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Insurance Requirement

Appeal Brief Appeal Letter

Appeal Brief

DisasterFEMA-1785-DR
ApplicantSt. Lucie County
Appeal TypeSecond
PA ID#111-99111-00
PW ID#1882
Date Signed2012-05-31T04:00:00

Citation:         FEMA-1785-DR-FL, St. Lucie County, Insurance Requirement                 

Cross-

Reference:      Insurance Purchase Requirement

Summary:       St. Lucie County (applicant) received funding to repair damage to the Tradition Field Sports Complex as a result of Tropical Storm Fay.  As a result,  Project Worksheet (PW) 1882 was prepared for $20,096.  As part of FEMA’s insurance review of PW 1882, FEMA discovered that the Tradition Field Sports Complex received funds as a result of a prior disaster and therefore the Applicant was required to obtain and maintain appropriate insurance on this facility.  FEMA de-obligated the funds because the Applicant failed to obtain and maintain the required insurance coverage.  In its first appeal, November 23, 2009, the Applicant asserts that the prerequisite insurance obligations have been satisfied.  Additionally, the Applicant stated that the damage outlined in PW 1882 was not subject to any such pre-existing insurance requirement.  FEMA denied the appeal stating that the Applicant did not satisfy the requirement to obtain and maintain insurance for facilities that received FEMA funding for repairs to damage sustained during a previously declared event.  In its second appeal, August 31, 2010, the Applicant reiterated its position and did not provide additional documentation.

Issue:              1.  Is an Applicant required to both obtain and maintain insurance coverage as a      

                             condition of receiving Federal assistance?

Finding:           1.   Yes

Rationale:       Section 311 (a) and (b) Insurance of the Robert T. Stafford Disaster Relief and Emergency Assistance Act; 44 Code of Federal Regulations (CFR) §206.253(f),Insurance requirements for facilities damaged by disasters other than flood; and Disaster Assistance Fact Sheet DAP9580.3 Insurance Considerations for Applicants.

Appeal Letter

May 31, 2012

Bryan Koon

Director

Florida Division of Emergency Management
2555 Shumard Oak Boulevard
Tallahassee, Florida 32399-2100

Re:  Second Appeal-St. Lucie County, PA ID 111-99111-00, Insurance Requirement,

       FEMA-1785-DR-FL, Project Worksheets (PWs) 1882

Dear Mr. Koon:
This letter is in response to a letter from your office dated December 30, 2010, which transmitted the referenced second appeal on behalf of St. Lucie County (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) de-obligation of $20,096 in funding for the repair of Tradition Field Sports Complex.

Background

As a result of Tropical Storm Fay, windscreens that were located at the Tradition Field Sports Complex were damaged due to heavy winds and rain.  Project Worksheet (PW) 1882 was prepared for repairs in the amount of $20,096.  During a review of PW 1882, FEMA discovered that the Tradition Field Sports Complex had been granted funding for Hurricanes Frances and Wilma; therefore, the Applicant was required to obtain and maintain appropriate insurance on this facility.  Pursuant to Federal Regulations, when the same facility is damaged by a subsequent event and had an insurance requirement placed on a PW during a previous disaster, FEMA will reduce the eligible costs up to the amount of the of the previous insurance requirement.  If insurance was not obtained and maintained then FEMA will not provide any additional assistance for that facility. 

First Appeal 

In its first appeal dated November 23, 2009, the Applicant requested that FEMA reconsider the de-obligation of $20,096 because the prerequisite insurance obligations had been satisfied and the facility outlined in PW 1882 was not subject to any such pre-existing insurance requirement.  On March 25, 2010, FEMA denied the first appeal stating that the Applicant did not satisfy the requirement to obtain and maintain insurance from a previously declared event.  As stated in FEMA’s Disaster Assistance Fact Sheet, DAP9580.3, Insurance Considerations for Applicants, dated May 29, 2009, “FEMA will not provide assistance for [a] facility in future disasters if the requirement to purchase and maintain insurance is not met.” 

Second Appeal

On August 31, 2010, the Applicant submitted a second appeal reiterating its position from the first appeal that the prerequisite insurance obligations had been satisfied. The Applicant provided no additional information in support of its second appeal.  The Applicant also claims that the facility in PW 1882 was not subject to any pre-existing insurance requirements.  The Applicant also submitted an insurance coverage reasonableness certification letter from the State Insurance Commissioner.  The letter relates to the facilities covered under the State of Florida’s Property Insurance Policy, and does not apply to the Applicant’s facility. 

Discussion

FEMA is precluded from providing funds for an insurance deductible when funding has been provided for deductible and facility in previous declared events.  Section 311 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act requires applicants, as a condition of receiving assistance, to obtain and maintain such types and extent of insurance as may be reasonably available, adequate and necessary to protect against future loss.  In addition, 44 CFR §206.253(f), Insurance requirements for facilities damaged by disasters other than flood, states that when the same facility is damaged by a subsequent event and had a insurance requirement from a previous disaster, FEMA will reduce the eligible costs up to the amount of the previous insurance requirement.  The Applicant failed to obtain and maintain the required insurance coverage.  Therefore, the facility in question is not eligible to receive assistance for the work described in PW 1882.      

Conclusion

I have reviewed all of the information submitted with the appeal and determined that the first appeal decision was consistent with program statute and regulations.  Accordingly, I am denying this appeal. 

Please inform the Applicant of my decision.  This determination constitutes the final decision on this matter pursuant to 44 CFR §206.206, Appeals.
Sincerely,

/s/

Deborah Ingram
Assistant Administrator
Recovery Directorate
 cc:  Major P. May

       Regional Administrator
       FEMA Region IV