Citation:       FEMA-1800-DR-IL, Catholic Bishop of Chicago, Eighteen Project Worksheets

Cross
Reference:    Insurance, Duplication of Benefits
           
Summary:     On September 13, 2008, a severe storm caused 8-10 inches of rain in Cook County, Illinois, damaging 18 schools that the Applicant owns, totaling $545,082.  The damage included damage to roofs and interiors of the school buildings.  FEMA prepared PWs for each of the buildings to document the work as ineligible because it determined that the Applicant had anticipated insurance proceeds.  The Applicant carries two commercial insurance policies, but maintains a Self-Insured Retention (SIR) for damage under $1,000,000 per occurrence.  Pursuant to its insurance policies, the Applicant is responsible for damages under this threshold, and the commercial coverage is not triggered until the damage exceeds $1,000,000.  The Applicant submitted its first appeal on July 27, 2009, requesting $545,082 and arguing that its SIR is not insurance but is instead only the Applicant’s own money.  FEMA denied the appeal on November 18, 2009, again stating that the SIR constituted a duplication of benefits.  In its second appeal, submitted January 22, 2010, the Applicant reiterated its request and argument from the first appeal.  The Applicant’s SIR is not a duplication of benefits because it is not insurance or money available from another source.  The SIR is an amount of risk retained by the Applicant under which the Applicant alone is responsible for payment of claims or damages because its primary insurance is not triggered under the $1,000,000 threshold. 

Issues:      1.  Is the Applicant’s Self-Insured Retention a duplication of benefits?
                  2.  Must the Applicant comply with the insurance requirements of 44 CFR §206.252(d), though it has two commercial insurance policies?

Findings:    1.  No. The Applicant pays for damages occurring within the SIR amount.
                    2.  Yes.  To be eligible for Public Assistance funding, the Applicant must comply with 44 CFR §206.252(d) because its insurance policies do not apply to damage under $1,000,000, which is the responsibility of the Applicant.

Rationale:   Section 312 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, and 44 CFR §206.252(d).