field Office (JFO)

• FEMA/Area Field Office (AFO)

• FEMA/Disaster Recovery Center (DRC)


Learning Check

• What are the five categories of flood certification?

• How is depreciation for building/personal property

addressed in your scope of damages estimate?

• Name 3 possible waste and abuse issues.

• Give an example of a non-judgmental error.


The Standard Flood Insurance Policy (SFIP)


The Standard Flood Insurance Policy (SFIP)

•Three forms

–Dwelling Form

–General Property Form

–Residential Condominium Building

Association Policy (RCBAP)

Effective 12/31/2000


Dwelling Form

Read the policy!

Know the policy!

Coverage is subject to limitations,

restrictions, and exclusions.


Available Amounts of Insurance

Building Coverage

Single Family $250,000

2 - 4 Family $250,000

Personal Property Coverage

Residential $100,000


I. Agreement

• Direct Physical Loss

–Paid the correct premium

–Compliance with policy terms and conditions

–Provided accurate information and statements


II. Definitions

FLOOD


Definition of FloodA 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 from the overflow of inland or tidal

waters or from the unusual and rapid accumulation or runoff

of surface waters from any source.

KEY CRITERIA

Condition must be general

Condition must be temporary

Inundation must be present

Occurrence must be accidental


Actual Cash Value (ACV)

Replacement Cost

Less Depreciation


Basement


Building


Condominium Building


Described Location

• Shown on the policy’s Declaration Page

–This is not always the insured’s mailing address


Direct Physical Loss By or From Flood

Loss or damage to insured

property, directly caused by a

flood.

There must be evidence of

physical changes to the

property


Elevated Building


Enclosure


Improvements


Mudflow


Named Insured

• “You and Your”

- Insured(s) shown on the Declarations Page

- Your spouse, if a resident of the same household

• “Insured(s)”

- Mortgagee or loss payee


Pollutants


Pre-FIRM

Built or substantially improved on or before

December 31, 1974, or before the effective date

of the initial Flood Insurance Rate Map.


Post-FIRM

Built or substantially improved after

December 31, 1974, or on or after the

effective date of the initial Flood

Insurance Rate Map, whichever is later.


Special Flood Hazard Area (SFHA)


Special Flood Hazard Area (SFHA)

Zones that begin with the letter A or V


Flood Insurance Rate Map


Flood Insurance Rate Map

www.MSC.FEMA.gov

FEMA Flood Map Store

http://www.msc.fema.gov/


FEMA’s Map Service Center

http://www.msc.fema.gov

Where Can I find Flood Maps?


09/28/2009


SEPTEMBER 28, 2009


III. Property Covered


III. Property CoveredCoverage A- Building Property

• Dwelling

• Additions and Extensions

• Detached Garages (Bulletin W-08043)

• Materials and Supplies

• Building Under Construction

– Items that are to become a part of the building (e.g. rebar, footings, and concrete walls )

• Manufactured(Mobile)Home/Travel Trailer


Buildings

Roof

Elevated walkways

Exterior rigid walls

Load-bearing (solid)

interior walls

Stairs


Property Covered, continued

•Property items covered under Coverage A

–Awnings and canopies

–Blinds

–Built-in dishwashers

–Built-in microwave ovens

–Carpet permanently installed over unfinished flooring



•Coverage A

–Page 4 of the Dwelling Form

Built-ins



a. Any of the following items, if installed in their functioning

locations and, if necessary for operation, connected to a

power source:

(1) Central air conditioners

(2) Cisterns and the water in them

(3) Drywall for walls and ceiling in a basement and the cost of

labor to nail it, unfinished and not taped

(4) Electrical junction and circuit breaker boxes

(Complete list under Section III - Property Covered, A.8.,a & b.)


