Flood Insurance Rates Rising For Homeowners; Private Insurers May Enter The Marketplace
Potential changes in flood insurance law could affect local homeowners in the near future. Most of the flood insurance policies in Mississippi are federally subsidized by the National Flood Insurance Program (NFIP). The NFIP is in debt by at least 23 billion dollars (as of December 2014) because of payouts on flood insurance policies.
Trouble for the NFIP began close to a decade ago. The NFIP was hit very hard financially after the 2006 hurricane season led to massive payouts on policies. This led to the Biggert-Waters Insurance Reform Act of 2012, which extended a program designed to keep the NFIP in operation. The five-year extension of the program also provided that homeowners would begin to pay more of the actual cost of their own flood insurance, which is calculated based on risk. Multiple-home owners (those who own rental homes and vacation homes) were required to pay nearly the entire true cost of flood insurance on properties that are not considered primary residences. Some of the insurance rate increases were delayed by four years by the Homeowner Flood Insurance Affordability Act of 2014.
Local insurance industry experts indicate that Congress is contemplating legislation that would make it simpler for private insurers to enter the flood insurance marketplace. According to the Mississippi Department of Insurance, the public is expressing an increasing interest in private flood insurance. Currently, most private insurance policies are either commercial policies or secondary policies (which provide additional coverage beyond the benefits provided by the NFIP policies).
What Does That Mean For You As A Homeowner?
As private insurers enter the flood insurance marketplace, the potential exists for unfair claims practices and denials of benefits. If you are a homeowner and feel that your insurer is handling your claim in bad faith, you can take a few helpful steps to establish a bad faith claim:
- Document the conduct that you feel shows the insurer acting in bad faith. Retain any documents or communications exchanged between you and the insurance company.
- Be persistent in pursuing your claim and aggressive in knowing and fighting for your rights.
- Respond to any reasonable request for information from the insurance company. This can help establish a pattern of cooperation on your part (as opposed to a pattern of delay on the part of the insurance company). You may also have a duty to cooperate, and it is important to show that you fulfilled this duty.
- Provide immediate notice of the claim. Late notice may cause you to forfeit coverage or benefits under the policy.
- Be cognizant that delays may happen even when the claim is handled in good faith. The insurer may require a lot of information from you, and some delay in the claims-handling process may be inevitable.
- Speak with an insurance professional. Your claim may be very technical in nature and require substantive analysis from an industry expert.
If you are a homeowner who is concerned that your insurance company may have handled or may be handling your claim in bad faith, contact an experienced insurance attorney today. The attorneys at the Law Offices of Judy Guice in Biloxi are available to speak with you regarding your insurance policy and any questions or concerns you may have. Call today for a free consultation at (228) 374-9787.