WASHINGTON–Flood insurance policyholders, after a two-year delay, have been given an official means of appealing decisions made by the National Flood Insurance Program under a rule published late last week.

The rule establishing a formal appeals process within the NFIP was developed by the Federal Emergency Management Agency, which oversees the NFIP, as required by the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004.

Sen. Jim Bunning, R-Ky., who during recent Senate Banking Committee hearings took the NFIP management to task for failing to enact the appeal provisions when they were supposed to said he was gratified.

“Two years ago my bill to improve the Federal Flood Insurance Program was signed into law by President Bush and I am pleased that FEMA has finally issued this rule implementing these reforms which will provide a fair and thorough appeals process for claims filed by those homeowners who have been hit hard by severe flooding.”

“This new appeals process gives NFIP insurance policyholders specific steps to appeal a claims decision and provides them with an official mechanism to have their case heard by the Federal Flood Insurance Administrator,” said David Maurstad, federal flood insurance administrator and director of FEMA's Mitigation Division.

Under the new appeals system, FEMA will notify a policyholder when it has received the request for an appeal and inform them of any additional information that might be required.

FEMA will review the appeal and conduct any further investigation that might be necessary before informing the policyholder and their insurance carrier of its decision.

An appeal may be filed after the carrier has made their final determination on a claim, and must be received by FEMA within 60 days of the determination. The policyholder can appeal any action of the insurer, a FEMA employee or contractor, insurance agent or insurance adjuster.

Additionally, the appeals process does not preclude the policyholder's right to file suit if they feel it is necessary. “FEMA has traditionally used an informal process to handle appeals regarding decisions related to coverage or claims under the NFIP,” Mr. Maurstad said.

“For our customers, this makes the process clearer and easier for them to appeal if they feel they've not been treated equitably. This written policy is consistent with our goal of making sure all claims handled by our insurance company partners are done as quickly and equitably as possible,” he added.

Dennis Kelly, a spokesman for the American Insurance Association, responded positively to the rule, which he noted contained some of the ideas proposed by the insurance industry.

“We are fine with the final rule and appreciate that our suggestion that the Write-Your-Own insurance companies be notified of the final outcome of the appeal process was incorporated into the final rule,” he said.

Special Reports /

Flood Policyholders Get Formal Appeals Process

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