National Flood Insurance Program FAQs

The National Flood Insurance Program (NFIP) is administered by the Federal Emergency Management Agency (FEMA) and is a Federal program enabling property owners in participating communities to purchase insurance as a protection against flood losses.  In exchange, participating communities agree to adopt and enforce ordinances that meet or exceed FEMA requirements to reduce the risk of flooding.

FEMA works very closely with nearly 87 private insurance companies who participate in the Write Your Own (WYO) Program to write and service Federal flood insurance in their own names.  The WYO companies operate within the context of the NFIP and are subject to its rules and regulations with oversight by FEMA.

Doesn’t standard homeowner’s insurance policy cover flood damages?

No. Only flood insurance financially covers your home and your personal property from floods. An NFIP Standard Flood Insurance Policy (SFIP) compensates homeowners, renters, and business owners for all covered losses, and unlike a Federal disaster loan, it does not have to be repaid.
top

What role do New Jersey insurance companies have in the NFIP?

New Jersey insurance companies write and service Federal flood insurance, on behalf of the NFIP. FEMA maintains oversight of the so called Write Your Owns (WYOs), ensuring they are adhering to all the NFIP rules and regulations. The WYOs are not subject to regulation by the State of New Jersey with respect to the NFIP. However, FEMA encourages the WYO companies to cooperate with the State insurance commissioners and regulators to provide assistance in responding to general flood insurance inquiries related to claims and claims handling activities.
top

What about other storm related damages, such as wind damage to my home or a tree falling on my car?

Those are covered by homeowner’s insurance (HO) policies which are sold by New Jersey insurance carriers such as New Jersey Manufacturers, AllState, State Farm and Chubb, which are regulated by the New Jersey Department of Banking and Insurance.
top

How many Sandy-related flood insurance claims has NFIP closed to date?

As of March 11, 2013, the NFIP had closed about 55,865 claims, or 75 percent of all flood claims filed in New Jersey.
top

How does that compare to the number of homeowner’s claims and other non-flood claims closed?

As of March 1, 2013, 93 percent of homeowner’s insurance claims had been closed; 88 percent of personal auto; 77 percent of commercial property and 78 percent of commercial auto, for an overall total of 90 percent of non-flood claims that have been closed.
top

What are some of the common reasons why claims remain open?

Cases may remain open for many reasons including lenders who are co-recipients of insurance claims, and are managing disbursements of funds; a top concern of consumers calling the Department of Banking and Insurance (DOBI) is unsatisfactory settlement offers. Business-related claims such as commercial property, commercial auto and business interruption are generally closed at a slower pace than personal claims for a variety of reasons including that the issues tend to be more complex, policy-specific and require a longer investigation.
top

What are some of the things that the Department of Banking and Insurance (DOBI) does to assist consumers when they call for help with their claims?

Staff at the Department’s Consumer Inquiry and Response Center (CIRC) assists consumers by answering any banking and insurance related questions regarding their case. Depending on the circumstances, a Department investigator will then contact the policyholder’s insurance company or bank to try and resolve any outstanding issues in order to settle the claim. If a consumer files a formal complaint, staff from the Office of Consumer Protection will investigate to determine if any state laws or statutes relating to banking and insurance have been violated. Violations are referred to the Department’s Enforcement Unit for possible administrative action. If the case in question involves a company not licensed by the Department or a program not regulated by the state such as the NFIP, the Department will still contact the parties involved and act as advocates for New Jersey consumers.

Department staff, accompanied by representatives of the NFIP and the Governor’s Office, has hosted 15 “mobile offices” going to communities and answering consumers’ questions, assisting them with insurance claims and other insurance or banking issues. Additional mobile offices will be held to continue to helping communities with any other insurance or banking issues related to the storm.
top

What is the Department doing to resolve the remaining claims?

The Department is starting a mediation program designed to settle open claims. The new program will allow property owners to submit homeowner’s automobile and commercial property claims to a mediator who will review the case and assist in settlement discussions. There will be no cost to the consumer. State regulated insurers are required to notify policy holders with open or unresolved cases that they can ask for a mediation conference and provide detailed instructions for filing that request. Mediation will prevent costly and time-consuming litigation for thousands of open Sandy cases. Faster case resolution will permit New Jerseyans to rebuild and recover from Sandy in a timelier manner.

The program will be operated by:
American Arbitration Association
E-mail: njsandymediation@adr.org;
Facsimile: 877-307-8457;
Toll Free Phone Number: 855-366-9774;
Online: www.adr.org; or
Traditional Mail to: 1101 Laurel Oak Road, Suite 100, Voorhees, NJ 08043
top


What should consumers do if they have a problem with a Sandy-related insurance claim?

Contact the Department at (609) 292-7272, Ext. 5, or online at www.dobi.nj.gov.
top

I have not heard from my adjuster and my insurance company has not contacted me. What should I do?

Contact the claims examiner at your WYO Company by calling the toll-free number for claims and providing your name, policy number, and the date of loss.
top

What is a Supplemental Claim?