Building, continued



Tenant’s Coverage

–Condo Unit Owner’s Coverage

Coverage B - Personal Property

Page 4 of the Dwelling Form


Special Limits - $2,500


Antiques

Functional Value


–Debris Removal

– Owned anywhere

– Non-owned on or in

insured property

– Removal work

– Federal minimum wage

– Not a separate limit of liability


Coverage C - Other Coverages


Who Pays to move this boat?





–Sandbags, supplies, labor

–$1,000 costs incurred to protect

–Reasonable expenses

–Property Removed to Safety



–Condominium Loss Assessments

–Condominium Unit

–Resulting from Flood

–Common Elements

–Loss Assessment Does Not Apply

–Government Body

–Personal Property

–Violation of Policy Conditions

–Maximum Limits of Coverage

–Not an Additional Limit of Liability




Learning Check

• Is Replacement Cost available for a residential duplex?

• Can 10 percent of Coverage A be applied to a Detached

Garage that has a sleeping space in it?

• Two structures are joined by a roof, at the time of a

claim can the insured declare that the two structures be

covered under one or two policies ?

• If a “post-firm, elevated” structure has an attached

garage, what coverages are afforded in the garage

area?


Increased Cost of Compliance


Increased Cost of Compliance (ICC)Coverage D


Increased Cost of Compliance (ICC)


Increased Cost of Compliance

(ICC), continued


Increased Cost of Compliance (ICC), continued

“… damage of any origin [is] sustained by a building whereby the cost of restoring the structure to its before damaged condition would equal or exceed 50 percent of the market value of the structure before the damage occurred.”

(see 44 CFR 59.1)

OR

A structure is eligible for an ICC claim payment if

the community determines that the structure is:

Substantially damaged when:



“… a building covered by a contract for flood insurance that

has incurred flood-related damages on two occasions during

a 10-year period ending on the date of the event for which the

second claim is made, in which the cost of repairing the flood

damage, on the average, equaled or exceeded 25 percent of

the market value of the building at the time of each such flood

event.”

A Repetitive loss structure is:



• Date of Loss

– The date of loss for an ICC claim will be the date of loss

for the underlying flood claim.

– The insured has four (4) years from the date of the

declaration by the state or local official that the structure has

been substantially damaged by flood to complete the ICC

portion of the claim.

– March 14, 2006 W-06019 Memorandum to WYO

Losses after June 1,2005


Increased Cost of Compliance (ICC) The Adjuster’s Duty

• Informs the Insured of ICC coverage if the risk appears to

be Substantially Damaged

• Adjuster must submit the APDA information to the NFIP Bureau

and Statistical Agent by fax at (301) 577-3421, mail to P.O. Box 310

Lanham, MD 20706 (W-09057, October 6, 2009)

http://www.nfipiservice.com

• Obtain a copy of the signed construction contract that details

costs to perform the mitigation activity

• Provide the insured with an Increase Cost of Compliance Pamphlet

• Verify mitigation activity is in compliance with floodplain

management guidelines

http://www.nfipiservice.com/



–Partial payments are permitted

– 50 percent maximum partial payment

available

–Reasonable time for completion not to

exceed four years from date of declaration

–When mitigation procedures are completed

•ICC Claim Payment



Determining Market Value

1. Independent appraisals by a professional appraiser

2. Detailed estimates of the structure’s ACV

3. Property appraisals used for tax assessment

4. The value of buildings taken from NFIP claims data (used as a screening tool)

5. Qualified estimates by local building departments

Acceptable estimates of market value


• Regulate all development in the designated Special Flood Hazard Area (SFHA) in accordance community floodplainmanagement laws

• Ensure NFIP compliance

• Require proper permits (including Federal and State)

• Ensure completed work is compliant with local floodplain

management ordinance


Role of the Local Official


Role of the Local Official


• Provide property owner a substantial damage declaration

and remind the owner that ICC coverage could help offset compliance costs.


