Florida family blames loophole in National Flood Insurance policy for coverage denial

TAMPA, Fla. (WFLA) — Could your National Flood Insurance Policy be worthless when you actually need it?

A family in Pinellas County thought they were protected with a $8,600 flood policy through the program, which is administered through FEMA, but after their home was flooded by Tropical Storm Debby, their claim was denied.

The family said FEMA cited prior loss on the property that the previous homeowner collected on but did not repair.

Homeowner Danielle Jensen said she feels she was sold a worthless policy.

"He told me that he had received the prior loss report," Jensen said of what her insurance adjuster told her. "He looked at it, and it was the worst case scenario and that from the prior loss report, from the pictures, it was clear that the house was in the exact same state when he viewed it."

Now, her family is on their own, forking over tens of thousands of dollars to repair their home, and now they won't get reimbursed.

"Even down to the appliances that have the same serial number from the prior loss claim," she said.

What's happening to Jensen's family could happen to anyone buying a national flood policy.
There was no public record to check to see if there was prior damage that wasn't repaired.

Still, the family was sold the expensive policy.

"It's worthless, unless we flood again after we've made all these repairs at which point we could use it because it's all new materials," she said, noting she would not have bought the property had she known about the unrepaired damage or FEMA's policy.

Jensen said FEMA told her they don't require policy holders prove they made the repairs.
That leaves her questioning why she was sold this policy in the first place.

Consumer Investigator Shannon Behnken reached out to FEMA and was sent these points:

• Flood Insurance policies through the National Flood Insurance Program (NFIP) do not cover items previously damaged if the same damage reoccurred and the original repairs were never completed. Policyholders are not required to report proof of repairs to the FEMA. However, if they have a lender included on their policy, the lender may require proof of repairs to protect their investment and ensure repairs are completed.
• Policyholders can request a copy of the claim history for a property they insure with through NFIP. Perspective policyholders cannot request the claim history from FEMA, due to privacy requirements, for a structure they do not own. They can ask the current owner for the property’s claim history if they are willing to share that information.
• Currently, flood insurance is like other lines of insurance, such as auto and homeowner insurance, where a customer may receive a claim payment but may choose not to complete those repairs. As many states change their disclosure laws to require property owners to disclose prior and existing damage to structures, it will allow new owners to obtain the claim history for a structure and make informed decisions regarding their properties.