NFIP Will Cover Hurricane-Driven Oil Damage, FEMA Confirms 

NU Online News Service, June 9, 11:45 a.m. EDT

WASHINGTON—The National Flood Insurance Program will pay claims for damage to homes and contents from oil driven ashore during hurricanes, its officials have announced.

In a statement, Rachel Racusen, press secretary to the Federal Emergency Management Agency, which runs the flood program, said, “The mixing of oil and other pollutants in flood water is not unusual during a storm.”

She added, “Damage caused by these pollutants in flood waters is covered under the NFIP, subject to the provisions in the Standard Flood Insurance Policy.”

Effectively, Ms. Racusen confirmed what Mississippi Insurance Commissioner Mike Chaney told state residents in a statement released Tuesday by his office.

In the statement, Mr. Chaney said that to recover damages stemming from the additional risks oil poses should a hurricane strike, claimants seeking payment under the NFIP must prove there is a flood as defined in the standard flood insurance policy.

If that can be proven, Mr. Chaney said, damage caused by pollutants to commercial policies is limited to $10,000.

Home and condo payments will be limited to policy limits, and oil or water with oil in the yard is not covered.

Mr. Chaney further said that the cost of complying with any local or state ordinance, including one that requires special removal methods for oil, is specifically excluded, with the exception of certain floodplain management mitigation requirements.

• • 6/9/2010 12:19:16 PM
  • andrea massie
  • FEMA pays for BP mess
  • While I don't disagree with the coverage provided, I do hope that the already struggling FEMA program will somehow be able to subrogate against BP for all of these damage should it occur.
• • 6/10/2010 2:12:21 PM
  • Ari Ciarlo
  • Will there be coverage if no flood policy exists?
  • What if a storm causes oil damage from oil being in the rain, but not a flood? Would your regular homeowners policy cover that or is that an exclusion? My home is not in a flood zone; such as was the scenario with many homes in Tennessee who have no coverage and no way to recover now.
• • 6/10/2010 7:15:18 PM
  • paula aschettino
  • Will FEMA let BP off the hook?
  • I am hoping that FEMA will make a provision that any oil cleanup expenses covered under the Flood Insurance Program shall be reimbursed by BP oil and detailed data on any losses are required as well as detailed wind damage data. Let's face it, FEMA and the National Government do a terrible job providing for Flood Insurance. The Legislature does not appropriate funds to keep the Flood Program going the only flood insurance program in the US. Allowing the Flood Program to cease for periods of time leaves the consumers without Flood Insurance for renewals, mortgage requirements and new flood policies cannot be purchased. The cost of the Flood Program is not handled well by FEMA and they do not know how much actual flood damage occured. This is unacceptable! How will the Congress address evaluating the possible cost of oil cleanup and will the citizens pay for this in increased premium rates? BP will be responsible for this cleanup. FEMA does not keep records on separating wind and water claim data as of now. FEMA should mandate any Write your own Insurers MUST provide detailed data on wind events and damages to properties or else they do not get the policies. Citizens are paying now for related damage claims from wind passed over to the Flood Program by the same insurers who cover wind losses and Flood for the property. This is a conflict of interet. Will this happen with oil cleanup as well? Our government must smarten up and set the rules to protect the citizens from taking on risks and bailing out the greedy insurance industry.
• • 6/16/2010 7:09:20 PM
  • Lucy Mangielli
  • Hurricane Driven Oil Damage
  • On June 9, FEMA announced that NFIP will pay claims for damage to homes and contents from oil driven ashore during hurricanes. Can you explain the provision that states: Home and Condo payments will be limited to policy limits, and oil or water with oil in the yard is not covered. Thank you.

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