FEMA approves “Advance Payments” for flood damage (Hurricane Harvey) - IRS Payroll Taxes

This just in: FEMA approves “Advance Payments” for flood damage (Hurricane Harvey) re severe storms in Texas, Louisiana, Mississippi and Arkansas. In a nutshell, there are two ways claimants can receive advance payments for flood claims:

Option One  “Pre-adjuster Inspection” When a policyholder provides a bona fide Notice of Loss, the insurer may offer an advance payment after verifying coverage, deductibles and verifying the insured property was flooded. This advance payment will not exceed $5,000. The insurer may offer a total advance payment of up to $10,000 if the policyholder provides the following documentation:

1.     Photographs depicting flood damage to covered property.

2.     Documentation verifying out-of-pocket expenses related to the repair or replacement of covered property, such as receipts or canceled checks.

3.     A contractor’s itemized damage estimate.

Option Two “Payment for Significant Damage” The insurer can offer a larger advance payment (up to 50%) 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.

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