The FloodFlash sensor

Premium payment and waiting period

Making a claim

If someone else is to blame for your claim

If you need to cancel

What isn't covered under this policy

Service of suit clause

Law and jurisdiction

Making a complaint

For ease of use our analysis will be broken into multiple sections; each section will link to the other sections. This article will discuss the next three sections of the policy – Making a claim, If someone else is to blame for your claim, and If you need to cancel. There are certain sections set aside in a blue box in the text providing additional information. We will indicate those sections in blue text and discuss as needed.

5. Making a claim 5.1. When the sensor is triggered, we will email you within 24 hours. You will also receive an event notice for you to complete which you must send back to us within 28 days to confirm that a flood has taken place and setting out your estimated actual loss sustained. If you don't confirm the flood we may not make any payout under the policy.

5.2. If a flood event occurs that you think should have triggered the sensor but you have not heard from us, notify us within 28 days of the incident either by emailing [email protected] or calling +1 888-207-1026. We will then follow the process outlined at clauses 5.10 and 5.11.

5.3. Based on the event notice you send us, we will issue an initial payment which will be the lesser of:

(a) the estimated actual loss sustained and

(b) the payout amount. In the event of a second claim, this will be the payout less the initial payment from the first claim.

In the rare event that the sensor does not record or communicate data during a flood we use other sources to validate your claim as a failsafe. Just contact us within 28 days if you don't hear from us.

5.4. After we have paid you the initial payment as per clause 5.3, we will send you a proof of loss which you must complete with your actual loss sustained and return to us no later than six months after the measured flood event.

5.5. In addition to the proof of loss and in order to determine and substantiate your actual loss sustained, we may ask you to provide to us evidence of the value of the losses, damages, liability and expenses incurred in the form of

(a) invoices,

(b) statements,

(c) agreements and contracts or,

(d) any relevant records and documents considered necessary by us.

5.6. Based on the proof of loss, we shall determine your actual loss sustained.

5.7. If you do not provide a proof of loss and, if requested, any supporting documents to us within the above mentioned time frame, or a timeframe as indicated by us, we will determine that there is no actual loss sustained and we will pursue recovery of any initial payout made.

5.8. If an initial payout, as per clause 5.3, has been paid to you and this amount is less than your actual loss sustained, then we will pay you the difference up to the payout amount calculated for such measured flood event or, is higher than your actual loss sustained, then you must refund the difference to us within 28 days.

Analysis

This section outlines what happens once the sensor has been triggered and what steps are needed by the insured to receive payment. Once the sensor has been triggered, the insured will receive an email and an event notice form from the company. The insured is to send the event notice form back within 28 days confirming that the insured has sustained a loss, and providing an estimated actual loss sustained. Without this information, the insurer may not make any payment for losses.

The event notice is straightforward and asks the insured for the estimated amount of the loss and to confirm that the insured still maintains an insurable interest in the property. An acknowledgment that the notice is irrevocable is required. The bank account information is needed so payment can be direct deposited into the insured's account. The insured is asked to acknowledge that he understands that the company will keep the payment information on file and that the insured has the right to change or delete the information at any time. The form then asks for the person's name, position, business, signature, and date.

If an event occurs and the insured thinks the sensor should have triggered but she hasn't heard from the company, the insured is directed to contact the company by email or phone call within 28 days from the date of the flood event. Likewise, if a sensor does not communicate with the company properly there are other methods they use to validate the claim. The insured should again contact the company within 28 days from the date of the flood event if the insured believes an event that he should be compensated for has occurred.

Once the event notice is received, the company will issue an initial payment that is the lesser of the estimated loss sustained and the payout amount. If the scheduled payout amount is $300,000 and the estimated loss sustained is $100,000, then $100,000 is what will be paid to the insured. If there is a second claim during the policy period, that claim will be the payout, less the amount paid for the first claim. For example, if the insured later submits a claim for $300,000, since there has already been a claim for $100,000 on the policy, the insured will only receive $200,000 for the second claim, since the limits have been reached.

Once payment has been made to the insured, a proof of loss form is sent that the insured is required to complete and return to the company no later than six months after the flood event. This form requires the insured to provide an itemized list of the damaged property and the value of the damage.

Three declarations are required – the first is that the insured will provide supporting documentation of the loss if requested by the insurer, that the losses are represented truly and correctly and that the loss was not caused by any deliberate, malicious, fraudulent, dishonest act or omission, and that the insured maintained an insurable interest in the property throughout the policy period. The proof of loss must then be signed by one or two senior officers of the insured's company. Again, the name of the business is needed along with the name, position, and signature of those signing the form.

The insurer may ask for documentation in the form of invoices, statements, agreements, contracts, or any relevant records or documents the insurer considers necessary. The company will determine the actual loss sustained based on the proof of loss.

If the insured fails to provide the required proof of loss and supporting documents within the required time frame, the insurer will determine that no loss occurred and will pursue recovery of the funds it has already paid out. It is important for an insured to maintain records that substantiate the loss and provide them to the insurer as needed.

At times, the initial payment may be more or less than the actual loss sustained. If the initial payout is less than the insured's actual loss, the difference will be paid to the insured. If the initial payout is more than the actual loss sustained, the insured will be required to return the excess funds to the insurer within 28 days.