Your flood insurance adjuster hired by your insurance carrier will submit a final report to your insurance carrier which will serve as your claim on your behalf. In the event the final report undervalues the covered cost to repair or replace your insured property, you may file a supplemental claim before this extended Proof of Loss filing period has expired.
top

How do I file a supplemental claim?

If you need to file a supplemental claim, FEMA recommends you submit your request in writing to your insurance carrier directly and to copy the adjusting firm (or the adjuster) whom they hired. You should include with your letter all documents which support your request, including but not limited to paid receipts or invoices for repairs completed, itemized (room by room) contractor’s estimates, photographs, and if related to the foundation of your building, a written report from a licensed engineer.

Please allow your insurance carrier the time to review your request and to provide instructions to the adjuster. If it is determined a supplemental claim is payable your adjuster will send you a Proof of Loss claim form. A Proof of Loss claim form is a requirement in order to receive a supplemental claim payment. If your adjuster does not provide you the Proof of Loss claim form for the value you feel you deserve, you may complete and submit your own Proof of Loss claim form directly to your insurance carrier. If you have any questions or concerns please contact your flood insurance carrier.
top

What is the deadline by which I have to file a Supplemental Claim?

Due to the impacts of flooding, FEMA has waived the Standard Flood Insurance Policy (SFIP) sixty-day “Proof of Loss” filing deadline, up to one full year from the date of your Sandy flood loss.
top

What is an Appeal?

If you received a written letter of denial of your claim or any part of it from your WYO company, the NFIP provides you with a process to appeal decisions regarding your flood insurance claim. This process will help you resolve claim issues, but it cannot give you added coverage or claim limits beyond those in your NFIP policy.

For your convenience, please read the NFIP Flood Insurance Claims Handbook, which describes the formal appeals process, as well as, other important claims information.
top


What is the deadline by which I have to appeal my claim?

If your building is damaged by a flood, you may be required to meet certain building requirements in your community to reduce future flood damage before you repair or rebuild.

The NFIP Standard Flood Insurance Policy SFIP) provides Increased Cost of Compliance (ICC) coverage of up to $30,000, which may be available to help cover the costs of meeting those requirements, subject to eligibility.

For more information on how to file an ICC claim, please read Increased Cost of Compliance: How You Can Benefit.
top


I filed an ICC claim with my insurance company, but have not been advanced any partial payments to begin my mitigation project. Are insurance companies required to advance partial payments?

There is no requirement that WYO Companies advance partial payments.  However, the Federal Insurance Administrator has conditionally waived the requirement that requires completion of ICC work before payment, authorizing partial advance payments up to 50% of the available ICC limit.  Please contact the WYO Company directly and refer to the WYO Bulletin w-13006.

For a copy of any WYO Bulletins, please visit www.nfipiservice.com.
top


What if my house has foundation damage, but the adjuster did not include it on my claim?

A Supplemental Claim may be filed. See the guidance above for filing a supplemental claim. Additionally, if you have an engineer’s report, it should be provided it to the adjuster.
top

How can my insurance company deny me in whole or part for my foundation due to “land subsidence” or “age”, when the damage was caused by flooding?

In accordance with the SFIP, Section V. Exclusions (C.):
C. We do not insure for loss to property caused directly by earth movement even if the earth movement is caused by flood. Some examples of earth movement that we do not cover are:

  1. Earthquake;
  2. Landslide;
  3. Land subsidence;
  4. Sinkholes;
  5. Destabilization or movement of land that results from accumulation of water in subsurface land area; or
  6. Gradual erosion.
    We do, however, pay for losses from mudflow and land subsidence as a result of erosion that are specifically covered under our definition of flood (see II.A.1.c. and II.A.2.).

top

My adjuster advised me that if I don’t like the insurance estimate, I can appeal to FEMA. What are my options after an appeal?

An insured may only appeal to FEMA as described in the NFIP Flood Insurance Claims Handbook and only after a denial and only for those items denied.  If you are not happy with the insurance estimate, you should follow the supplemental claim/proof of loss explained above.
top

What are some of the things that the department of Banking and Insurance does to assist consumers when they call for help with their claims?

Staff at the Department’s Consumer Inquiry and Response Center (CIRC) assists consumers by answering any banking and insurance related questions regarding their case. Depending on the circumstances, a Department investigator will then contact the policyholder’s insurance company or bank to try and resolve any outstanding issues in order to settle the claim. If a consumer files a formal complaint, staff from the Office of Consumer Protection will investigate to determine if any State laws or statutes relating to banking and insurance have been violated. Violations are referred to the Department’s Enforcement Unit for possible administrative action. If the case in question involves a company not licensed by the Department or a program not regulated by the state such as the NFIP, the Department will still contact the parties involved and act as advocates for New Jersey consumers.

Department staff, accompanied by representatives of the NFIP and the Governor’s Office, have hosted 15 “mobile offices” going to communities and answering consumers questions, assisting them with insurance claims and other insurance or banking issues. Additional mobile offices will be held to continue to helping communities with any other insurance or banking issues related to the storm.
top

What should consumers do if they have a problem with a Sandy-related insurance claim?

Contact the Department at (609) 292-7272, Ext. 5, or online at www.dobi.nj.gov.
top