Flood Insurance Coverage

Whether you live in Weatherford, Mineral Wells, Aledo, Willow Park, Hudson Oaks, Peaster, Millsap, Brock, Springtown, Azle, Cool, or anywhere else in Parker County, there are odds that you may be subject to suffering a loss from flood damage. A natural question would be, “How does flood insurance work?”
Because most property insurance policies covering property at fixed locations exclude flooding, flood insurance must be purchased separately. In 1969, Congress created the National Flood Insurance Program to administer the sale of flood insurance. National flood insurance is available directly from the Federal Insurance Administration or through hundreds of private insurers who participate in federal flood insurance programs. The Federal Emergency Management Agency (FEMA) reinsures private companies against flood losses.
Flood insurance premiums are calculated based upon geographic maps setting forth the boundaries for various flood zones.
Contract claims must be filed in federal court, and are subject to the strict requirements of the policy and federal law. Insureds still have the right in the Fifth Circuit to bring suit on extracontractual claims under state law against a flood insurer. This per a 1993 case, Spence v. Omaha Indemnity Insurance Co., but it should be noted that there is disagreement in this area as to whether the National Flood Insurance Act of 1968, preempts state law in this area.
The standard flood policy is designed to insure against loss caused by an overflow of inland or tidal waters, unusual and rapid runoff of surface waters, and mud slides caused by flooding. All losses caused by perils other than flood are excluded. For example, the Standard Flood Policy excludes coverage for consequential damages resulting from the interruption of business activities following a flood. Also, case law tells us that water damage caused by heavy rains, does not constitute “flood damage.” This is from a 1950, Fort Worth Court of Appeals case styled, “Sun Underwriters Insurance Company v. Bunkley.”
An insured may not recover under a standard flood insurance policy unless the insured sends a proof of loss form to FEMA within sixty days of the loss. Failure to sign and swear to the completed proof of loss form enables the insurer to reject the claim.
The standard flood insurance policy contains a contractual one year limitations period. Extracontractual causes of action against flood insurers are subject to standard limitations periods under Texas law.
Flood claims need to be paid attention to immediately. Consulting with an experienced Insurance Law Attorney, early in the process is the best way to ensure you are going to maximize the coverage due because of the loss.