Hurricane Special: Louisiana Insurance Commissioner on state of flood insurance amidst pandemic

Insurance claims in the age of COVID-19

LAKE CHARLES, La. (KPLC) - Louisiana has experienced its fair share of hurricanes. We’ve all seen the images of communities rallying together to fill sandbags, in preps of high floodwaters, but this hurricane season poses an added challenge.

Combined with COVID-19, there are a lot more risks to consider this season as businesses and individuals prepare to weather the storm.

“Did I do something wrong, did I expose myself unnecessarily, what could I have done to diminish my risk?," said Louisiana Insurance Commissioner Jim Donelon. "With that prevalent in everyone’s mind, it’s a little harder to get focused on the looming threat of yet another hurricane season.”

Since Hurricanes Katrina and Rita, Commissioner Jim Donelon has seen the landscape of insurance change drastically for Louisiana policyholders. With cutbacks to many federal programs this year due to the coronavirus, 7News asked the commissioner if programs like the NFIP are still funded and if there’s enough money to cover homeowners in the event of an active season.

“That money is available having been appropriated by Congress last year on a multi-year basis. Your viewers should not have any concern about the program not being funded or available during this hurricane season.”

  • As of March 21, 2019, Hurricane Katrina in 2005 had the highest NFIP payouts, at $16.3 billion. In September 2017 Hurricane Harvey ranked second with $8.9 billion in NFIP payouts. Superstorm Sandy, which occurred in October 2012, ranked third, with $8.8 billion in NFIP payouts.
  • Louisiana residents can purchase flood insurance through the NFIP with coverage limits of up to $250,000 for the structure of their home and $100,000 for its contents. However, NFIP flood insurance also has rules about what is covered. Generally, the structure and anything built into your home is protected. So is any property that’s inside your home, though the rules are more complicated for anything in your basement or crawlspace.
  • The average price of NFIP flood insurance in Louisiana is $726 per year, though how much you’ll pay will vary significantly based on the location of your home. NFIP flood insurance is calculated using a formula set by FEMA, so any company selling an NFIP flood policy will give you the same price.

Items Covered By Flood Insurance

  • Standard home systems: This includes your home’s electrical wiring and plumbing, heating, and air conditioning, and gas.
  • Carpeting and installed features: Wall-to-wall carpeting, shelves, and built-in bookcases are all covered by flood insurance.
  • Foundation, walls and support structures: The structure of your house is included, as are staircases, so long as they are built into your house.
  • Detached garage: Covered up to 10% of your total policy dwelling coverage
  • Portable appliances and personal property: Appliances, like your oven, refrigerator, and washing machine, are generally covered. The same applies to your other belongings. Note that anything in this category is subject to a separate coverage limit.

What’s Not Covered by Flood Insurance in Louisiana?

  • Anything outside your home (swimming pool, landscaping, septic systems)
  • Cars and most other vehicles
  • Currency and precious metals
  • Living expenses or loss of use
  • Loss of business revenue
  • Any personal property in a basement

Causes of damage not covered:

  • Moisture, mildew or mold that could have been avoided
  • Damage caused by earth movement

According to the 2010 census, of the nearly 2 million housing units across Louisiana, only about 500,000 are covered for flood insurance.

On average, Louisiana residents shell out more than 700 dollars for flood insurance premiums. Donelon says the work to lower that figure has been challenging but stresses the importance of giving yourself enough time in advance to prepare for a storm, especially if you live in a flood zone.

“Everybody’s claim is going to be different and the loss experience is going to be different," said Statefarm Spokesman Chirs Pilcic.

While the insurance market is in a state of transition due to COVID-19, the flood insurance market is slowly becoming more competitive--the take-up rate for flood coverage is still far too low, according to Insurance Business America. Major weather events in the past few years have been a harsh reminder of this. When Hurricane Harvey made landfall on Texas and Louisiana in August 2017, approximately 80% of victims were uninsured for flood.

In the age of coronavirus, the way insurance adjusters conduct business may be a little different. Pilcic with Statefarm says due to the pandemic, they’ve already changed the way they process claims and even bills.

For the past few years, the fieldwork of assessing the damage to personal property is being done a bit differently. Adjusters may not ever come to your home, especially now in the midst of the coronavirus health crisis.

“It’s times like these that we are at our best...we like to be there in person and comfort people," Pilcic said. "Right now, that looks different. So we’re having those conversations by phone, Facetime...It’s those technological pieces that are helping us work those claims.”

Pilcic said in the event of a hurricane during the pandemic, they are taking claims online, over the phone, as well as through their app. He also mentions, depending on how bad the damage is--One team member can still come out to the home while adhering to social distancing and wearing protective gear.

Statefarm says one of the most important things you can do is start taking pictures of the property that has been damaged. There are additional resources that are now being used.

“The federal government has recently given insurers authority to use drones to assess damage," Pilcic said.

In addition, if you are thinking about getting flood insurance, remember that there is typically a 30-day waiting period before it goes into effect.

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