Information a Claims Representative will need from

the local official


• The basis for the community’s determination of substantial

damage or repetitive loss, in writing

• A copy of the applicable repetitive loss provision in the

community’s floodplain management ordinance

• If the building is in a B, C, X, or D Zone, documentation as

to why the building is required to undertake the mitigationaction


Increased Cost of Compliance (ICC)continued

• Be in writing

• Amount of damages

• Market Value

• Flood Zone

• Date of local floodplain management ordinance

• Permit required

Substantial Damage and Repetitive Loss Declaration should:



• Does ICC apply to a substantially damaged building,

which is in compliance at the time of loss?

Learning Check

• Do all buildings insured by the NFIP qualify for ICC?



Exceptions:

Buildings insured under the Group Flood Insurance Policy.

Units insured under a condo unit owner policy.

Buildings in Emergency Program

Learning Check



Maximum Coverage Available Under ICC:

• $30,000

• No separate deductible

• Payment amount can not exceed the statutory maximum:

$250,000 - single family

$500,000 - non-residential

$250,000 - residential condo x no. of units.



Should mortgagee name(s) be included on the ICC partial and final payment checks?

Learning Check

No, ICC payments are subject to Coverage D

and do not require naming a mortgage.



• To the community when it is in conjunction with a FEMA project

such as the Hazard Mitigation Grant Program (HMGP).

Learning Check

There is no “assignment of Coverage D” except:



The Building/Local Official is the Authority in

determining Substantial Damage.

Learning Check

Who determines substantial damage?


2011 National Flood Insurance ProgramClaims Adjuster Presentation


The Standard Flood Insurance Policy

(SFIP) Property Not Covered


IV. Property Not Covered

• Personal property not inside a fully enclosed building

• Building and personal property located entirely in, on, or over water

• Recreational Vehicles

-Exception: travel trailers

• Self-propelled Vehicles or Machines including their parts and equipment…

• Open Structures

•Boathouses


Property Not Covered, continued

• Underground structures…

• Those portions of walks,

walkways, decks, driveways,

patios, and other surfaces,

…located outside the

perimeter, exterior walls of the

insured building…

• Containers, including related equipment…

• Buildings or units and their contents if more than 49percent of the ACV is belowground


Property Not Covered, continued

• Fences, retaining walls, sea walls, bulkheads, wharves, piers, and docks

• Aircraft or watercraft, their furnishings and equipment

• Swimming pools and their equipment

• Coastal Barrier Resources Act property

• Hot tubs and spas not bathroom fixtures

• Condominium property

owned in common


Exclusions


V. Exclusions

•Loss of Use

–Including loss of revenue and access

• Business Interruption

• Additional Living Expenses

• Cost of Compliance

–Except for ICC coverage

• Any other Economic Loss


Exclusions, continued

•Flood Already in Progress

–Policy Term

•Additional Coverage

•Earth Movement

–Earthquake

–Landslide

–Land Subsidence

–Sinkholes

–Destabilization or Movement of Land

–Gradual Erosion



•Pressure or weight of ice

•Freezing or thawing

•Rain, snow, sleet, hail, or water spray

•Water, moisture, mildew, or mold damage

–Confined to the dwelling

–Within your control

–Failure, stoppage, or breakage

–Failure to inspect and maintain


Mold



• Water or waterborne

material

–Sewer backup

–Sump pump

–Seepage

• Pressure or weight of water

• Power, heating, or

cooling failure

• Theft, fire, explosion, wind, or windstorm

• Intentional flooding

• Increased risk

• Federal Government

• Testing for or monitoringof pollutants


Hydrostatic Pressure


Learning Check

• During your investigation of a flood loss, should you

document other damage to the structure from a source

other than flood?

• Under what conditions would the NFIP pay for

testing/monitoring of a condition of mold?


