Policyholders and public adjusters must 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 difficult. 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.
A latest Fifth Circuit Courtroom of Appeals resolution highlights the important significance of strictly adhering to those deadlines when coping with flood insurance coverage claims underneath the Nationwide Flood Insurance coverage Program (NFIP). In Mt. Nice Properties, LLC v. Wright Nationwide Flood Insurance coverage Firm, each the district courtroom and appeals courtroom enforced a one-year statute of limitations to bar the policyholder’s lawsuit regardless of allegations of complicated communications from the insurer.
Mt. Nice Properties held a Customary Flood Insurance coverage Coverage (SFIP) with Wright Nationwide when Hurricane Zeta struck Mississippi in October 2020. After Mt. Nice submitted a declare for flood harm, Wright despatched three key letters. In a January 11, 2021 letter, Wright acknowledged that it had not acquired a proof of loss and gave Mt. Nice 10 days to reply. On February 15, 2021, Wright acknowledged receipt of the proof of loss however mentioned it couldn’t be accepted as submitted. On February 23, 2021, it despatched a letter citing lack of a correctly executed proof of loss. The February 23 denial letter knowledgeable Mt. Nice that it had one yr to file go well with. Subsequently, Wright re-opened the declare and settlement discussions ensued. When these discussions broke down, Mt. Nice filed its lawsuit on April 4, 2023, two years after the denial of claims letter.
The federal district courtroom granted Wright’s movement to dismiss the lawsuit, discovering that the February 23, 2021, letter clearly triggered the one-year statute of limitations underneath 42 U.S.C. § 4072.1 The courtroom additionally dominated that any extracontractual claims have been preempted by federal legislation governing the NFIP. The courtroom rejected Mt. Nice’s arguments that Wright’s communications and subsequent discussions have been complicated because the declare was reopened, emphasizing that SFIP phrases should be “strictly construed and enforced” even when harsh outcomes comply with.
The Fifth Circuit affirmed the dismissal, discovering no error within the district courtroom’s evaluation.2 The important thing factors of this ruling have been the identical as these of the district courtroom. The appeals courtroom reiterated that each SFIP lawsuit should be filed throughout the one-year limitations interval from the date of a partial denial. Subsequent discussions or actions don’t change the date or impact of that preliminary partial or full denial.
Classes for Policyholders and Public Adjusters:
- Adhere strictly to deadlines: The one-year statute of limitations for SFIP lawsuits is rigidly enforced. Don’t delay submitting go well with if a declare is denied.
- Doc all communications: Preserve meticulous information of all correspondence together with your flood insurer.
- Reply promptly: Even when communications appear complicated, at all times reply rapidly to insurer requests for info or documentation.
- Search competent authorized counsel early: Given the complexity of NFIP guidelines, seek the advice of an skilled flood insurance coverage lawyer as quickly as points come up with a declare.
- No extracontractual claims: Courts typically view extracontractual claims as preempted in NFIP circumstances. Concentrate on policy-based arguments for fee.
- Don’t depend on equitable arguments: Courts are unlikely to bend NFIP guidelines based mostly on equity issues. Strict compliance is vital.
This latest Mt. Nice case serves as a stark reminder that flood insurance coverage underneath the NFIP operates underneath distinctive guidelines. Policyholders and public adjusters working for policyholders should be vigilant in defending their rights and following all procedural necessities to the letter.
For instance, I corrected our directions within the webinar, the place it mentioned to “ship” the proof of loss on time. The rule is that the proof of loss should be “acquired” on time by the insurer, not the sector adjuster and even the impartial adjusting agency. I gave a tip that I take advantage of in a single day supply with out the necessity for a signature however with proof of supply from both Federal Specific, UPS, or the submit workplace.
Our agency will maintain future Nationwide Flood webinars for public adjusters engaged on these very technical claims. Please use this weblog to analysis the right way to correctly full and ship a federal flood proof of loss when you missed the webinar.
Within the meantime, I might ask all to learn Modernizing the Nationwide Flood Insurance coverage Program: A Name for Increased Protection Limits and take some motion by following the instructions within the weblog and asking your congressional consultant for increased protection limits. If sufficient of us do that and make others conscious of the problem, possibly individuals with essentially the most catastrophic flood claims will lastly be capable to rebuild their houses and companies when the subsequent flood catastrophe strikes.
Thought For The Day
The distinction between a profitable area mission and a catastrophe usually comes right down to a decimal level. That’s why precision isn’t simply vital, it’s the whole lot.
—Gene Kranz, NASA flight director
1 Mt. Nice Properties v. Wright Nationwide Flood Ins. Co., No. 1:23-cv-88, 2024 WL 1616369 (S.D. Miss. Mar. 21, 2024).
2 Mt. Nice Properties v. Wright Nationwide Flood Ins. Co., No. 24-60170, 2024 WL 4502109 (fifth Cir. Oct. 16, 2024).
