Hurricane Sandy: Still Causing Foundation Damage
It has been nearly 15 months since Hurricane Sandy hit New York and New Jersey, and still thousands of people have yet to resolve their flood insurance claim. The most frequent (and most expensive) dispute that victims continue to have with their flood insurance carriers is the coverage of foundation damage.
A brief reading of the NFIP Flood Adjuster Claims Manual on foundations makes it clear why there have been so many denials.
Floods can cause significant foundation damage, but so can settlement, improper construction, earth movement, tree roots, and sinkholes. Many times an insured will claim normal settlement cracks in slabs and foundations as flood related. The insured will indicate that he or she never noticed the foundation and slab damage until after the flood. This neither proves nor disproves that the damage resulted from flood.
Most slab and foundation damage occurs because of a lack of moisture in the ground. The soil shrinks away from the foundation, allowing the grade beams to settle downward under the supported weight. This results in a bowing effect and cracks. Excess water in the ground exerts upward pressure on the slab floor and inward pressure on the subgrade foundation walls. This also results in cracks and displacement. Damage of this kind is considered the result of hydrostatic pressure and is not covered under the SFIP, unless there is a general condition of flooding in the area.
Flooding with sufficient water movement to carry the subsoil away (scouring) from the slab or foundation walls generally leaves visible signs. Claims for foundation damage without any visible indication of scouring or land subsidence bear close scrutiny. Most foundation and slab damage that occurs without any visible signs of soil displacement may have resulted from causes other than flooding and is not covered by the SFIP. The adjuster must carefully check the perimeter and underneath the building for soil washout from velocity water flow. When finding no indication, the adjuster must resist a claim for foundation damage. The insured then has the responsibility to prove that the damage was caused by flood. Use of structural engineers must be limited to losses with visible indications of flood damage or of floodwaters’ having exacerbated preexisting damage.
As seen above, adjusters are instructed to “resist” a claim for foundation damage. Although the adjuster’s manual does recognize hydrostatic pressure as a cause of foundation damage when there is a general condition of flooding in the area, many Sandy victims have been improperly denied coverage on the basis that hydrostatic was the cause of the damage.
About the Author: Christopher W. Gerold is an attorney in Wolff & Samson’s Disaster Recovery Claims Group. Chris represents homeowners, condominium associations and businesses with their Sandy related insurance claims with a special focus on flood insurance. For more information on flood insurance and ways Wolff & Samson can help you with your flood insurance claim, please contact Chris at (973) 530-2061.