And some policyholders are discovering--or rediscovering--a hard truth: standard homeowners’ policies typically do not cover flood damage; that is, damage from rising water.
While comprehensive auto insurance can cover flood damage, that’s not the case for homeowner’s coverage.
Protection from flood damage to homes must be obtained separately through the National Flood Insurance Program, which is typically purchased through one’s existing homeowner’s insurer.
State Farm, the largest insurer of homes and cars in Virginia in 2015, reported 850 homeowner claims and 560 auto claims statewide as of Monday, October 10.
“We’re just really in the initial stages,” said MichalBrower, a State Farm spokeswoman, who added that the number of claims is expected to increase.
Virginia so far has generated more State Farm auto claims than any other Southeastern state affected by [Hurricane] Matthew, Brower said.
Florida and South Carolina each have reported about 500 auto claims for the Illinois-based insurer.
“Honestly, we don’t necessarily know why,” Brower said.
State Farm reported 8,350 total homeowner claims and 2,150 auto claims from Florida through Virginia as of Monday, October 10.
USAA and Allstate were the No. 2 and No. 3 homeowner insurers in Virginia last year, according to the Insurance Information Institute, a New York-based industry association. State Farm, Berkshire Hathaway Inc. and USAA were the top three auto insurers in the state, the association reported.
“We’ve had roughly 15,000 total claims” from Florida through Virginia, said Rich Johnson, a spokesman with Texas-based USAA, on Monday afternoon. “We’re seeing a lot of wind damage.”
There appeared to be a higher incidence of flood-damage reports in Virginia extending into North Carolina, he added.
USAA has sent a catastrophe unit to Fayetteville, N.C. because of the flooding impacts in that area.
As more people return to their homes, more claims are expected to roll in.
“I think we’re going to see it change and alter in the days to come,” Johnson said, adding that the additional claims volume could continue for weeks.
Allstate said it could not provide a claims-volume estimate late Monday afternoon.
“It is too soon to know the number of claims we expect to receive, but our adjusters are working closely with customers in affected areas to help guide them through the claims process,” said April Eaton, an Allstate spokeswoman, in an email.
“We’re getting a number of floodlike claims that are not actually covered,” said Susan Tinsley, general manager of the Richmond-based Virginia Property Insurance Association, which was formed in 1968 to provide dwelling and commercial coverage for those who can’t find it in the standard market for any number of reasons.
The association reported receiving 60 claims in Virginia as of Monday, October 10, primarily related to trees fallen on homes, roof damage and flooding, in that order, Tinsley said. About 10 of those are for flood damage.
The association insures roughly 29,000 policyholders, about 8,000 of them in its “sea-coast territory,” extending from Hampton Roads up through the Eastern Shore.
It expects, based on current volume, to get about 150 claims from that region within the next two to three days, Tinsley said.
Virginia is one of 19 states that have in place some form of so-called hurricane or “named storm” deductibles, which were introduced as a way to shift more of the risk from hurricanes to policyholders “without raising overall premiums to unaffordable levels,” according to the Missouri-based National Association of Insurance Commissioners.
Hurricane deductibles can take the form of a fixed-dollar figure or, more often, a percentage of a home’s insured value, varying from roughly 1 percent to as high as 10 percent, according to the NAIC.
Brower, the State Farm spokeswoman, said that the hurricane-deductible provision for Virginia policyholders was not triggered because no hurricane warning or watch was issued for the state.
Asked whether that was good news or bad news for State Farm customers in Virginia, Brower recommended that policyholders check with their agents to find out what deductibles were set in their policies.
“Customers, in many cases, will be paying a lower deductible,” said Erin Zabel, a State Farm agent in Chesapeake.
As of late Monday, October 10, it was unclear whether Matthew had triggered the hurricane-deductible provision for other insurers.
We would like to thank The Virginian Pilot for reprint permission.