VI. Deductibles

•Shown on Declaration Page

–Separate deductibles for building andcontents

•Buildings Under Construction

–Deductible doubled

•Does Not Apply to

–Loss Avoidance Measures

–Condominium Loss Assessment

–Increased Cost of Compliance


VI. Deductibles-

October 1, 2009 Changes

The standard deductibles for Pre and Post-FIRM properties in Non-Special Hazard Areas (B,C,X.A99 & D) will be increased from $500.00 to $1,000.00.

The standard deductible for Pre-FIRM properties in Special Flood Hazard Areas (A&V zones), will be increased from $1,000.00 to $2,000.00.

The standard deductible for Post-FIRM properties in Special Flood Hazard Areas (A&V zones), will be increased from $500.00 to $1,000.00.

Regular Program


VI. Deductibles-

October 1, 2009 Changes

The standard deductible will be increased from $1,000.00 to

$2,000.00 for all Pre and Post-FIRM properties.

Emergency Program:

Regular Program, Continued

The standard deductible for Pre-FIRM properties in Special

Flood Hazard Areas (A&V zones) and rated using elevation

certificate figures will be increased from $500.00 to $1,000.00.


VII. General Conditions

A. Pairs and Sets

– Settlement

– ACV of article

– Value of that portion as it relates to the set


General Conditions, continued

B. Concealment or Fraud

–Policy voidance, fines, civil

penalties, and imprisonment



•Not Eligible for Coverage

–Non-participating community

–Property not eligible for coverage



C. Other Insurance

• Prorated

–Primary up to other deductible

–Unless the SFIP is primary

–Other policy states it is excess coverage



– Condominium Units

–RCBAP is primary

–Dwelling Form is excess

C. Other Insurance



G. Reduction and Reformation of Coverage

– Must be corrected and correct premium

paid (Bulletin W-05021)

– Policy limits vs. premium paid

– Notice to WYO underwriting must be sent



I. Conditions Suspending or Restricting Insurance

–Increased hazard within the control or knowledge of

the insured



J. Requirements in Case of Loss(insured failed to comply)

–Non-Waiver Agreement

–Reservation of Rights



L. No Benefit to Bailee

- Bailee Goods

- No Coverage

M. Loss Payment

- Proof of Loss, 60 days from receipt by the company to pay claim

- Signed form, 90 days

-Received within 60 days from date of loss

(Including Supplements)



N. Abandonment

–Insured may not abandon damaged or undamaged

property to us



O. Salvage

- Insured’s option

- Reduced payment

- Insured buyback



P. Appraisal

–Insured and adjuster fail to agree on price

–Two appraisers

–Umpire



Q. Mortgage Clause

–Mortgagee’s interest is protected

R. Suit Against Us–Filed in US District Court within 12

months of denial letter

S. Subrogation–Insured’s right to recover is transferred

to the insurer if the loss is paid under the SFIP



T. Continuous Lake Flooding

• 90 continuous days

• Total loss

Closed Basin Lakes

• Total loss



U. Duplicate Policies Not Allowed

–Insured’s choice

–Combine policy coverage limits

Effective date is the date of the later of the two policies



V. Loss Settlement

–Replacement Cost

–Special Loss

–Actual Cash Value



ACV

• A 2-, 3-, or 4-family dwelling

• Unit not used exclusively for single family dwelling

• Detached garages

• Personal property

• Appliances, carpets, and carpet pads

• Outdoor awnings, antennas or aerials of any type, other equipment

• Abandoned property (debris at described location)

• Dwelling not primary residence


Amount of Insurance Required

•Not included in calculation:

–Footings, foundations, piers, other structures

or devices that are below the lowest floor and

that support all or part of the dwelling

–If no basement, supports listed above that are

inside the foundation walls

–Excavations and underground flues, pipes,

wiring, and drains

–ICC limit of liability


VIII. Liberalization Clause

•Broadened coverage

–No requirement for additional premium

–Automatically applies to insurance if change

implementation date is within 60 days before,

or during, the policy term

–Additional premium required

–Does not fall within this clause


IX. What Law Governs

• Federal Government

–Regulations issued by FEMA

–National Flood Insurance Act of 1968, as

amended

–Federal common law• Not subject to state insurance departments or

state and local courts


Pop Quiz


General Property Form

Read the policy!

