FEMA clarifies payout procedure


Jerome DeFelice of FEMA External Affairs got in touch with the Indy regarding our recent story on issues with flood insurance reimbursement, to clear up the relationship between FEMA and flood insurance payouts.

DeFelice notes that FEMA and the National Flood Insurance Program (NFIP) facilitate and subsidize flood insurance. They are not in charge of executing any policy.

"We make the insurance available, but it's sold through these [write-your-own-policy] companies," DeFelice says. Though the insurance companies are in charge of the actual insurance policies, the NFIP does pay for all claims. Here's how that works:

When a policyholder makes a claim, the insurance company decides how much of that claim is to be paid, according to FEMA External Affairs official Randy Welch. The insurer pays the initial claim, then reports how much it paid to the NFIP, which reimburses the insurer for the cost. 

FEMA can accept an appeal for any denied parts of a flood insurance claim. Any other actions, though, should be between the insured and the insurance provider or the insurance adjuster.

  • Matthew Schniper
Regarding Manitou Spa building owner Chuck Murphy, whose story was outlined in the aforementioned article, DeFelice says he could not comment on any particulars of his case. 

For more information on flood insurance, or to appeal a flood insurance claim, go to floodsmart.gov.

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