For those of us living in the Dallas, Fort Worth, Arlington, and Grand Prairie areas of Texas, National Flood Insurance programs are not usually an issue. But this type of insurance is available and sold in Dallas, Tarrant, Parker, and other counties throughout the State of Texas. Knowing a little bit about these programs is helpful and will put you more in the drivers seat when talking with your insurance agent when considering buying this type of insurance.
As with a lot of Federally controlled programs, the consumer is limited in his available remedies when he is mis-treated by the companies administering these programs. The Houston Chronicle ran a story recently giving an example of how these Federal Flood Insurance programs can be nightmares for the consumers involved. The article is titled “Ike Case HIts A New Obstacle”, and illustrates some of the problems homeowners experience when making a claim for coverage.
When there is a dispute, the insurance adjuster will try to get the homeowner to agree to going to arbitration as a way to settle the insurance dispute. Most people will jump at this option thinking to themselves that this will result in a quick settlement and save time and money, including attorneys fees. It turns out that the arbitration process is not necessarily quick nor cheap.
The Chronicle article highlights one family that had waited nearly six months for a resolution to their claim and spent more than $25,000 on fees for an appraiser to represent them in front of the arbitrator. Of course most people cannot afford the costs of an attorney, nor an appraiser. Nor is it practical for them to wait for months to get a resolution to their claim. These people making the flood loss claim have lives to live and need to get their housing situation worked out. Of course the adjusters know this and thus know they can get away with low-balling claimants.
The company involved in the Chronicle story is Harleysville Mutual. The appraisal umpire decided that the homeowner should be awarded $267,000, but it is still unclear whether or not this is going to be paid.
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