Proofs of Loss and the Standard Flood Policy

(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is the eigth of a twelve part series he is writing on proof of loss).

Normally I have steered away from giving certain answers when it comes to the requirements of submitting a Proof of Loss. Most of the topics I have discussed thus far have a myriad of exceptions which might provide coverage even if the terms of the policy have not been completely complied with. While these possibilities do exist in many homeowners policies, the one place you can count on a mistake serving as a basis for denying your claim is when you are dealing with s National Flood Insurance Policy. The requirements of the Standard Flood Policy are pretty clear and failing to follow them to the letter can be devastating.

First, when dealing with flood claims it is vital to note that you have 60 days to file a Proof of Loss. The Standard Policy states: “Within 60 days after the loss, [the insured must] send [the insurer] a proof of loss, which is [the insured’s] statement as to the amount [he/she] is claiming under the policy signed and sworn to by [the insured] and furnishing” specific information.

Submitting a Proof on even the 61st day will likely result in the claim being completely denied.

Courts in every jurisdiction have upheld specific and complete compliance with these requirements. See Dawkins v. Witt, 318 F.3d 606 (4th Cir.2003); Mancini v. Redland Ins. Co., 248 F.3d 729 (8th Cir.2001); Flick v. Liberty Mut. Fire Ins. Co., 205 F.3d 386 (9th Cir.2000); Gowland v. Aetna, 143 F.3d 951 (5th Cir.1998); Phelps v. Fed. Emergency Mgmt. Agency, 785 F.2d 13 (1st Cir.1986). These courts all concluded that there must be strict compliance with the terms and conditions of Federal Flood Insurance Policies and the failure to file a Proof of Loss prohibits a plaintiff from recovery.

Similarly, as I discussed the last few weeks, there is sometimes an argument that compliance with a Proof of Loss requirement was excused because an insurer has waived its right to a Proof based on the insurer’s actions or statements. With flood claims, you can be assured that this argument will fail.

As the policy states, the requirement of a Proof of Loss can only be waived by written authorization from FEMA. Therefore, no matter what the adjuster or Write Your Own Carrier says or does, a Proof still must be submitted for recovery to be possible.

In one of the cases mentioned above, it was undisputed that the Write Your Own Carrier had stated that the 60 day requirement would not be enforced and that the insured had relied on these representations in failing to file the Proof. The court, however, refused to find that strict compliance with the Proof of Loss provisions had been waived because there was no written waiver from the Federal Insurance Administrator. Dawkins at 610-611.

Furthermore, in one unreported Florida case, the 11th Circuit found that the insured was not excused from submitting a Proof of Loss within 60 days despite the fact that the insurer did not send an adjuster to the insured property until 90 days after the damage occurred. With a regular homeowners policy, there might be an argument that the actions of the insurer (not sending an adjuster to investigate the loss until after the period of time for submitting a Proof had expired) constituted an implied waiver of the policy provisions. Because it was a flood claim, however, the court refused to follow this line of reasoning and denied coverage for the loss. Lucien v. U.S. Sec. Ins. Corp., 143 Fed. Appx. 152 (11th Cir. 2005).

While I have mostly covered what happens if a Proof of Loss is not submitted in this post, it is important to note that even a small deviation from the flood policy requirements can result in the claim being denied. If a Proof is filed without being signed or notarized, or is submitted without the required supporting documentation, it is likely that the claim will be denied if the 60 day timeframe expires.

Everyone has heard the saying that the only two things certain in life are death and taxes, however if you fail to comply with the Proof of Loss provisions of the Standard Flood Policy you can likely add a claim denial to this list.