A latest court docket 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 isn’t just a couple of technical authorized loss. It’s a couple of household attempting to get better from flood injury to their residence 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 might 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 the NFIP and administered by a non-public insurer appearing as a federal agent. When the Subletts’ residence in Kentucky was flooded on July 28, 2022, they promptly reported their loss. An unbiased adjuster inspected the property and decided there was no injury to the primary residing space, solely to the basement. The flood adjuster ready a Proof of Loss (POL) for $6,189.05 and instructed that if the house owner disagreed with the estimate, she may 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. Ultimately, on September 21, inside the 60-day deadline to submit a federal proof of loss, she signed the adjuster’s POL, nonetheless not sure whether or not it coated all of the injury.
This determination proved to be pivotal. Below 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 say greater than what the insurer gives. Until FEMA permits for an extension, the legislation doesn’t permit for flexibility or leniency on this level. When, almost a yr later, the policyholder submitted a supplemental injury estimate for greater than $53,000 as a part of her lawsuit, the court docket dominated that the declare was barred as a result of the brand new estimate was by no means submitted as a compliant POL. The court docket 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 chance of estoppel primarily based on deceptive steerage from an insurance coverage consultant. The one occasion 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 Fee with Type 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 severe obstacles due to the content material of her personal engineering report. The house owner employed Yeiser Structural to guage potential structural injury. Whereas the report famous cracking finishes and sloping flooring, it didn’t causally hyperlink these points on to the flood. As an alternative, 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 court docket, that made all of the distinction. NFIP insurance policies cowl solely direct bodily loss attributable to flooding. Harm attributed to basic put on, poor upkeep, or unrelated moisture issues will not be coated. As a result of the report by no means definitively tied the structural points to the July 28 flood, it failed to offer the required proof of causation to assist the declare, even when a correct POL had been filed.
One other key factor of the case and lesson for policyholders struggling flood injury was the function of authorized counsel. The plaintiff’s lawyer argued the case as if it have been ruled by Kentucky legislation, citing state statutes on unfair claims practices, emotional misery, and basic 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 underneath these federally backed insurance policies. The court docket in Sublett identified that the plaintiff’s filings have been largely devoid of authorized citations to the proper physique of legislation and expressed concern that the lawyer appeared unaware of the unique utility of federal legislation in NFIP disputes.
This isn’t to criticize the lawyer personally, however slightly to focus on a really actual drawback within the authorized neighborhood. NFIP circumstances aren’t like different insurance coverage disputes. They require a unique set of expertise, data, and a spotlight to element. The foundations 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 area should both already possess or rapidly perceive how the NFIP works. Failing to take action does a disservice to the purchasers they signify, who could unknowingly lose their capacity to get better 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 have 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 gives. If you happen to’re not sure of the extent of your injury, you have to nonetheless submit your personal 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 lawyer 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 priceless case offering priceless 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 forestall restoration. It reminds all of us, policyholders, public adjusters, attorneys, estimators, and engineers, that when coping with federally funded insurance coverage packages, there is no such thing as a substitute for precision and skilled professionalism. In the end, the easiest way professionals will help these policyholders we serve is to make sure they by no means need to study these classes the laborious manner. Policyholders ought to all the time take into account hiring skilled professionals for his or her flood claims.
For readers wanting a larger understanding of this subject, I counsel studying Federal Flood Insurance coverage: Strict Compliance with Proof of Loss Necessities is Important, and Nationwide Flood Claims Have a One-Yr 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. Might 21, 2025).
