Hurricane Katrina: Legal Issues - Columbus School of Law

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caused by a covered loss such as wind, windstorm, fire, theft and vandalism. Coverage for loss caused by water damage/flooding is generally excluded. Most policies obligate insurers to pay the actual cash value of such contents but some obligate the insurer to pay the amount it would take to replace the goods. Coverage for valuable personal property such as jewelry, silver, art, etc. may be limited unless the insured purchased additional coverage for these particular items. The policy may contain a provision that gives the insurance company the right of "salvage" with respect to damaged property. So you should not discard any damaged property without first getting the insurance company's approval. Must a claim be resolved before repairs begin? Ideally, an agreement should be reached with the insurer concerning the cost of repairs before permanent repairs are made. Even if you have not reached a final settlement agreement with the insurer, it may agree to make an advance payment to cover your ongoing expenses. Do not sign any release until the entire claim is settled to your satisfaction. Make sure you hire a licensed and reputable contractor to make those repairs. Beware of scammers. There may be dishonest contractors attempting to take advantage of hurricane victims. Don't enter into a contract or advance a deposit without first getting written estimates and references concerning the contractor’s past work. If you have any questions concerning contractors, you can contact the Mississippi State Board of Contractors at 1-800-880-6161 or the Better Business Bureau. What should a homeowner do if an agreement cannot be reached? A homeowner who is not satisfied with the settlement offered by the insurer should not sign a release or cash a check indicating “payment in full.” Also, do not sign any document which states that you acknowledge that you have suffered a flood loss, as the insurer may be trying to get you to admit that your loss is not covered. If you and your adjuster cannot agree on a settlement amount, contact your agent or your insurance company's claims department manager. Make sure you have figures to back up your claim for more money and submit your argument in writing. You may want to have an attorney review your submission before you submit it so that you do not say anything that can be used against you later in a lawsuit with the insurer, should that become necessary. If no agreement is reached, the insurance policy may provide for a method of independently appraising the loss. A homeowner who is unable to reach an agreement with an insurer may file a complaint with the Mississippi Department of Insurance and/or consult an attorney to review the claim. If appropriate, the attorney may negotiate with the insurance company or file suit. (For more information on filing a complaint with the Mississippi Department of Insurance, see Appendix). Is recovery affected by a homeowner’s absence from the house? Some policies exclude coverage while property is vacant or unoccupied more than a certain number of days, often sixty. A homeowner who is unable to occupy a home and is concerned about additional loss due to later storms, theft or vandalism, should discuss this issue with the insurance agent or representative. What amount will an insurance company pay for a covered loss? Again, coverage depends on the terms of the policy. Under many policies, a homeowner is entitled to recover the full replacement cost of the damaged property -- the total amount it costs to replace a home with a home of “like kind and quality.” A homeowner who has Guaranteed Replacement Coverage may be entitled to recover the total replacement cost even if it exceeds the policy limits. Under other policies, an owner may only be able to recover the actual cash value -- the cost to repair or replace minus a deduction for depreciation. Some policies contain coinsurance provisions which limit ability to recover the full replacement cost if the home is not fully insured. Homeowners should consult with the agent or company representative to discuss the settlement provisions of the individual policy. How are insurance proceeds used when a destroyed home was subject to a mortage?
