In an effort to speed up Louisiana recovery efforts and get settlement cash into the hands of Louisiana’s Flood Insurance Policyholders, FEMA is making available early partial settlement payments even before an adjuster’s inspection. FEMA has made changes to allow for the following:
• Homeowners can get up to $5,000 each for a policy covering their home and a policy covering their contents by signing an advance payment form. This form can be obtained from the company servicing your policy.
•Up to half of the estimated settlement amount can be paid out if the homeowners has a copy of a contractor’s estimate and gets the property inspected by the adjuster.
FEMA is providing National Flood Insurance Program (NFIP) Servicing Agent and Independent Adjusting Firms with Advance Payments Guidance for both opportunities. The FEMA guidance says that the insurer must notify the policyholder in writing of the following conditions:
1.The advance payment is not a payment for Additional Living Expenses (ALE). ALE is specifically excluded in the SFIP.
2.The advance payment is conditioned upon the insured signing an Advance Payment Request which contains a Non-Waiver Agreement (which means that no claims by the insured or insurer, or available defenses to the insured or insurer, are prejudiced or waived by the issuance and acceptance of the advance payment, and coverage under the policy is not admitted).
3.Acceptance of an advance payment will not affect the insured’s right to seek additional payments under the terms and conditions of their SFIP.
4.After the claim is settled, the final payment will be reduced by the amount of any advance(s) made to the policyholder.
5.Any mortgagee shown on the declarations sheet of the policy or any known mortgagee at the time of payment must be named on the building property check.
6.The insured will eventually have to sign a proof of loss meeting the requirements of the Standard Flood Insurance Policy for all amounts received, including the amount of the advanced payment.