➢ Flood Claim Denied or Underpaid? Our Lawyers Can Help.
Texas homeowners and business owners whose flood damage insurance claim was denied, delayed, or underpaid may have legal options, but those options run on a different set of rules than any other property claim in the state.
Flood coverage is almost never part of a Texas homeowners policy. It is a separate policy, and most of them are written through a federal program. That single fact changes the deadlines, the court, the available remedies, and what the policy pays.
Our firm, Hissey Mulderig & Friend, is accepting flood damage insurance claims from policyholders throughout Texas.
If you or a loved one filed a flood damage claim in Texas and your insurance company denied it, undervalued it, or has failed to respond, you may qualify to take legal action. Contact the attorneys at Hissey Mulderig & Friend toll-free at 1-866-806-8117, or submit a free case evaluation form to speak to an attorney and find out whether you qualify.
➢ A Flood Claim Is Not a Texas Insurance Claim
Most flood policies in Texas are Standard Flood Insurance Policies issued under the National Flood Insurance Program. Many are sold and adjusted by familiar private insurers participating as Write Your Own carriers, which is why policyholders assume the claim works like any other.
It does not. The policy itself states that it and all disputes arising from the handling of a claim are governed exclusively by FEMA’s flood insurance regulations, the National Flood Insurance Act, and federal common law.
Federal courts, including the Fifth Circuit, which covers Texas, have read that provision broadly. The consequences for a policyholder are significant:
- The Texas Insurance Code does not apply. There is no unfair settlement practices claim and no prompt payment claim.
- There is no bad faith cause of action against the carrier, regardless of how the claim was handled.
- Punitive damages are unavailable.
- Attorney’s fees are not recoverable. The federal statute contains no fee-shifting provision.
- Suit must be filed in federal district court where the property is located. State courts have no jurisdiction.
What remains is a breach of contract claim for the money the policy owes. That is a narrower path than Texas policyholders are used to, and it makes the accuracy of the claim file far more important than the conduct of the adjuster.
The state-law remedies that do apply to a wind claim against a private Texas carrier are covered on our page about Texas wind damage insurance claims.
➢ The One-Year Clock
A policyholder has one year from the written denial of all or part of a claim to file suit. The clock starts on the date of the original denial.
Two facts about that deadline catch people. Filing an administrative appeal with FEMA does not extend it. Neither does invoking the policy’s appraisal provision. A policyholder can spend months in an appeal, receive an unfavorable answer, and discover the year has run.
A policyholder who files suit is also barred from pursuing the FEMA appeal. The two tracks cannot be run at the same time, and choosing between them is a decision with a deadline attached.
➢ What the Policy Pays
NFIP coverage is capped, and the caps have nothing to do with what a property is worth.
Residential building coverage tops out at $250,000, with contents available up to $100,000. Non-residential buildings can be insured to $500,000 with $500,000 in contents.
Contents are always valued at actual cash value. There is no replacement cost option for personal property. A ten-year-old sofa is paid at what a ten-year-old sofa is worth, not what replacing it costs.
➢ What the Policy Does Not Pay
The exclusions surprise people more than the limits do.
There is no coverage for additional living expenses. If a flood makes a home uninhabitable, the policy pays nothing toward a hotel, a rental, or meals. Texas homeowners policies typically include that coverage. NFIP policies do not have it at all.
Property outside the building is excluded, including landscaping, decks, patios, fences, seawalls, and swimming pools. Currency, precious metals, and valuable papers are excluded. Earth movement is excluded even when flooding caused it. Vehicles are not covered by a flood policy at all, though comprehensive auto coverage generally pays for flood damage, as covered on our page about Texas vehicle damage insurance claims.
Basements and enclosed areas below an elevated floor receive limited coverage confined to a specific list of building components, such as foundation walls, electrical systems, and central air conditioning equipment. Finished basement improvements and most personal property stored below grade are not covered. A detached garage is covered, but only up to ten percent of the building limit, and that amount comes out of the building coverage rather than being added to it.
➢ Increased Cost of Compliance
One coverage gets overlooked more than any other. Increased Cost of Compliance provides up to $30,000 toward elevating, relocating, demolishing, or floodproofing a building to meet local floodplain rules.
It is triggered when the local government determines the building is substantially damaged, generally meaning flood damage equal to or greater than half its pre-flood market value. The same determination affects code upgrade coverage on the wind side of a storm loss, which is covered on our page about Texas hurricane damage insurance claims.
Policyholders who rebuild without ever asking about ICC leave that money unclaimed.
➢ Appeal, Appraisal, or Suit
A denied flood claim has three possible paths, and FEMA’s appeal process is the least understood of them.
An appeal goes to FEMA rather than to the carrier, and it is free. Appraisal is the policy’s own valuation mechanism and addresses the amount of loss rather than whether the loss is covered. Suit is the only route that produces an enforceable judgment.
Historically, well under one percent of NFIP claims end in litigation. That statistic reflects both the narrowness of the remedies and the number of policyholders who accept a denial without testing it.
➢ Private Flood Policies Are Different
A growing number of Texas properties carry flood coverage from private insurers rather than through the NFIP. The distinction matters enormously.
A private flood policy is a state-regulated insurance contract. Texas law governs it. The Texas Insurance Code applies, bad faith and prompt payment claims are available, attorney’s fees may be recoverable, and the case belongs in state court.
This is true even when the private policy copies the federal policy language word for word. What determines the governing law is the program the policy was issued under, not the wording on the page.
Anyone with a denied flood claim should establish which type of policy they hold before anything else, because that answer dictates the deadline, the forum, and the remedy.
➢ Who Is Eligible to File a Texas Flood Damage Insurance Claim?
Texas property owners may be eligible to take legal action if they meet the following case criteria:
- Owned a home or business property in Texas damaged by flooding, storm surge, or mudflow;
- Carried a flood insurance policy covering the property on the date of the loss;
- Received a written denial, a partial payment, or an underpayment from the flood insurer within the past year.
If you or a member of your family answered yes to all of the above criteria, you may qualify to pursue the amount your policy owes.
➢ Contact Our Law Firm to Start Your Claim Today
The lawyers at Hissey Mulderig & Friend have more than 100 years of combined legal experience representing clients across the state of Texas.
Our firm is accepting flood or other storm damage insurance claims involving homes and businesses, including claims under National Flood Insurance Program policies and private flood policies.
If you or a loved one had a Texas flood damage insurance claim denied or underpaid, contact the lawyers at Hissey Mulderig & Friend toll-free at 1-866-806-8117, or fill out the free case evaluation form located at the top of this page.
