When dealing with Nationwide Flood Insurance coverage Program (NFIP) claims, public adjusters and policyholders should be alert to crucial warning indicators. One of the vital phrases to acknowledge is: “We denied a portion of your declare.” These few phrases, even when buried in a prolonged letter, ought to ring loud alarm bells. Beneath NFIP guidelines, a partial denial — no matter whether or not a proper, compliant proof of loss has been filed — begins the statute of limitations time clock ticking for submitting a lawsuit. If go well with isn’t filed inside one 12 months of that denial, the declare is ceaselessly barred. I’ve warned about this beforehand in All Nationwide Flood Insurance coverage Letters Are Vital—Technical Denials of Solely a A part of a Declare Begin the One-Yr Time to File Go well with.
This difficult lesson was bolstered within the current case of Martini v. American Bankers Insurance coverage Firm of Florida. 1 After Hurricane Ian prompted extreme flood injury to their house, the policyholders submitted a declare. The insurer’s November 16, 2022, letter notified them that sure damages weren’t lined underneath their Customary Flood Insurance coverage Coverage as a result of the broken property was situated beneath the elevated flooring, which restricted protection underneath NFIP guidelines. The letter clearly acknowledged, “We denied a portion of your declare.” Though the letter additionally inspired the insureds to hunt supplemental funds in the event that they discovered extra injury, the courtroom discovered that this preliminary partial denial was sufficient to begin the one-year clock for submitting a lawsuit.
The policyholders and their attorneys tried to argue that later exercise — akin to submitting a further proof of loss and receiving one other denial — reset the clock. The courtroom rejected that argument, mentioning that the legislation and the NFIP coverage phrases are clear: as soon as any portion of the declare is denied, the time restrict begins. No supplemental proofs of loss, negotiations, or appeals can lengthen or toll that one-year interval.
Including insult to harm, the unique proof of loss filed by the general public adjuster on this case was deeply flawed. As a substitute of utilizing FEMA’s official NFIP Proof of Loss type, the adjuster ready a non-compliant doc. Courts and insurers deal with these improperly filed proofs of loss as invalid. A compliant proof of loss is greater than only a piece of paperwork — it’s a necessary situation for fee underneath the NFIP. Failure to make use of the correct type, sworn and signed with the required documentation, can doom even a wonderfully reliable declare.
It needs to be famous that the general public adjuster later filed a proof of lack of a FEMA-required type. However that act didn’t reset the time for submitting a lawsuit.
This case ought to function a warning. When a denial letter states {that a} portion of the declare has been denied, the insured and their representatives should instantly acknowledge the authorized penalties. Whether or not or not a legitimate proof of loss has been submitted and whether or not or not additional discussions or dietary supplements are pending, the one-year statute of limitations has begun. Public adjusters should even be meticulous in getting ready proofs of loss, guaranteeing they use FEMA’s required varieties and comply strictly with NFIP pointers. They need to alert their consumer of the statute of limitations and the necessity to rent counsel about this deadline. Failure to take action might be grounds for a malpractice declare towards the general public adjuster.
Failing to know or heed these necessities might be deadly to a flood insurance coverage declare. In flood litigation, there are not any second possibilities with regards to lacking the statute of limitations or submitting a faulty proof of loss. In each flood case, make sure a compliant and well timed filed proof of loss is accomplished. Then, watch the one-year statute of limitations time. These are two of essentially the most prolific points the place Nationwide Flood claims are misplaced earlier than the battle begins.
Thought For The Day flood
“Time is extra priceless than cash. You will get extra money, however you can not get extra time.”
—Jim Rohn
1 Martini v. American Bankers Ins. Co. of Florida, No. 2:24-cv-904 (M.D. Fla. Apr. 4, 2025).
