Advance Payments Allowed under NFIP Flood Insurance Policies for Harvey
For those who own a structure flooded in Harvey, the insurance companies have been given special permission to pay up to $20,000 to policy holders in advance of the final inspections and payment.
Advance Payment Opportunity One: Pre-adjuster Inspection
Once a policyholder provides a notice of loss, an insurer may offer an advance payment up to $5,000 after confirming coverages and deductibles and validating that the insured property has flooded. This can be done over the phone or email.
An insurer may offer a total advance payment of up to $20,000 if the policyholder also provides the following documentation:
1. Photographs depicting flood damage to covered property; and
a. Documentation verifying out-of-pocket expenses related to the repair; or replacement of covered property, such as receipts or canceled checks; or
b. A contractor’s itemized damage estimate.
Advance Payment Opportunity Two: Payment for Significant Damage
An insurer may offer a larger advance payment up to 50 percent of the contractor’s estimate prior to receiving a proof of loss if:
1. The insurer receives a contractor’s estimate of necessary repairs on an item-by-item basis for the insured property; and
2. A flood insurance adjuster retained by the insurer has inspected the insured property.
Full Advance Payment Guidance is Attached
Notes: These payments are not for Additional Living Expenses (ALE). The advance can be for buildings and contents. The issuance and acceptance of an advance payment does not constitute an admission of coverage under the policy. If the loss is determined not to be a covered loss, or if the advance payment exceeds the amount of the actual covered loss, the insured recognizes that they are not eligible for the payment and agrees to repay the advance payment (or portion thereof).
An Advance Payment Request template is attached for your use or reference.
Related InformationInsurance Bulletin
Advance Payment Form
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