Commissioner Causey reminds insurance industry of state law that prohibits penalizing consumers who make certain Hurricane Helene-related claims

RALEIGH

North Carolina Insurance Commissioner Mike Causey has issued a new bulletin to the insurance industry, reminding insurers to follow state law and not penalize certain consumers in Hurricane Helene-related claims.

Because of a FEMA requirement, consumers must first get a denial from their insurance company before making a flood-related claim through the National Flood Insurance Program. The bulletin reminds insurance companies that state law prohibits penalizing policyholders for making such a claim or inquiry when no payment is made by the insurance company.

A copy of the text of the bulletin follows:

“Please be advised that insurers should not take underwriting actions, such as consent to rate adjustments or policy modifications, in response to flood-related claims or inquiries on homeowner’s insurance policies when no coverage exists.

“Taking underwriting action in response to requests for these letters unfairly penalizes policyholders who are seeking only to confirm the lack of coverage and may be in violation of N.C. Gen. Statute 58-36-115.

“FEMA’s Individuals and Households Program (IHP) provides financial assistance to eligible individuals and households impacted by disasters. To qualify for IHP assistance, FEMA often requires a letter from the policyholder's homeowners insurance carrier verifying that the loss is not covered under their existing policy. This letter enables a consumer to access critical disaster recovery funds.

“We ask insurers to recognize these requests as FEMA eligibility verification requirements rather than as claims activity. We would encourage insurers to ensure that your frontline claims representatives be proactive in asking questions to ensure that the inquiries are related to Hurricane Helene.

“Thank you for your attention to this important matter and for supporting our collective disaster recovery efforts.

“Please refer any questions concerning this advisory bulletin to the Department’s Consumer Services Division at CSD@ncdoi.gov or 855-408-1212.”

For more information on all bulletins issued by NCDOI, visit www.ncdoi.gov/helene or contact the NCDOI Consumer Services Division at 1-855-408-1212.