Know the policy!

Coverage is subject to

limitations, restrictions,

and exclusions.


General Property Form, continued

• Insures non-residential and other residential

property and their contents

–Other residential

– Hotels, motels (occupancy six months or more)

– Tourist homes, rooming houses (more than five or more

lodgers)

– Residential (except hotels and motels) more than four

dwelling units

– Incidental business occupancy is permitted if less than

25% of total floor area




Non-Residential $500,000

Residential $100,000

Other Residential $250,000

Non-Residential $500,000

Building Coverage

Personal Property Coverage


II. Definitions

27. Stock

– Merchandise held in storage or for sale, raw materials,

and in-process finished goods including supplies used in

their packaging and shipping



General Property Form, continuedDefinitions, continued

•Stock includes

–Parts and equipment for self-propelled vehicles

–Furnishings and equipment for watercraft

–Spas and hot tubs, including their equipment

–Swimming pool equipment


General Property Form, continuedIII. Property Covered

•Coverage A - Building Property

–Awnings and canopies

–Blinds

–Carpet

–permanently installed over unfinished floor

–Central air conditioners

–Elevator equipment

–Fire sprinkler system

see page 3 of 18 of the General Property Form


General Property Form, continued Property Covered, continued

•Coverage B

–Building/Personal Property policy

– Personal property must be within a fully enclosed

insured building

•Personal Property only policy

–Located within the described building


General Property Form, continuedOther Coverages

Coverage C

•Pollution Damage

–Direct loss from flood

–$10,000 limit

–Not an additional limit of liability

–Cannot exceed property value

–Does not include testing or monitoring



• Personal property owned or in the care, custody, or

control of a unit owner

- Except as described under Coverage B

• A residential condominium building

IV. Property Not Covered


Condominiums

•Two types

–Residential Condominium Building Association Policy (RCBAP)

–General Property Form



Condominiums

•Tenant coverage

-10 percent extension

•Timeshares

Coverage

–General Property

–RCBAP



Residential Condominium

Building Association Policy

(RCBAP)

Read the policy!

Know the policy!

Coverage is subject to

limitations, restrictions, and

exclusions.


RCBAP, continued

• Insures a residential condominium building


The maximum building coverage for

a Residential Condominium Building

Association policy is $250,000 times

the number of units.


RCBAP, continued


RCBAP Adjusting Issues

•Adjuster should obtain a copy of:

–The condominium master documents that are

applicable

–Insurance documents

–Adjusters must provide a detailed industry acceptable

replacement cost evaluation

–List of unit owners

–List of additional insurance

–Underwriting issues must be reported to the company immediately

Adjuster must be RCBAP certified by the NFIP


RCBAP, continued

• Co-insurance Clause (80%)

Did

X Amount of Loss = Loss Payment

Should (apply deductible)

200,000

180,000X 150,000 = 135,000

(135,000-500=134,500)


Learning Check

• Under what conditions can a General Property Form

provide Replacement Cost Coverage?

• Under a General Property Form for non-residential

property , a tenant has building coverage. Should the

adjuster obtain the lease agreement for the file?

• A condominium association has $670,000.00 in

coverage. The building has a replacement cost of

$1,200,000.00. How much would be paid on

a$125,000.00 loss with a $10,000.00 deductible?


Learning Check Answer

$1,200,000X80% = 960,000.00

They should have had to meet 80% minimum required prior to

applying co-penalty.

670,000/960,000= 70% ITV

70%X 125,000.00 = 87,500.00 – deductible of 10,000.00 =

$77,500.00 claim payable


Flood Insurance Reform Act of 2004



“… provide simple and complete information to

policyholders at the time of purchase, renewal

and at the time of a flood loss.”



