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Insurance battles begin for flood-damaged properties

Workers on Sunday gather by the sidewalk of Main Street that caved in after Saturday night's flooding in Ellicott City. Business owners and homeowners affected by the flooding should contact their insurance broker and notify their carrier of a loss immediately, even if they are not covered for flooding, according to a Baltimore insurance law attorney. (Kevin Rector/The Baltimore Sun via AP)

Workers on Sunday gather by the sidewalk of Main Street that caved in after Saturday night’s flooding in Ellicott City. Business owners and homeowners affected by the flooding should contact their insurance broker and notify their carrier of a loss immediately, even if they are not covered for flooding, according to a Baltimore insurance law attorney. (Kevin Rector/The Baltimore Sun via AP)

As business owners in Ellicott City review the damage from Saturday’s historic flooding, they should also be taking immediate stock of their insurance coverage and making sure they elected to be insured for flooding.

Flood insurance is a separate type of coverage provided through the federal government’s National Flood Insurance Program, according to Brian S. Goodman, a Baltimore insurance law attorney with Kramon & Graham P.A.

“If a business owner in Ellicott City has flood insurance, that business owner is probably not going to have too many problems” filing a claim, Goodman said.

For the 180 cars that were towed from the affected area, many standard insurance plans cover flood damage without extra coverage.

“If your car was washed away, obviously you should immediately report that to the carrier, and most of those claims will be filled,” he said.

Business owners and homeowners affected were being allowed back into the area Monday afternoon to begin assessing damage. Goodman said they should contact their insurance broker and notify their carrier of a loss immediately, even if they are not covered for flooding.

Some businesses may also have civil authority coverage, which allows them to file a claim for lost income when the government denies access to insured property after a disaster, Goodman said.

Property owners have a duty to mitigate damage and should contact repair companies to begin the cleanup and drying process immediately, he added.

“These reparation companies are going to be very busy in the coming weeks,” he said.

The National Flood Insurance Program recommends taking photos of floodwater in the property and making a list of lost or damaged items, documenting their value as much as possible. A proof of loss to support the claim must be filed within 60 days of the flood.

Goodman, who also serves as general counsel for the National Association of Public Insurance Adjusters, said many business owners who are insured against flood damage may want to hire an adjuster to assess the damage and deal with the insurance company. An adjuster can take on some of the more stressful work during what can be an emotional time, according to Goodman, which to some people is worth paying their fee.

Property owners may also find themselves arguing over the cause of their damage, which Goodman said comes up after events like hurricanes which combine high wind and rain.

“My suspicion is that there will be issues regarding causation of the property damage in Ellicott City,” Goodman said. “Was it flood or was it something else?”

For businesses that emerged from the flooding unscathed, the disaster may serve as a wakeup call for them to review their coverage for the future.

“If you’re anywhere in a vulnerable area, it’s really something you should look at,” he said.