The government's National Flood Insurance Program, seeking to speed resolution of tens of thousands of claims arising from Hurricane Katrina, will begin paying many of them in full based on aerial photographs, water-depth data and other readily available information.
If it is "readily apparent" that flood damage will exceed the amount of flood insurance the owner has bought, the NFIP will pay up to the policy limit without waiting for an adjuster to visit the site, the agency said.
This procedure is expected to apply when home have been washed off foundations, were affected for long periods by standing water, or when only pilings or a slab remain, the agency said.
Katrina was "an unprecedented event," acting Federal Flood Insurance Administrator David I. Maurstad said yesterday. "We are going to have more claims in New Orleans and that whole Gulf Coast area than we've experienced before. So we need to try to get those claims handled as quickly as we can."
The NFIP received 74,000 claims from the four hurricanes in Florida last year, Maurstad said, and has already received 150,000 claims from Katrina.
To speed up other cases, the NFIP is eliminating some paperwork, including proof-of-loss statements normally required of property owners. Instead -- if the owner agrees -- it will rely on a report by a claims adjuster.
And companies that work with the federal flood program are being urged to issue checks of $3,000 to policyholders whose coverage included possessions.
The NFIP has told adjusters to help policyholders draw up a list of their homes' contents and appliances damaged by flooding. Serial and model numbers are not needed, and a list of contents by major grouping may be submitted, rather than a comprehensive list.
Maurstad said the program has also been working with state-run wind-insurance pools to try to simplify the allocation of wind and flood damage. The issue is a sensitive one because homeowner policies and many business-insurance policies do not cover flooding. Some experts have cautioned that this issue could generate conflict between government and private insurers, leaving property owners in the middle.
Maurstad said he is working out agreements with the pools in Mississippi and Alabama under which a single adjuster goes to the property, does an assessment and the parties agree to abide by his finding. "That really eliminates the problem" in those cases, he said.
There are about 85,000 NFIP policies in force in Mississippi and Alabama combined and about 383,000 in Louisiana, said the Federal Emergency Management Agency, which administers the NFIP.