Exact Coverage being Purchased

Exact Exclusions from Coverages

How Items are Valued

Loss History of Property – Number and Dollars

Section 202. Supplemental Forms



Sent to the Insured

Received Policy, Supplemental Forms, and Personal Property

not covered by Building Property coverage, but is available

To be signed by the Insured at the time of purchase and renewal,

acknowledging…

– policyholder has been given a copy of the flood policy,

– any supplemental forms, and

– has been informed to purchase coverage for

contents/possessions.

Section 203. Acknowledgement Form



Section 204. Flood Insurance Claims Handbook

Easy to read, but complete, given to the Policyholder

at the time of purchase, renewal and at the time of loss

and to all insurance companies, agents and adjusters

Contain all Information about Claims

Proof of Loss Requirements

Settlements

Filing

Settling a Claim under NFIP



Formal Appeals Process

Adjusters, Agent, Adjuster’s Supervisor

WYO Companies

FEMA

Section 205. Appeals of Decision Relating to

Flood Insurance Coverage


ADJUSTER AUDIT ISSUES


AUDIT ISSUES

1. Incorrect Estimate/Worksheet Calculation

Estimates are line by line, room by room using unit costs

Depreciation to both building/contents line by line

Rooms should be described and identified

Typically overhead /profit is not applied-at least three trades

Include only building items on the building

estimate/worksheet

Qualifications for R/C clearly documented


AUDIT ISSUES

2. Insufficient Damage documentation

Invoices may be needed to adequately support a commercial

inventory – Salvor or CPA

Photographs should adequately document the claimed

damages – also undamaged elements/contents


AUDIT ISSUES

3. Payment Processing Errors

The adjuster should make all payment recommendations

clear

Other claim documents including the estimate/worksheet,

final report, and Proof of Loss should support the

recommendations


AUDIT ISSUES

4. Covered loss exceeded the value of certain items

Care is taken when Special Limits are claimed

Loss Avoidance Measures should be supported with invoices

Property removed to Safety claims should be supported with

invoices


AUDIT ISSUES

5 Case Loss Reserving

The reserving system mandates that reports be timely and

reflect true reserves

Stat reserves by WYO

The NFIP Preliminary Report should refine the case loss

reserve amount

FEMA Bulletin W-08095

December 22, 2008FEMA Bulletin W-10008

February 4, 2010

Updated FEMA Bulletin W-10100

December 17, 2010


Adjusting Issues

Technical Bulletins for WYO:

W-04011

Claims Payments on Enclosures at or above the BFE

W-04020

Flood Insurance Claims Guide

W-04091

Flood Insurance Claims Guidance (Elevated Building Slabs)

W-06019

Waiver of the Two-Year Limit for ICC

W-08008

Elevation Wind/Water Investigative Tips


Adjusting Issues, continued

W-08043

Claims Guidance Detached Garages

W-08052

NFIP Adjuster Fee Schedule

W-08070

Claims Guidance-Hurricane Gustav and Ike

W-08095 / W-10008 / W- 10100

NFIP Case Loss Reserving Procedures




W-09002

Formal Appeals Process – Issuance of Denial Letter

W-10017

Wind Vs Water – Adjusting Process

W-10065

Oil in Flood Water


www.nfipiservice.com



Contents Manipulation Personal Property Coverage

purchased

Room by room lump sum not

allowed in estimates

Invoice/receipt needed if

recommended

Removal/storage not

included



• Repair vs. Replacement

• Repetitive Losses

• Reserves

• Water Depth



Water Depth

7’

Water Depth

Equals (+) 2’


Remediation Issues

Prior to signing with

remediation contractor

Consult with the flood

adjuster or flood insurer



Heating, Ventilation,

Air Conditioning

(HVAC)



