By Lisa Loomis

In the wake of Hurricane Irene, Jon Jamieson of Jamieson Insurance had a migraine for 13 days because of his extreme frustration in dealing with the National Flood Insurance Program and the MIA adjusters who were overdue to assess his clients’ properties.

Hurricane Irene-related flooding was the “biggest challenge in the history of our business,” he said.  The flood of 1998, which hit primarily The Valley, Lincoln and Bristol, was a more geographically limited event, versus Irene which hit a huge swath of Vermont.

Jamieson said the breadth of the destruction in Vermont was compounded by the fact that the National Flood Insurance Program (NFIP) is a very bad product. And it is the only flood insurance available and banks require property owners to carry it as a condition of issuing a mortgage.

“NFIP is the only game in town. It is administered by FEMA but controlled by Congress. It’s underfunded and not properly administered. It’s a very barebones policy that does not cover some very important expenses such as temporary housing and loss of income for business owners. It provides coverage for things like furnaces at $3,500 when they cost $10,000 and replacing a floor at $1,200 when it costs $3,600,” he explained.

He said that he and his colleagues at the Vermont Independent Agents Association had lobbied Congress to improve NFIP policies, as have similar organizations throughout the country.

NFIP policies are sold by individual insurance companies which get their independent agents to sell the policies. When a flood event occurs, NFIP is supposed to send hired, independent adjusters to the scene. Those adjusters examine the damage and file a report and checks are supposed to be issued to the insured quickly.

That’s not what happened in The Valley and in other parts of Vermont in the wake of Irene. Jamieson said the adjusters are supposed to be on scene within 72 hours and some didn’t arrive in The Valley until three to four weeks after the flood. Some of those who did arrive were surly and uncooperative and some adjusters issued claim reports that under-represented the amount of damage done.

And that was frustrating for Jamieson.

“When your name is on the door and the promise that is made is yours, it’s really awful to have to work so hard to make this product do what it should. The average Joe on the street just assumes that all insurance works this badly and it’s just not true. That’s what keeps me up at night,” he said.

Because the contracted adjusters answer to NFIP, getting them to process claims fairly and expeditiously took getting the Vermont Department of Banking, Insurance, Securities and Health Care Administration (BISHCA) involved.

“We ended up contacting BISHCA with the claim information and Brenda Clark was able to exert influence on the contractors who have to be licensed in Vermont to work here. Most of them were from out of state. She made calls and got things done. BISHCA is an example of a great regulatory agency, we are lucky in Vermont.

Jamieson took issue with The Valley Reporter’s editorial on the subject of the MINT restaurant in Waitsfield having its flood claim denied. The villain, he said, is not Union Mutual, the insurance company that issued the NFIP policy. Union Mutual is bound by the terms of the NFIP policies as well as its definitions.

NFIP deemed MINT to be below grade because there is a shallow ramp from the entryway into the restaurant and because a railroad tie was used on the east side of the walkway into the building to create or define the walkway.

The issue, he said, is a question of whether an agent improperly issued a policy to a building that did not qualify.

If it is the case that a policy was improperly issued, agents carry professional liability insurance (errors and omissions) policies designed to cover a situation like this.

“One other ironic thing I forgot to mention was that Union Mutual was the only insurance company to donate to the Mad River Valley Community Fund in the wake of the flood (it was a significant donation). They really are good people; they employ a lot of folks in Washington County and they pay a living wage. My point is they were the last people in this saga who deserved the bad press,” he said.

Josh Fitzhugh, president of Union Mutual, said, via email, “Although our agents are independent contractors, we are responsible for their actions in selling our policies. Given the concerns expressed by the insured and your newspaper, we have begun an investigation to determine whether the agent here acted appropriately and properly advised the insured as to the limitations of the NFIP policy.  If we find they did not, we will take corrective action.”