Flood Insurance Market 2015 Update
In the annals of the National Flood Insurance Program, 2015 will go down as the year we all spent in the “Self Help” section of the federal bookstore.
With very little flood activity on the claims side, the only adjusters with any amount of significant flood-related work were the ones accepted to the Superstorm Sandy Task Force; currently going on in Washington D.C. Last week FEMA announced Task Force activities will continue into the Spring of 2016 and possibly until June.
For those adjusters unaware of the Sandy Task Force, over 150 adjusters were called to duty in the late Spring of this year to review claims arising from Superstorm Sandy. FEMA sent a letter to the 140,000 flood policyholder-victims of the storm offering to reopen their Sandy flood claims and take another look at what they were paid as well as what it cost them to return to pre-storm condition.
I visited the adjusters from our firm who have been working on the task force for over 23 weeks and although they could not show with me the actual files they have been assigned, they did share with me that some of them contain thousands of pages of information and documentation which must be reviewed, organized and then summarized into recommendations for additional payments or other FEMA action.
Sandy was one of the largest single events the NFIP has ever experienced. It occurred in an area where flooding, although not uncommon, has not seen an event of this kind since the inception of the flood program. Many policyholders were caught unaware of the coverages, exclusions and limitations of their flood policies and when told, many were not satisfied with their adjustments. These insureds communicated their frustrations with their local federal representatives. It was this political backlash which gave FEMA the incentive to create the Sandy Task Force and to take a closer look at any and all claims of those policyholders who wanted FEMA to take a second look.
Initial findings of the reviews show that the vast majority of the claims handled by flood adjusters were adjusted properly and within all FEMA and NFIP guidelines. Some additional payments have been made. The reviews will continue and this writer expects this task force concept to be a one-time affair; not to be repeated again or reserved just for the largest of FEMA/NFIP flooding events.
In addition to the Sandy Task Force work, flood adjusters also participated in two small flooding events in Texas and in South Carolina. During these events, FEMA personnel as well as advisors from an outside management consulting firm, accompanied seasoned flood adjusters to actual flood claims. These observers were able to see the flood claim adjustment process “up close and personal”. They witnessed how adjusters related to flood victims as well as the work flow of the flood claim documentation process. These inspections were performed in an effort to improve the productivity of the adjusters in the field to better serve the needs of the policyholder. The results of these inspections and follow-up roundtable meetings of the adjusters, adjusting company owners, and others involved in the claims process will not be known for some time.
As one of the NFIP’s certified flood trainers, I have had several conversations with leading FEMA and NFIP officials over the past several months. The leading concern of these individuals is the fair treatment of the policyholder and the protection of the integrity of the National Flood Insurance Program. I couldn’t agree more and I applaud the efforts of these individuals who have the self-commitment, willingness, and the power to make actual positive changes to the flood program.
I have been a flood adjuster for the NFIP-direct and leading WYO companies for an amazing 36 years. It continues to be a wonderful and ever-changing ride. The NFIP of 2015 is not the NFIP of 1979, when I started handling my first claims. I commend the NFIP and find it refreshing to see the program I care deeply about, both professionally and personally, take a serious look at itself during this year of self-reflection.
As with any self-help effort, whether it is by an individual or a federal/private enterprise or institution like the NFIP, it will be “progress rather than perfection” and a certain level of pain will be experienced before any real improvement(s) become the new reality, however, the iceberg has definitely not melted.
John Postava
President
FloodPCA.org