No Direct Physical Loss HVAC Decision Upheld

Dear Policyholders:
After reviewing the issues raised in your flood insurance appeal, the Department of Homeland Security, Federal Emergency Management Agency (FEMA) agrees with the decision of your flood insurer, Wright National Flood Insurance Company, to deny payment for your interior air handlers.

In your appeal, you contend your air handlers, although not directly damaged by flood, needed replacement in order to be compatible with the rest of your damaged HVAC system due to a change in refrigerant type.

The Standard Flood Insurance Policy (SFIP) insures against direct physical loss by or from flood. (See SFIP (I), (II)(B)(12)). The claimed property must have evidence of physical changes from the flood event. Here, your interior air handlers were above the flood waterline, and were not damaged by the flood event. For these reasons, FEMA’s review finds the SFIP does not provide coverage for your air handlers.

The SFIP also excludes the cost of complying with any ordinance or law requiring or regulating the construction, demolition, remodeling, renovation, or repair of property. (See SFIP (V)(A)(6)). Here, your HVAC units required replacement only to be compatible with your other HVAC unit due to a change in refrigerant type. For this reason, FEMA’s review finds the SFIP will not provide coverage due to code requirements for the HVAC system.

Based on the information provided, FEMA concurs with the insurer’s denial of coverage.

We are sorry we cannot be of further assistance to you at this time and hope this information helps you to resolve your flood insurance issues.

Sincerely,
Kelly Bronowicz
Director, Policyholder Services Division
Federal Insurance and Mitigation Administration