5.9. If we have not received the premium but you are within the terms of the premium due date when the sensor is triggered, we will reduce the actual loss sustained by the premium and any sensor fee.

5.10. If the FloodFlash sensor has not been installed or is faulty and fails to identify a measured flood event you must notify us in accordance with clause 5.2. We will issue payments based on the procedures defined in 5.3, provided we are satisfied that a valid claim would have been payable under this policy on the balance of probabilities after considering the available evidence outlined in clause 5.12.

5.11. If the FloodFlash sensor is triggered due to malfunction or malicious act and we believe that on the balance of probabilities, after considering the available evidence outlined in clause 5.12 below that a measured flood event has not occurred, we will not pay you any payout.

5.12. In making such assessments, a range of evidence may be considered. Such evidence includes:

(a) data from official and other sources,

(b) satellite data,

(c) site visits,

(d) evidence concerning neighbouring properties,

(e) photographs you submit, and

(f) interviews with your staff.

5.13. Where a loss payee has been named in the policy schedule, we will pay the payout to the loss payee and we will not be liable to make any further payout to you or any other party with respect to the measured flood event. The instruction to revoke a loss payee must be notified to us with 14 days' prior written notice by the loss payee. Nothing in this agreement is intended to confer a directly enforceable benefit to any party other than you.

5.14. If you make a claim under this policy knowing it to be fraudulent or exaggerated in any way, or provide any false or misleading statement in support of any claim, we:

(a) will not pay you any payout,

(b) may recover from you any sum(s) already paid to you, and

(c) may treat the policy as having been terminated with effect from the time of the fraudulent act. If we exercise our rights under this clause we:

i. need not return any premium to you and

ii. may report the matter to relevant authorities.

Analysis

If the insured is within the terms of the premium due date but the premium has not yet been paid when the loss occurs, the amount of payment will be reduced by the amount of premium due and any sensor fee. For example, the insured's premium is $3,000 plus a sensor fee of $200; a loss occurs before the insured pays the bill. The estimated loss sustained as submitted on the event notice is $30,000. The premium due and sensor fee will be deducted from that amount, so the insured will receive $26,800. In this way, the premium is paid and the insured is compensated for his loss.

If the sensor has not been installed or is faulty and fails to identify a measured flood event, the insured is required to notify the company. Payment will be issued as normal as long as the insurer is satisfied that a valid claim would have been paid had the sensor been working.

Likewise, if the sensor is triggered due to a malfunction and the company believes that no claim would have occurred, no payment will be made. In either case, the insurer will use a range of evidence in order to determine whether or not a flood event occurred on the property by using data from official and other sources, satellite data, site visits, evidence at neighboring properties, photos from the insured and interviews with the insured's staff.

When a loss payee is listed on the policy, payment is made to the loss payee and the insurer is not liable for further payments to any party. Instructions to revoke a loss payee must be by written notice by the loss payee; it must be received 14 days in advance.

In the event the insured knowingly makes a false or exaggerated claim or provides false or misleading statements regarding a loss, the insurer will not make any payments, will recover any payments already made, and may treat the policy as having been terminated from the time of the fraudulent act. The insurer may not return any premium to the insured and may report the fraud to the proper authorities. Insurance fraud is a serious offense and is considered a felony in many states.

6. If someone else is to blame for your claim 6.1. Upon payment of any payout we can take over any claim that you may have against a third party. If necessary, we will issue and pursue proceedings in your name at our expense to recover a payout.

6.2. You will provide all information and assistance which we reasonably require in support of any such claim.

6.3. You will not admit, deny, negotiate or settle any such claim without our written consent.

7. If you need to cancel 7.1. You can cancel the policy during the waiting period and receive a refund of your premium and sensor fee. 7.2. Where:

(a) you no longer hold a legal or equitable interest in the insured premises,

(b) you cease to trade for any reason or enter into any form of insolvency process, administration or liquidation,

(c) the insured premises is damaged beyond repair, or

(d) there is an event outside of the parties' control which renders this policy redundant and you cancel the policy, we will return premium and FloodFlash sensor fee to you calculated pro-rata based on the number of days left from the cancellation date provided you can prove one of circumstances (a) to (d).

7.3. In all other circumstances you can cancel the policy but the premium and FloodFlash sensor fee is non-refundable.

Analysis

The next section is the basic subrogation clause, where the insurer has the right to pursue the party that caused the loss for reimbursement for the amount paid to the insured. The insured is required to cooperate with the insurer by providing information and assistance as requested. The insured is not to admit, deny, negotiate or settle any such claim without the company's written consent.

Cancellation provisions provide details as to when the premium will or will not be refunded to the insured, based on the reason for cancellation. If the insured cancels the policy during the waiting period, the premium and sensor fee will be refunded to the insured. Likewise, if the insured no longer has an interest in the premises, closes the business, if the property is damaged beyond repair, or an event outside either parties' control makes the policy redundant and the insured cancels the policy, the premium and sensor fee will be refunded on a pro-rata basis, based on the number of days from the date of cancellation to the end of the policy period. The insured will need to provide proof of one of the above reasons. If the insured cancels the policy for any other reason, then the premium and sensor fee are not refunded.