The title of this publish is just not right. However it’s safer than saying the proper rule of legislation. A current order dismissing a case involving a declare introduced underneath the Nationwide Flood Insurance coverage Program (NFIP) for failing to convey go well with inside the one-year limitations time reveals why my sensible rule could also be higher than the extra liberal and proper rule of legislation. 1
Like so many policyholders and public adjusters, the policyholders within the case understandably needed to keep away from litigation. They engaged in months of debate with NFIP adjusters and even filed an administrative attraction concerning their declare. Nevertheless, doing all these actions to keep away from a lawsuit could lead to being unable to convey a lawsuit.
The rule of legislation concerning the deadline to file a lawsuit for an NFIP declare was acknowledged by the court docket as follows:
When Congress created the NFIP, it gave policyholders a restricted personal proper of motion to problem the denial of a declare in federal court docket. 42 U.S.C. § 4072. Each SFIP specifies that ‘[i]f you do sue, you should begin the go well with inside 1 yr after the date of the written denial of all or a part of the declare, and you should file the go well with in the US District Court docket of the district during which the insured property was situated on the time of the loss.’ 44 C.F.R. pt. 61, app. A(1), artwork VII(O) (emphasis added). The Nationwide Flood Insurance coverage Act equally requires that lawsuits towards FEMA directors be filed ‘inside one yr after the date of mailing of discover of disallowance or partial disallowance by the Administrator.’ 42 U.S.C. § 4072.
The “partial disallowance” is what causes so many to blow the statute of limitations and trigger me to say it’s safer to put in writing down one yr from the date of loss. The issue is that there’s not a sure date, and due to that, claimants don’t imagine a partial denial has occurred or overlook {that a} “partial denial” has technically occurred. For public adjusters, it’s a lot simpler to put in your declare software program (I endorse Claims Wizard software program as a result of it’s the greatest and has a really cool identify I can relate to) that the statute of limitations is one yr from the date of loss. You possibly can by no means go unsuitable for those who do.
That is what the court docket famous about figuring out whether or not a partial denial has been made:
To find out whether or not a letter is a partial written denial, courts carefully study the letter’s content material. See, e.g., Brusco, 2014 WL 2916716, at *6 (discovering {that a} letter ‘denying all non-covered objects situated within the basement,’ and referring to the letter as a ‘determination to disclaim your declare,’ constituted a partial written denial, regardless of its enclosed partial fee); Cohen v. Allstate Ins. Co., No. H-17-2484, 2018 WL 1144761 (S.D. Tex. Mar. 2, 2018) (discovering {that a} letter ‘deny[ing] protection for numerous objects that you’re claiming pending documentation of alternative,’ and informing plaintiff of their proper to attraction ‘inside 60 days of this denial letter,’ was an categorical denial), aff’d 924 F.3d 776 (fifth Cir. 2019); McInnis v. Liberty Mutual Fireplace Ins. Co., No. 22-30022, 2022 WL 4594609 (fifth Cir. 2022) (discovering {that a} letter informing plaintiff that sure objects ‘weren’t capable of be included in your declare,’ that defendant was ‘deny[ing] protection’ for these objects, and that plaintiff had a proper to attraction, was a partial denial).
Even when the adjusters proceed to have interaction in dialogue and even pay extra on the declare, it doesn’t lengthen the timeframe from the partial denial:
The truth that the Palmers continued to ‘present[ ] any and all requested paperwork’ to Selective after receiving the 2021 letter doesn’t alter our conclusion. See Lionheart Holding GRP v. Phila Contribution Ship Ins. Co., 368 F. App’x 282, 284-85 (3d Cir. 2010) (holding {that a} June 2005 partial denial letter triggered the statute of limitations though the events continued to have interaction in a ‘prolonged … investigation and adjustment course of’ for claims associated to the identical flooding occasion); Malik, 2024 WL 1635687 (discovering {that a} November 2021 letter constituted a partial denial, and ‘Plaintiff’s argument {that a} subsequent denial of Plaintiff’s declare begins the tolling of the statute of limitations is unavailing.’); Cohen v. Allstate Ins. Co., 924 F.3d 776, 782 (fifth Cir. 2019) (‘That Allstate continued to course of Cohen’s declare doesn’t change this conclusion [that the claim is time-barred].’).
The sensible result’s that even innocuous letters referencing not paying for numerous objects could be argued to be “partial denial” letters. When the preliminary funds are made, the letters usually clarify what is just not being paid for, and people are partial denial letters.
I made this warning to everyone coping with NFIP claims in Nationwide Flood Classes: Strict Enforcement of Deadlines Dooms Policyholder’s Flood Declare—A Reopened Declare Does Not Cease the Ticking Time Bomb:
Policyholders and public adjusters should be conscious that Nationwide Flood Insurance coverage claims are very technical with demanding deadlines that should be met. Whereas talking in a webinar final night time, I stored repeating the mantra—file the proof of loss precisely proper, delivering it on time to the insurer and with all documentation on a stuffed out NFIP kind. Submitting a lawsuit on time if there’s a dispute was additionally mentioned as a result of even that may be tough. For instance, a written letter indicating the declare is reopened doesn’t imply {that a} prior written partial denial is to be ignored when figuring out the one-year limitation to file a federal lawsuit.
My mom usually gave me sage recommendation after observing my nature as a baby: “Chip, why not be protected moderately than sorry?” I feel that’s good recommendation when coping with NFIP deadlines.
Thought For The Day
“An oz. of prevention is price a pound of treatment.”
—Benjamin Franklin
1 Palmer v. Selective Ins. Co., No. 24-1599, 2024 WL 5126265 (E.D. Penn. Dec. 16, 2024).
