Federal rules stall insurance checks for flood victims

Federal rules stall insurance checks for flood victims
Updated: Dec. 1, 2016 at 4:11 PM CST
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(WAFB) - Louisiana flood victims who have flood coverage are in a holding pattern while they wait on their insurance companies to cut checks to pay for their repairs.

The fact that so many homeowners are still just beginning to rebuild is shocking to Derek Talbot, the vice president of marketing with GMFS, a Louisiana residential mortgage company.

"Approximately 2,000 customers were flooded, and of those, only about 800 have flood insurance," Talbot said.

Those who did not have flood insurance sought help from FEMA or the SBA. Talbot said a lot of homeowners with flood coverage were able to file claims with their insurance companies, but that doesn't necessarily mean the money is in the bank.

"Here we are almost in month four and only half of those customers have received that final check from the insurance company," Talbot said.

According to Talbot, because the federal government funds the roughly $923 billion residential mortgage industry, mortgage companies like GMFS must follow very strict guidelines. For example, if the insurance loss is equal or greater than $40,000, the homeowner must use a licensed contractor.

"When the check is written to the insurance company, it is written out to the mortgage company as well because they have a lien on the home, and then our job is to take that money and put it in escrow and disburse it periodically so that repairs can be made to the home," Talbot said.

The problem is that money can only be released to the homeowner a little at a time, Talbot says. For homeowners who are required to raise their homes, they could be in for an even longer wait.

"I think the more difficult ones are the ones facing the fact they have to do elevation on their homes. It's extremely challenging, adds cost and questions about how it's going to be covered. The bottom line is, if you don't have the funds to do the repairs, it really complicates things a lot," Talbot said.

This is why he and other GMFS leaders are working with state and federal officials to help revise the rules to help victims rebuild faster in the future.

"Louisiana had its share of natural disasters and quite frankly, we feel the play book should have been written a long time ago and could be better," Talbot said.

GMFS has helped develop a survey to help collect data from all Louisiana homeowners and renters impacted by the flood. Click here to take the survey.

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