Flood insurance a turbulent topic for disaster victims

by: Darryl Swan, Linda Christophersen stands outside her Mist area home with her canine friend, Max. In December, the Nehalem River flooded, knocking support from under the home of Linda and her husband, Jack. Now the couple is having a hard time securing a fair insurance settlement.

Linda Christophersen can clearly recall the night the December floodwaters arrived at her doorstep.

'We thought we heard a freight train coming, and it was the water,' Christophersen said. 'The current was really strong.'

She and her husband, Jack, have lived in the modest one-story home on the outskirts of Mist, a small unincorporated town build on the shoulders of the logging industry, since the 1970s. The couple was asleep in bed when the sound of approaching disaster alerted them to its presence.

It wasn't the Christophersens' first flood. A similar scenario happened in 1996, when a quick thaw of frozen earth joined with lashing rain to force the Nehalem River to spill over its banks.

The difference, however, was in the water current. In 1996, there wasn't one, and the water instead took on the quality of a stilled lake, draining away soon after as quietly as it arrived.

This time, the water slammed into the home's foundation, washing away the cinderblock pilings that had fastened the home to the ground.

In the following fray, Linda said they didn't worry too much. After all, the couple had been paying on a $125,000 flood insurance policy since 1996. To her way of thinking, flood insurance should act like car insurance - if your property is damaged, just file a claim and get a payout to cover the costs.

Though the water never crested the surface of the couple's living quarters, it instead spread its damage through a crawlspace under the home, creating its own set of problems down the road. The house has since been caught in a slow sag that continues today. Fresh cracks have appeared in wall corners four months later, and timber supports cast faint midday shadows as they push up against the kitchen's tiled floor. Flood debris collided with plumbing and electrical systems just under the floor, causing extensive and lingering damage.

Now, 57-year-old Linda and others in her situation are becoming all too familiar with the sounds of a new disaster, one where some insurance companies are offering cash compensation far less than the real expense to fix the flood damage.

After the first adjustment, Christophersen was handed a check for $10,000.

'I said, 'I don't think so,'' Christophersen replied. The couple was assigned a new adjuster as the first one transitioned out of the disaster area, but early last week the second adjuster was pulled off the case, raising more questions.

Problems not isolated

Kathy Denckla, a volunteer at the flood disaster recovery center in Vernonia, said Christophersen's story is not an isolated case of people feeling let down by flood insurance.

'A lot of people have just accepted it and decided they couldn't do anything,' Denckla said.

Denckla said she has seen around 25 such cases. One piece to the low damage adjustments is that Vernonia and Mist are relatively remote locales, driving up contractor bids.

'We tell people that they need to keep fighting until they come in at no less than 10 percent of what the cost is,' Denckla said of the insurance estimates.

Don Dennison, a natural disaster insurance specialist from South Carolina who has been working the Vernonia flood for the Federal Emergency Management Agency, said he has, on occasion, seen off-the-mark insurance claims in Vernonia, where only about 150 flood victims actually had flood insurance.

'There are some circumstances where the adjuster has clearly got it wrong,' Dennison said. He said that many people had policies after the 1996 flood, but many of those polices were left to expire over time.

In most cases, Dennison said Farm or All State, to the homeowner. Private insurance carriers had in fact dropped flood insurance programs due to the many unknown variables in such disasters, forcing the federal agency to take over that role.

While insurance agents get a commission based on sales of flood insurance, the policies, which max out at $250,000, in essence are all the same and fall under the same FEMA-driven guidelines and rules for how claims are made, and paid.

Here's how it works: Following a flood, an insurance adjuster visits the residence, documenting the extent of damage to the home. The homeowner is also expected to provide a proof of loss, typically photographic evidence of home contents - flat-screen TVs, stereos, new sectional couch - that had been damaged in the flood.

The adjuster then compiles the information and plugs it into a software program that spits out an estimate. Several factors, such as weighing a hand-woven Turkish rug vs. a bath mat picked up at the local Wal-Mart, go into the estimate.

In Vernonia, the problems began when the adjustment checks fell far short of the actual cost to make repairs, even when coverage limits had not been reached.

Dennison, who has championed many of the flood victims' problems, said there is little incentive for an insurance adjuster to lowball a claim. In fact, Dennison said the opposite is true. The bulk of the adjusters, many of whom are brought in on a contractual basis to meet the increased demand for aid during the widespread disaster, are paid on a scale relative to the claim - the higher the cost to repair the damage, the more the adjuster is paid.

'The challenge is consistency,' Dennison said. Because of the variety in adjusters who descend on a disaster area, there are swings in how information is presented and processed. And some insurance companies, Dennison admits, have been better at meeting the goals of the insurance program than others.

Floods have 'long tail'

Floods are unlike other disasters. The long-term damage sets in over time, and there is confusion during the first moments following a flood about what action to take.

Many people dig into the cleanup effort, tossing out damaged contents and materials with abandon, not realizing documented proof is needed for later compensation.

Dennison said that in addition to people not having adequate documentation as spelled out under the national flood program, he estimates that around 90 percent of flood victims underestimate the value of their losses.

'If I had to point to one thing that I've had to deal with people, it's the proof of loss,' Dennison said. In Vernonia, the time to file proof of loss claims was extended from 60 days to 120 days, with a deadline now set for March 29.

If the first claim seems shy of the actual damage, subsequent claims can be filed. The catch is that all claims have to be accompanied with proof of damage. It's a not-so-easy task. Flood-damaged homes have a tendency of not giving up their more debilitating secrets for many months after the event.

Further muddying the water is where some people live. Because the Christophersens' home is located outside of the flood zone and in rural Columbia County, not the city of Vernonia, different elevations come into play in determining repair standards. Insurance companies use those standards to determine whether certain repair costs apply. For the Christophersens, it can mean the difference between raising the house - a mitigation effort against future floods - or simply using splints to level the foundation.

'If we lived in Vernonia, I don't think there would have been a problem,' Christophersen said, noting that Vernonia's standards would require the home to be lifted 3 feet above the flood plain.

On Monday, Christophersen learned that her insurance carrier is sending out a structural engineer to examine her home. For her, it was the first ray of good news she's had in a while, and it feeds into her optimism that she will ultimately be fairly compensated for her loss.

'It's only a matter of time,' she said.

The problem, however, is that the same is true about the next flood.