A current courtroom determination in Sublett v. Westfield Insurance coverage Firm 1 reveals how even well-intentioned policyholders can lose a flood insurance coverage declare earlier than their lawsuit ever begins. This case is not only a few technical authorized loss. It’s a few household making an attempt to recuperate from flood injury to their house and discovering themselves out of choices, not as a result of they didn’t expertise actual hurt, however due to a collection of procedural and strategic missteps which can be sadly all too widespread in flood insurance coverage disputes. For insurance coverage declare professionals, public adjusters, and attorneys, the Sublett case reveals the crucial significance of understanding the distinctive authorized panorama of the Nationwide Flood Insurance coverage Program (NFIP) and following its guidelines with precision.
On the coronary heart of the case was a Commonplace Flood Insurance coverage Coverage (SFIP) issued by way of the NFIP and administered by a non-public insurer appearing as a federal agent. When the Subletts’ house in Kentucky was flooded on July 28, 2022, they promptly reported their loss. An impartial adjuster inspected the property and decided there was no injury to the primary dwelling space, solely to the basement. The flood adjuster ready a Proof of Loss (POL) for $6,189.05 and instructed that if the home-owner disagreed with the estimate, she might submit her personal POL for the next quantity, supported by documentation. The policyholder hesitated to signal this preliminary POL, believing there may be structural injury the adjuster had not recognized. Finally, on September 21, throughout the 60-day deadline to submit a federal proof of loss, she signed the adjuster’s POL, nonetheless uncertain whether or not it coated all of the injury.
This determination proved to be pivotal. Underneath the SFIP, a policyholder should submit a signed, sworn, and itemized POL inside 60 days of the loss in the event that they intend to assert greater than what the insurer provides. Except FEMA permits for an extension, the legislation doesn’t enable for flexibility or leniency on this level. When, practically a yr later, the policyholder submitted a supplemental injury estimate for greater than $53,000 as a part of her lawsuit, the courtroom dominated that the declare was barred as a result of the brand new estimate was by no means submitted as a compliant POL. The courtroom emphasised that the NFIP’s proof of loss necessities are to be strictly enforced. There is no such thing as a allowance for substantial compliance, no room for waiver by the insurer or its adjuster, and no risk of estoppel primarily based on deceptive steering from an insurance coverage consultant. The one get together that may waive the 60-day POL requirement is the Federal Insurance coverage Administrator, and there was no proof that such a waiver was requested or granted on this case.
I’ve mentioned why the Nationwide Flood Insurance coverage Program wants reform concerning these overly restrictive proof of loss necessities in NFIP Escapes Cost with Kind Over Substance Guidelines: The Want for Reform of the Nationwide Flood Insurance coverage Program.
What makes the Sublett determination much more instructive is that even when a correct POL had been submitted on time, the policyholder nonetheless confronted critical obstacles due to the content material of her personal engineering report. The home-owner employed Yeiser Structural to guage potential structural injury. Whereas the report famous cracking finishes and sloping flooring, it did not causally hyperlink these points on to the flood. As a substitute, the engineer attributed the issues to long-term deterioration, moisture, and growing old. He didn’t relate the injury to the precise flood occasion. Within the eyes of the courtroom, that made all of the distinction. NFIP insurance policies cowl solely direct bodily loss attributable to flooding. Injury attributed to normal put on, poor upkeep, or unrelated moisture issues shouldn’t be coated. As a result of the report by no means definitively tied the structural points to the July 28 flood, it failed to supply the required proof of causation to help the declare, even when a correct POL had been filed.
One other key component of the case and lesson for policyholders struggling flood injury was the function of authorized counsel. The plaintiff’s legal professional argued the case as if it had been ruled by Kentucky legislation, citing state statutes on unfair claims practices, emotional misery, and normal rules of fine religion and truthful dealing. Nevertheless, NFIP insurance policies are creatures of federal legislation. The Nationwide Flood Insurance coverage Act governs this system, and courts throughout the nation have clarified that state legislation has no place in resolving disputes below these federally backed insurance policies. The courtroom in Sublett identified that the plaintiff’s filings had been largely devoid of authorized citations to the proper physique of legislation and expressed concern that the legal professional appeared unaware of the unique utility of federal legislation in NFIP disputes.
This isn’t to criticize the legal professional personally, however quite to spotlight a really actual downside within the authorized neighborhood. NFIP instances usually are not like different insurance coverage disputes. They require a distinct set of expertise, data, and a focus to element. The principles are inflexible, the timeframes unforgiving, and the doctrines of waiver, estoppel, and substantial compliance—widespread lifelines in state legislation insurance coverage litigation—are nonexistent. Attorneys who enterprise into this enviornment should both already possess or rapidly perceive how the NFIP works. Failing to take action does a disservice to the shoppers they symbolize, who could unknowingly lose their capacity to recuperate what they imagine is rightfully theirs.
For policyholders, the takeaways from this case are clear. First, when a flood damages your property and also you carry an SFIP, you will need to act rapidly and observe FEMA’s guidelines precisely. That features submitting a signed and sworn Proof of Loss inside 60 days of the occasion for the total quantity of your declare, not simply the quantity the insurer provides. In the event you’re uncertain of the extent of your injury, you will need to nonetheless submit your individual estimate and documentation. Counting on what a FEMA adjuster tells you or assuming the method is versatile will solely set you up for disappointment.
Second, rent technical and authorized professionals who perceive flood claims. Your engineer should be able to clearly attributing injury to the flood occasion, not simply describing signs or attainable causes. Your legal professional should perceive the distinctive physique of federal legislation that governs flood insurance coverage claims, or not less than be keen to analysis it intimately earlier than submitting go well with.
The Sublett case is one other precious case offering precious insights for everybody concerned with flood claims. It reveals that even when injury is actual, and the necessity for restoration is urgent, failing to observe the strict guidelines laid out by the NFIP will stop restoration. It reminds all of us, policyholders, public adjusters, attorneys, estimators, and engineers, that when coping with federally funded insurance coverage packages, there isn’t any substitute for precision and skilled professionalism. Finally, the easiest way professionals can assist these policyholders we serve is to make sure they by no means should study these classes the arduous method. Policyholders ought to all the time take into account hiring skilled professionals for his or her flood claims.
For readers wanting a higher understanding of this matter, I recommend studying Federal Flood Insurance coverage: Strict Compliance with Proof of Loss Necessities is Important, and Nationwide Flood Claims Have a One-12 months Statute of Limitations.
Thought For The Day
“Flip your wounds into knowledge.”
— Oprah Winfrey
1 Sublett v. Westfield Ins. Co., No. 7:23-cv-65, 2025 WL 1461817 (E.D. Ky. Could 21, 2025).
