FEMA's Homeowners Declination Requirement for Disaster Assistance

This week we plan to answer questions from clients about claims in working with FEMA, Homeowners Insurance, and Flood Insurance. Do you have questions you want answered? Call or email us www.allstate.com/nelsonrivera2

Q. I am a homeowners with insurance with you who has suffered only flood damage but I am being required to get a declination of coverage from my homeowners policy in order to collect FEMA disaster assistance. Why is this necessary?

A. The short answer is that FEMA says: “By law, we cannot provide money to individuals or households for losses that are covered by insurance.” But that does not mean the existence of insurance will preclude payment of FEMA disaster assistance. Despite being insured, there may be extraordinary delays in payment by the company, limits may have been exhausted, needs may have been unmet by the insurance policies or local housing may be unavailable. Given that the your property might not get inspected right away, FEMA will need assurance that no portion of the direct damage or loss of use is covered by the homeowners policy. For example, there may be wind damage to the roof and flood damage to the lower part of the home. Before assistance can be offered, the loss first must be denied under the terms of the insurance policies in place on the home.

Obviously, the claim processing and denial of flood damage losses by the insurance company is a gross misuse of adjuster resources, especially when those resources are so scarce in the midst of a catastrophic event. Unfortunately, until FEMA finds a better way to administer these claims for assistance, producers will need to cooperate as best they can.

The following link will provide information from FEMA on the application for disaster assistance:
http://www.fema.gov/disaster-help-available-if-i-have-insurance.