1. FEMA has again extended the deadline to file a proof of loss
FEMA waived the proof of loss requirement to expedite the claims process for payment of Storm Sandy claims. This applies to Standard Flood Insurance Policies and losses related to Storm Sandy only. Insurance adjusters were permitted to issue payment based on the “evaluation of damages contained in the adjusters report” instead of a proof of loss signed by the insured or an insured-signed adjusters report.
FEMA has stated that if a policyholder wishes to submit a supplemental claim or disputes the amount paid, it may request additional payment by submitting a signed and sworn poof of loss statement as required by the terms of the insurance policy. Initially this paperwork had to be submitted by October 28, 2013. There was concern that additional damage may be discovered during the rebuilding process or there was not sufficient time to gather and submit all of the supporting documentation.
2. It may be time to revise the Association’s governing documents
This is a good opportunity for the Association to review its governing documents. Many Associations were surprised to learn that their documents did not contain a provision for destruction of the property and the procedure for deciding whether to rebuild. If rebuilding involves the common areas, the Association may want to provide that it will retain one contractor to do all of the work.
The sections regarding distribution of insurance proceeds should be reviewed to make sure they meet the needs and desires of the community. The Association should review and understand whether the Association’s policy includes coverage for the individual units. Will the restoration after a loss be full replacement, i.e., which would include upgrades that existed prior to the loss or will the unit be restored to builders grade only? The board may want to add a provision regarding payment of the insurance deductible in various situations.
3. Keep good records
Storm Sandy reminded us that good records lead to good claims. The insurance company requires documentation or proof to establish the damage or loss being claimed by the Association. Keep records with the date of purchase or installation, receipts or contracts for the work and photographs of the items. If these records are detailed and easily accessed a claim for payment for the insurance company will be proceeded faster and with a better result. The Association’s inventory should be updated annually as well.
Storm Sandy also reminded us that it is a good idea to keep a back up of all important records off site in the event that original records or computers are destroyed.