Citizens urged to work with FEMA to hasten claims payments for flood victims

Ron Hurtibise, South Florida Sun-SentinelSouth Florida Sun Sentinel

Insurers are telling their customers that they are ready for soon-to-be Hurricane Helene’s march up the Gulf of Mexico and into Florida’s Big Bend region.

Private-market companies including state-owned Citizens Property Insurance Corp. and private-market insurers Heritage Property & Casualty, Vyrd, Tower Hill, Security First, and Slide have all added information to their websites advising customers how to prepare for the storm and how to file claims, if necessary, afterward.

If recent history is any guide, many hurricane victims will file claims their insurers won’t pay. They will determine their damages were caused by rising floodwaters from Helene’s storm surge, and property insurers don’t pay flood claims.

Meanwhile, homeowners might have to wait as many as 60 days to receive the claim denial that they must then submit before the Federal Emergency Management Agency’s National Flood Insurance Program begins its review.

At Citizens’ board of governors meeting on Wednesday, board member Charlie Lydecker urged the company to look for ways it can help customers get FEMA to more quickly pay their flood insurance claims. Citizens can help, Lydecker suggested, by establishing lines of communication between Citizens and FEMA and by more quickly issuing denials of coverage that FEMA requires.

Storm surge and flooding have been a major cause of damage to homes in the path of several recent Gulf coast hurricanes.

After Hurricane Debby hit the state’s Big Bend near Steinhatchee last month as a Category 1 with 80 mph winds, Citizens customers filed about 2,800 claims, Citizens chief insurance officer Jay Adams reported. So far, only about 450 claims resulted in payments, Adams said, because flood damage was more common than wind damage during Debby.

Of 13,918 residential property insurance claims filed statewide after Debbie, just 3,230 have been closed with payment, the office reported.

Just as forecasters are warning that Helene could cause a storm surge over the west coast’s shallow continental shelf, Debbie generated claims as far south as Sarasota County.

In August 2023, Hurricane Idalia also hit Florida’s Big Bend as a Category 3 and generated 17,005 residential property claims statewide. Property insurers have so far closed just 7,075 of them with payments.

While the state’s insurers estimated Idalia caused $309.5 million in total losses, FEMA said the National Flood Insurance Program paid $372 million to handle 5,200 Florida claims.

Two years ago, Hurricane Ian entered Florida at Fort Myers Beach and headed northeast up the state, spawning storm surge and widespread inland flooding. That storm was among the most expensive in history, resulting in $21.4 billion in estimated property insurance losses in the state.

FEMA paid $4.7 billion to 47,000 policyholders in Florida after Ian, according to its website. They were likely among 158,124 Ian claims that Florida property insurers closed without payment.

During Wednesday’s Citizens board of governors meeting, Lydecker, chairman and CEO of Foundation Risk Partners, a Daytona Beach-based insurance brokerage and consulting firm, said he was more concerned about Helene’s ability to cause flooding than wind. He said flood victims likely have difficulty after hurricanes navigating between the state’s Citizens and the federal government’s National Flood Insurance Program.

He asked whether Citizens is able to help transfer flood victims to FEMA or provide some sort of “triage.”

“Help me think through that a little bit as this storm comes bearing down on north Florida,” he said.

Adams replied, “Traditionally, FEMA does not engage with the (insurance) carriers. What happens is they often require the homeowner to provide a letter of denial from the carrier, and then they will pick up the flood piece and run with that.”

After Citizens denies their claim, it’s up to the homeowner to file a claim with FEMA, Adams said.

Lydecker then asked how quickly Citizens can provide a denial of claim “to get the ball rolling with FEMA quicker.”

Adams said that Citizens has 60 days to resolve coverage issues but added, “We do all we can to get those denials out there as quickly as possible.”

But he said determining which form of insurance is responsible still requires investigation. If a tree falls on a house and opens a hole in the roof during a hurricane that also flooded the house from the ground, adjusters must determine which damage was caused by water entering the home through the hole in the roof, and which was caused by rising floodwaters, Adams said. “We can’t do that over the telephone,” he said.

Lydecker said a more common scenario would be floodwater entering a home that otherwise would not be damaged, often resulting in a total loss.

When a flood that’s obviously not wind-related creates a total loss, Citizens should be able to provide a denial letter more quickly, he said, to help its homeowners “get online first with FEMA” ahead of those in other cities or states flooded by the same storm.

“We’re getting hit first. I want them in (FEMA) first. We want them to get money ASAP and not get stuck in 60-day waiting periods,” Lydecker said.

Carlos Beruff, chairman of Citizens’ board of governors, asked Adams to reach out to FEMA and ask how the companies can expedite their claims processes.

“We don’t know what FEMA does,” Beruff said. “We should get to know what they do a little bit — we don’t want to be experts — but we want to see if there’s a way we can coordinate the results quicker by us at least understanding their process a little bit.”

After the meeting, the South Florida Sun Sentinel asked a FEMA spokesperson if the agency would be open to directly working with property insurers in Florida to help speed up resolution of flood claims.

The spokesperson said, “We are currently responding to Hurricane Helene” and that a response would be provided as soon as possible.

Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071, on Twitter @ronhurtibise or by email at [email protected].