National Flood Insurance

 

NFIP

  Should You Get Certified?

The National Flood Insurance Program is the insurance arm of the Federal Emergency Management Agency (FEMA). NIFP was created in conjunction with the National Flood Insurance Act of 1968 following the devastation of Hurricane Betsy. Flood losses tend to be the most costly and widespread flood damage was crippling private insurance companies.

Because insurers weren’t able to offer cost-effective flood coverage, the NFIP was created to maintain a large enough pool of funds to pay for such events. Even today, most standard homeowners policies do not offer flood insurance because it is simply too big a risk for insurance carriers.

The average NFIP claim payment is $110,000. While participation in the program is typically elective, homeowners in high-risk zones are required to purchase it.

Most claims are not flood-related, however, those that are cause considerable damage. Out of over 670,000 claims caused by Hurricane Harvey in Texas, roughly 91,000 were NFIP flood claims, totaling over $8.5 billion in payouts. Those claims could only be handled by NFIP certified adjusters. During the 2017 peak of hurricane season, the demand for flood certified claims adjusters skyrocketed, but the supply of available and certified adjusters was incredibly low.

NFIP Certification Requirements:
The application for NFIP authorization is split into 5 sections…

1.) Residential (Dwelling)

2.) Manufactured (Mobile)

3.) Home/Travel Trailer

4.) Small Commercial (General Property)

5.) Large Commercial (General Property), and Condominium (RCBAP)

 

According to FEMA, to be approved for Residential, Commercial, or Manufactured (Mobile) Homes losses or any combination thereof, an adjuster must …

A. Have at least 4 consecutive years of full-time property loss adjusting experience.
B. Be capable of preparing an accurate scope of damage and dollar estimate to $50,000 for manufactured (mobile) homes and to $500,000 for residential and commercial losses.
C.  Have attended an NFIP workshop and be able to demonstrate knowledge of the SFIP and of NFIP adjustment criteria for all policy forms.
D. Be familiar with manufactured (mobile) home and Increased Cost of Compliance adjusting techniques.

To be approved for Large Commercial or RCBAP losses, or both, an adjuster must…

A. Have at least 5 consecutive years of full-time large-loss property adjusting experience.
B. Be capable of preparing an accurate scope of damage and dollar estimate of $500,000 or more.
C. Submit written recommendations from three insurance company supervisory or claim management personnel. The recommendations must reflect adjusting experience only.
D. Provide information regarding current Errors and Omissions coverage.

Although these requirements may seem daunting to new adjusters, the shortage of flood certified adjusters means it is well worth your time to get certified if possible. There are a few ways to go about obtaining certification. Pilot Catastrophe, Crawford, and Worley, among others, offer flood certification mentorship programs or workshops for licensed adjusters that are recognized by the NFIP. Some companies offer an approved 2-day flood policy certification course, but Pilot takes it further by offering additional courses, including 3 days of flood-specific Xactimate training and 5 days of flood claim handling at their facility.

To be eligible for their flood mentorship programs, you must have an adjuster license and apply to be on their rosters. Once accepted, you’ll be able to see training dates on their respective portals. To apply for an independent flood certification number (FCN) outside of the mentorship program, you will need to meet the 4-year minimum.

NFIP offers several free online courses that cover basic and specialized claims topics, as well as courses in general flood insurance topics which may be of interest to claims adjusters. At present, the online courses do not fulfill any requirement for certification through the NFIP.

FEMA hasn’t fully transitioned to online NFIP certification but they also aren’t regularly offering in-person certification workshops for adjusters either. The fact that NFIP claims are becoming more and more prevalent puts today’s claims adjusters in a difficult position.

Bottom line, if you have the opportunity to get your NFIP Flood Adjuster Certification, do so!

 


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