In their ongoing response to the aftermath of Hurricane Helene, North Carolina's Insurance Commissioner Mike Causey recently dispatched a bulletin to insurers, cautioning them against penalizing policyholders that reach out with flood-related inquiries. Under state law, as reinforced by the bulletin, consumers mandated by FEMA to receive a rejection from their insurance company before tapping into the National Flood Insurance Program are not to face penalties for such flood-related claims if no payment is made by the insurers. Despite intended for verification, these inquiries are often misclassified as claims activity, leading to unforeseen consequences for the claimants, according to the North Carolina Department of Insurance.
Causey's bulletin clearly states that insurers are prohibited from taking "underwriting actions, such as consent to rate adjustments or policy modifications," in reaction to inquiries about flood damage coverage if a homeowner's policy does not cover such damage, as per the North Carolina Department of Insurance. These actions can unfairly penalize policyholders who are only seeking confirmation of their policy's limitations—a scenario that the State of North Carolina finds unacceptable.
The Insurance Commissioner asks the insurance companies to view the requests as part of the "FEMA eligibility verification requirements rather than as claims activity." As highlighted in the bulletin, navigating the repercussions of a disaster like Hurricane Helene is complex, with many needing guidance through a process often fraught with bureaucratic twists that, devoid of understanding, can further victimize the already struck homeowners, as reported by the North Carolina Department of Insurance.
For additional clarification or guidance, the bulletin directs insurers to reach out to the North Carolina Department of Insurance's Consumer Services Division. Commissioner Causey and his department are clearly striving to facilitate the recovery of the individuals and households affected by disasters such as Hurricane Helene, while ensuring that insurance providers adhere to the law and treat their customers fairly.
