When dealing with Nationwide Flood Insurance coverage Program (NFIP) claims, public adjusters and policyholders have to be alert to vital warning indicators. One of the vital 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 swimsuit isn’t filed inside one 12 months of that denial, the declare is eternally barred. I’ve warned about this beforehand in All Nationwide Flood Insurance coverage Letters Are Necessary—Technical Denials of Solely a A part of a Declare Begin the One-12 months Time to File Go well with.
This difficult lesson was bolstered within the latest case of Martini v. American Bankers Insurance coverage Firm of Florida. 1 After Hurricane Ian triggered extreme flood harm to their residence, the policyholders submitted a declare. The insurer’s November 16, 2022, letter notified them that sure damages weren’t coated below their Customary Flood Insurance coverage Coverage as a result of the broken property was situated beneath the elevated ground, which restricted protection below 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 further harm, the court docket 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 — resembling submitting an extra proof of loss and receiving one other denial — reset the clock. The court docket rejected that argument, declaring 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 prolong 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 an alternative of utilizing FEMA’s official NFIP Proof of Loss kind, 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 obligatory situation for fee below the NFIP. Failure to make use of the correct kind, sworn and signed with the required documentation, can doom even a wonderfully legit declare.
It needs to be famous that the general public adjuster later filed a proof of lack of a FEMA-required kind. 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 sound 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 making ready proofs of loss, guaranteeing they use FEMA’s required types and comply strictly with NFIP tips. They need to alert their shopper of the statute of limitations and the necessity to rent counsel about this deadline. Failure to take action could possibly be grounds for a malpractice declare towards the general public adjuster.
Failing to grasp or heed these necessities may be deadly to a flood insurance coverage declare. In flood litigation, there aren’t any second possibilities on the subject of 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 struggle begins.
Thought For The Day flood
“Time is extra invaluable than cash. You will get extra money, however you can’t 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).