You don't indicate whether the property was flooded. If the damage was from flood water & not wind driven rain the homeowner's fire & extended coverage does not provide coverage. The NFIP flood insurance program, generally speaking, is the homeowner & business owner's only source of coverage for flood damage. In addition the loss recovery may be limited by the terms of the fire & extended policy. Many if not most policies have a "named storm" deductible, anywhere from 2 to 5% of the policy limits that applies for named storms like Sandy. So, if a homeownwer had $200,000 in coverage, damage would have to exceed $4000-$10,000 for the company to pay for damages sustained in a named storm event. This is not to say that the "independent" adjusters provided by the company to assess the losses are infallible. Clearly, for major damages an insured's best option is to secure the services of a "public" adjuster who works solely on behalf of the policy holder and is paid, in many cases, as a percentage of the recovery.
The lesson to be learned is that NFIP coverage is relatively inexpensive and should be held by almost every property owner particularly if they are in any classification of a flood zone. In many cases mortgages require that the property owner carry the coverage. Note: the maximum available for homes is $250,000 for the structure and $250,000 for contents with a deductible, of course. Commercial properties can secure coverages of $500,000/$500,000.
There will be many people who will learn these facts of insurance coverage and many will be sorely upset at their unanticipated losses. If they have any recourse it may be for errors and omissions on the part of their insurance agents who should have informed them of the limitations of coverages and availablity of NFIP when they sold them their insurance coverage. After Katrina several agents were sued for their failures to so advise their clients. The Courts have held in many states that such information is required by agents to fufill their professional duties towards their clients.
