IV. INSURANCE Obtaining an Insurance Pay-Out Immediately after a disaster, property owners (or car owners) should file a claim
or claims with their insurance carriers. Insurance is the first line of defense against damage from a disaster. FEMA’s Individuals and Households Program will not provide assistance until the applicant has indicated either: (1) that she has no insurance whatsoever; (2) her insurance does not cover the type of damage her property sustained; or (3) her insurance does not adequately cover the extent of the damage. For more information on insurance law in Vermont, please refer to Chapter 23 of Title 8 and the regulations promulgated under their authority.
To file a claim, the insured should contact her agent immediately. If she is unsure
of the name or contact information for her agent and cannot find her policy documents, call the customer service line for her carrier. It is the agent’s/broker’s job to assist its client (i.e., the person you are assisting) in pursuing a claim with the insurance company. It is critical that you or the person you are assisting contact the agent/broker and report the loss even if the person you are assisting does not think she has insurance coverage for the type of damage incurred. If there is coverage, the coverage might be waived due to failure to notify the agent/broker promptly.
In addition to filing a claim, when speaking to her agent, the insured should
request a copy of all of her policy documents if they were lost or damaged in the disaster. Lastly, the insured should also request information on how to change or cancel her policy and ask for copies of any required forms at this time.
If you are advising someone (homeowner or small business owner) who has
suffered flood-related damages, the first thing you should know is that the typical homeowner’s policy or small business policy does not cover flood-related damage. If the property owner lived within a Special Hazard Flood Area (see the Permit section of this manual for more information) and had a federally insured mortgage, pursuant to 12 CFR § 172.3,3 she would have been required to acquire and maintain flood insurance. Otherwise, unless a mortgage-free homeowner knew she was in a floodplain or she was exceptionally cautious from having experienced flood damage in the past, most
3 12 CFR § 172.3. Requirement to purchase flood insurance where available. (a) In general. A Federal savings association shall not make, increase, extend, or renew any designated loan unless the building or mobile home and any personal property securing the loan is covered by flood insurance for the term of the loan. The amount of insurance must be at least equal to the lesser of the outstanding principal balance of the designated loan or the maximum limit of coverage available for the particular type of property under the Act. Flood insurance coverage under the Act is limited to the overall value of the property securing the designated loan minus the value of the land on which the property is located.
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