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Insurance Duplication of Benefits

Appeal Brief Appeal Letter

Appeal Brief

DesastreFEMA-1044-CA
ApplicantSan Buenaventura
Appeal TypeSecond
PA ID#111-65042
PW ID#92789
Date Signed1997-12-16T05:00:00
Citation: Appeal Brief; Second Appeal; City of San Buenaventura; FEMA-1044-DR-CA; PA#111-65042

Cross-Reference: DSR 92789; Insurance Deductible; Duplication of Benefits

Summary: Following the storms in January 1995, in the City of San Bueneventura (City), California, FEMA prepared DSR 92789 for $505,916 to fund estimated repairs of the Ventura Municipal Pier. However, the eligible funding was reduced to $100,000 (deductible) to account for insurance coverage of $405,916. The State forwarded the first appeal on February 9, 1996. The basis of the appeal was that the DSR was written for $505,916; the insurance proceeds were actually $194,540; and the eligible funding should be reinstated at $311,376. The Regional Director responded with a request for additional information to establish which items of work were covered by insurance and when the damages in question occurred. Upon receipt of additional information, the Regional Director determined that some of the damages included on DSR 92789 occurred prior to the disaster event. Based on the additional documentation, the Regional Director estimated the total eligible expenses at $263,027. The Regional Director subtracted the insurance proceeds from the eligible expenses and eligible funding remained at the $100,000 deductible, pursuant to 44 CFR 206.253(a), which states that the Regional Director shall reduce the eligible costs by the actual amount of the insurance proceeds related to the eligible costs. On June 6, 1997, the State forwarded the second appeal. In this appeal the City is requesting reimbursement of $215,078 - $200,000 for deductibles and $15,078 for engineering costs.

Issue: Is the applicant eligible for $215,078 in disaster assistance?

Findings: Yes. Based on provided documentation, $409,619 of pier repairs are eligible expenses. Insurance proceeds ($194,540) have been subtracted from the eligible expenses. Therefore, $215,078 is eligible for reimbursement from FEMA.

Rationale: Pursuant to 44 CFR 206.253 (a), the eligible costs have been reduced by the actual amount of insurance proceeds and, as such, $215,078 is eligible for funding.

Appeal Letter

December 16, 1997

Mr. Gilbert Najera
Governor's Authorized Representative
Governor's Office of Emergency Services
74 North Pasadena Avenue, West Annex, Third Floor
Pasadena, California 91103

Dear Mr. Najera:

This is in response to your letter dated June 6, 1997, to the Federal Emergency Management Agency (FEMA). With that letter, you forwarded a second appeal of damage survey report (DSR) 92789 under FEMA-1044-DR-CA on behalf of the City of San Buenaventura (City). The City is requesting reimbursement of $215,078 for repairs to the Ventura Municipal Pier (pier). This amount was not covered by the City's insurance company.

FEMA prepared DSR 92789 for $505,916 to repair and replace piles and decking of the pier, which was damaged by the disaster DR-1044 storm incident. Upon review, the Regional staff determined that $405,916 would be recovered from the subgrantee's insurance company and reduced the DSR to $100,000 to cover the deductible.

On February 9, 1996, the State forwarded the first appeal. The applicant argued that the amount recovered from the insurance company was $194,540, and the eligible expenses should be $311,376 ($505,916 -$194,540). On August 30, 1996, the Regional Director requested additional information to ensure no duplication of benefits would occur. Documentation requested included a "statement of loss" from the insurance company to demonstrate which items of work were covered by insurance and to establish which damages were a result of the disaster. Upon receipt of the additional documentation, the Regional Director determined that $263,027 were eligible disaster-related expenses. The Regional Director determined eligible funding to be limited to the $100,000 insurance deductible. Therefore, the first appeal was denied.

The second appeal was submitted on June 6, 1997, requesting reimbursement of $215,078 for pier repairs not recovered from insurance. The applicant contends that pre-disaster damages were accounted for in the "statement of loss" from the insurance company, which concluded that damages attributable to 1044-DR to be $409,619. The City received $194,540 in insurance proceeds, which leaves $200,000 in deductibles and $15,078 for administration and engineering costs eligible for reimbursement by FEMA. After review of the documentation provided, including the January 2, 1995, and January 8, 1995, pier inspection reports, we have determined that disaster-related damages to the pier totaled $409,619. The insurance settlement totaled $194,540. Therefore, $215,078 is eligible for FEMA funding. As the requirements of Title 44 of the Code of Federal Regulations, section 206.253 have been met, we find that $215,078 is eligible for funding. Therefore, I am approving the second appeal.

By copy of this letter, I am asking the Regional Director to take appropriate action to implement this determination. Please inform the applicant of my decision.

Sincerely,
/S/
Lacy E. Suiter
Executive Associate Director
Response and Recovery Directorate

cc: Ray Williams
Acting Regional Director
Region IX