If the mortgagee (bank) is named in the insurance policy, most standard policies require that the settlement be used to pay off the loan to the bank, with the owner getting the remaining amount. Mississippi law requires a standard mortgage clause to be incorporated in all fire insurance policies. Miss Code. Ann. § 83-13-9. Mississippi law further provides that, pursuant to such a clause and upon satisfactory proof of loss, the insurer shall pay the mortgagee as its claim appears. Miss. Code Ann. § 83-13-7. An individual mortgage agreement may contain terms which govern the right to rebuild. Depending on the amount of debt, the value of property and the original interest rate, a lender may require use of the funds to pay the mortgage instead of allowing the homeowner to rebuild. In some states, an owner must be allowed to rebuild rather than paying a mortgage if the mortgagee’s security is not jeopardized. This question is not clearly answered in Mississippi. Basic advice: Read your insurance policy and loan agreement. File a claim with your insurance company. Contact your lending institution to see if you may use the insurance proceeds to rebuild. If the mortgagee will not agree to let you use the insurance proceeds to rebuild and you believe the mortgagee’s security will not be diminished by your rebuilding, you may consult with an attorney to further evaluate your rights. May insurance funds be used to rebuild a home in another location? If the home was not subject to a mortgage, most policies will permit an owner to rebuild in another location but coverage is generally limited to the cost that would have been incurred to rebuild on the original premises. Homeowners should discuss rebuilding plans with the insurance agent to learn how rebuilding on other premises might affect coverage. Must insurance funds be used to rebuild? A homeowner who chooses not to rebuild at all may only be able to recover the actual cash value of the home as opposed to the cost of rebuilding. The owner should discuss the ramifications of choosing not to rebuild with the agent or representative. Flood Insurance What steps should an owner take to file a flood insurance claim? An owner who lives in a flood plain and has a federally-backed mortgage was probably required to purchase flood insurance as a condition of the mortgage. Flood insurance is sold separately through the National Flood Insurance Program (NFIP), administered by the Federal Emergency Management Agency (FEMA). Generally, the owner should follow the same procedure as for homeowner’s insurance. Proof of Loss must be filed within 60 days after the loss occurs. If necessary, an extension in writing can be obtained directly from FEMA. See NFIP Flood Insurance Claims Handbook published by FEMA at http://www.fema.gov/pdf/nfip/f687_claimshdbk.pdf. For more information about flood insurance, visit www.floodsmart.gov. The handbook outlines the internal appeals process required before filing a lawsuit. Automobile Insurance Will comprehensive automobile policies cover damage or destruction to a car by Hurricane Katrina? This depends of the terms of the individual policy. If covered, the owner will generally be entitled to the fair market value of the car less the deductible. If the vehicle is damaged, the insurer will generally pay the cost to repir and,
Page 1 and 2: Hurricane Katrina: Legal Issues Fro
Page 3 and 4: 5.1 Homeowner's Insurance 5.1.1 Cov
Page 5 and 6: 7.1.2 Who Is Eligible To Receive Fo
Page 7 and 8: 10.1 Child support 10.1.1 Are FEMA
Page 9 and 10: 10.6.4.1 Right to remain silent 10.
Page 11 and 12: 14.1.5 If I have a client that has
Page 13 and 14: website are urged to seek individua
Page 15 and 16: landlord to be released from his or
Page 17 and 18: (1) the landlord has a written leas
Page 19 and 20: the loan and the fees associated wi
Page 21 and 22: General suggestions. Contact Your M
Page 23 and 24: Liability for damages Does a proper
Page 25: from its foundation. What if damage
Page 29 and 30: used. A company should be able to f
Page 31 and 32: esources of state and local governm
Page 33 and 34: directions to your damaged property
Page 35 and 36: Yes, FEMA is authorized to accept l
Page 37 and 38: eceipts to FEMA through the IHP pro
Page 39 and 40: from FEMA, you must repay the amoun
Page 41 and 42: 18889971117. Mississippi residents
Page 43 and 44: MEDICAID, CHIP, WIC What Is Medicai
Page 45 and 46: What Is WIC? WIC is The Supplementa
Page 47 and 48: How Do I Replace My Social Security
Page 49 and 50: should contact the state Department
Page 51 and 52: Self-employed individuals who lost
Page 53 and 54: 146.113(b)(2) (2004). What health i
Page 55 and 56: The FMLA provides an option for emp
Page 57 and 58: award. A decrease in child support
Page 59 and 60: How does the foster care system wor
Page 61 and 62: What are the criteria for appointin
Page 63 and 64: When, or under what circumstances,
Page 65 and 66: Investigation 1. Review any court f
Page 67 and 68: confidential (meaning it is not a p
Page 69 and 70: A child must be immediately informe
Page 71 and 72: e a runaway. “Probable cause” m
Page 73 and 74: Tell your child to show respect, bu
Page 75 and 76: Check out the charity's financial i
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If your car was submerged or standi
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hurricane that live outside of the
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Because of the difficulty in comfir
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International Educators http://www.
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The answer to this question is comp
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timely manner - that is, Plaquemine
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transportation within a short perio
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Hurricane Katrina: Legal Issues - Columbus School of Law

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