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Some Homeowners Face Insurance Claim Issues

State officials say homeowners should be "smart" when processing post-Sandy claims with insurance providers and do not have to accept first offers.

When the floodwaters from Hurricane Sandy receded from Raine Thomason’s Lindenhurst home, the resulting damages totaled upwards of $100,000.

Thomason, who has been in her split-level ranch-style home off South Wellwood Avenue for 19 years, said she pays an annual insurance premium of $5,000 to cover up to $250,000 in structural damages and $25,000 in contents.

But much to her surprise, an insurance adjuster told Thomason her homeowners insurance from Nationwide would cover only $14,000 in damages and not cover any items located on the first floor of her home that were damaged.

According to Thomason, the issue she is now facing is whether her first floor, which is 5.6 feet above the ground on an elevated slab with no basement, is an enclosure as her insurance adjuster is claiming. With the Base Flood Elevation on her property being 7 feet, her home is 1.4 feet below the floodplain and had 4 feet of flood waters during Sandy’s surge.

In addition, Thomason also said the insurance adjuster told her that since her home is a post-Flood Insurance Rate Map structure built in 1986 her contents coverage for that first floor would be voided. 

However, in 1977, the Flood Insurance Rate Map for Lindenhurst was created that outlined the area's floodplains. Homes built after that year are considered post-FIRM.

According to FEMA, if a building is constructed incorrectly, the owner may be faced with very high premiums or insufficient coverage. However, if a building is built properly, the owner will pay less than what it costs to insure a pre-FIRM building under the “subsidized” rates.

Thomason said adjusters working for the Florida-based Colonial Claims, hired by Nationwide to help deal with the heavy claim load on Long Island following Sandy, visited her house and said that because her first floor is below the Base Flood Elevation (BFE) it is considered an “enclosure,” and she would not be fully covered.

However, Thomason said that her home was built in 1987 and is up to all the post-FIRM construction standards. Her home has no basement and is built on an 18-inch elevated slab—all details which ensure their structure and contents will be fully covered after a flood, she said.

“He was getting everything backwards,” she said of the claims adjuster. “He was saying it was a negative thing my house was built post-FIRM construction and said that I would be uninsurable.”

Thomason feels the insurance adjuster gave her “misinformation” and tried to convince her that her home's first floor was “considered a basement” and that the insurance company would only pay for “replacing the walls with sheetrock.”

Her flood insurance policy, however, says the home is a two-story raised house with no enclosures and is entitled to full contents coverage on both floors, she said.

When Patch contacted Colonial Claims, a person who identified himself only as a manager named Josh, declined to comment on Thomason’s claims.

A Nationwide representative also declined to comment.

With many homeowners across Long Island now working with insurance companies to process claims following Hurricane Sandy, state officials said there are steps local residents may take to avoid either misinterpretation of current laws or possible scam artists.

“If people are having trouble with their claim, they can call our hotline, file a complaint on our website or send a written complaint,” said David Neustadt, director of Public Affairs for the New York State Department of Financial Services.

He said that insurance holders should visit www.dos.ny.gov or call 1-800-697-1220. The Department of Financial Services’ website provides a list of red flags to help you avoid scam artists who are either contractors or people posing to one.

He also explained that insurance holders do not have to accept the first offer given by their insurance provider. Holders can negotiate the offer by hiring a contractor to do an estimate on the damage and hire a public adjuster who will argue on the holder’s behalf.

If insurance holders believe their adjuster is engaging in criminal activity they should report it to the appropriate criminal justice authorities, he said.

“Any adjuster asking to be paid, or implying to be paid, is inappropriate,” Neustady said. “People need to be aware of anyone asking to be paid up front to provide help or extra help of any sort.”

Although Neustadt said he could not speak on specifics of Thomason’s case, other claims on Post-FIRM construction or alleged scams, he said local residents need to be smart.

“I am not aware that we have received a lot of complaints, but from past experiences it is certainly a problem,” Neustadt said.

“Unfortunately there are people who see those less fortunate as an opportunity to make money.”

The story for Thomason still has no conclusion. With the final claim on her home not yet filed, she is currently fighting with the adjuster to prove her first floor is not considered “an enclosure” and that she deserves contents coverage for her first floor.

“The adjusters think they are dealing with backwoods citizens who don’t know how to read their insurance declaration page, but they are not,” Thomason said. “They are messing with the wrong woman.”

Alan Seliger January 08, 2013 at 02:50 AM
tell washington politicians your house and land are now a foreign country.Than ask for Foreign Aid..Seems no problem giving our tax dollars to foreign countrys but let the u.s. tax payer be damed.We the people must start a protest and demand an end to our tax money being used for foreign aid and not cut any u.s. programs.Help our people first.Why are we tolerating this and letting others strive on our tax dollars.
Eddie January 10, 2013 at 01:34 AM
Do not give in to your insurance adjusters. I have combed through my flood claim (34 pages) and found many errors. Also ensure they are using NY rates. They will not inform you of any issues or alert you to something they are not including. They will hope you sign the first thing they send you out of desperation. 73 days later and still no money. This is their idea of cutting the red tape?
Nick Dorotik January 12, 2013 at 05:35 PM
When dealing with insurance, it is imperative to document everything. You should be able to tell your insurance company specifically who you spoke with previously, what you spoke about, and all the details of each conversation. If you are fighting code requirements or specifics of your particular policy, you must be very detail oriented and able to review prior conversations with field adjusters, desk adjusters, and any building department personnel. Create a spreadsheet if you have to. It will not be time wasted. Nick Dorotik www.asap-claims.com
Nick Dorotik January 12, 2013 at 05:35 PM
When dealing with insurance, it is imperative to document everything. You should be able to tell your insurance company specifically who you spoke with previously, what you spoke about, and all the details of each conversation. If you are fighting code requirements or specifics of your particular policy, you must be very detail oriented and able to review prior conversations with field adjusters, desk adjusters, and any building department personnel. Create a spreadsheet if you have to. It will not be time wasted. Nick Dorotik www.asap-claims.com

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