Elevators



•Foundation elements

–Slab under elevated building

•Direct physical loss by or from

flood

–All earth movement is excluded

•Litigation

–Use experts

-Engineers, FEMA, WYO company staff

–Review with insured their duties after a loss

–Use current documentation

-Adjuster Claims Manual

-Standard Flood Insurance

Policy

–Commercial claims

–Business inventory

generally means the hiring

of a CPA


Adjusting Issues, continuedDuties after a loss

•Duties of the Adjuster

–Investigate

–Evaluate

–Explain coverage to insured

–Report

–Litigation support

•Duties of the Policyholder

–Give prompt written notice of loss

–Mitigate the loss

–Cooperate with the adjuster

(see the policy forms for complete list)

•Duties of the Insurer−Process claim

−FIRA requirements

−Policy reformation

−Approve or deny

claim

−Options after loss


Adjusting Issues, continuedFoundations/Slabs


Adjusting Issues, continuedFoundations/Slabs

FEMA Bulletin W-04091

November 19, 2004



Look inside the house for:

1) Cracks in drywall on walls and ceiling

2) Doors that stick

3) Gaps between walls and ceilings

4) Nails that are coming out of the drywall

5) Windows that are not square or are sticking

6) Floors that are cracked or not level

7) Gaps between walls and floors

Foundation / Basement



Pre-existing Damages

Look outside the house for:

• Cracks in the masonry

• Gaps between bricks, doors and windows

• Bricks leaning away from garage doors

• Gaps between fireplace and house

• Sagging roof line

• Paint, caulking, vegetation in cracks


Adjusting Flood Losses

Basement


The definition of basement is: any area of the building having

it’s floor sub-grade (below ground level) on all sides.

Basement, continuedAdjusting Flood Losses


Do basement coverage restrictions apply in each of these

structures?

Basement, continued

Adjusting Flood Losses


REMEMBER !!!

Basements


There is Restricted

Coverage

in all

Basements


PORCH DEFINETION

1. porch, structure, construction

usage: a structure attached to

the exterior of a building often

forming a covered entrance


Elevated Buildings


Elevated Buildings, continued



• Base Flood Elevation (BFE)

• Top of Bottom Floor

• Top of Next Higher Floor

• Highest Adjacent Grade (HAG)

• Lowest Adjacent Grade(LAG)

The Elevation Certificate


Elevated Buildings, continued The Elevation Certificate


Elevated Buildings, continued The Elevation Certificate – Building Photographs



• Diagrams 1A,1B,2

The Elevation Certificate - Building Diagrams


Elevated Buildings, continued The Elevation Certificate - Building Diagrams

•Diagrams 3,4,5,6


Elevated Buildings, continued The Elevation Certificate - Building Diagrams

•Diagrams 7,8,9


Is it Wind or Water?

Wind/Water Investigative Tips

W-08008


Is it Wind or Water?, continued

•Tornado damage

•Building construction

–Wind resistance

–Take photos

–debris

–tiedowns

–connectors

–Was it elevated?

–Ask neighbors


Is it Wind or Water?, continued


REVIEW!!!!!!!


FLOOD CRITIQUE

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Where to get help!

WWW.FEMA.GOV

WWW.MSC.FEMA.GOV

FEMA Flood Map Store

http://www.fema.gov/

http://www.msc.fema.gov/


Resources

• Adjuster Claims Manual

• NFIP Flood Manual

• Community Status Book

www.fema.gov

• WYO Bulletins

• Preliminary Damage Assessment

• Adjuster Certification Application

www.nfipiservice.com

• Current Effective Maps/Historical Maps

www.msc.fema.gov


Resources

Adjuster Certifications

Mail:

NFIP Bureau & Statistical

Agent Certification

Coordinator

P.O. Box 310

Lanham, MD 207030310

Fax:

301 577-3421


All attendees will be receiving an email with a link to a survey and feedback form.

Please Take Time to complete and help us improve our training effort!

THANKS

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