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NEW FLOOD INSURANCE DEADLINE WILL HELP SANDY SURVIVORS IN NEW JERSEY AND NEW YORK – BUT FOR HOW LONG?

NEW FLOOD INSURANCE DEADLINE WILL HELP SANDY SURVIVORS IN NEW JERSEY AND NEW YORK – BUT FOR HOW LONG?

The good news: On October 1, 2013, FEMA announced that Superstorm Sandy survivors in New Jersey and New York will have six more months to file critical paperwork for their flood insurance settlements.  FEMA announced that it has extended the deadline for filing Proof of Loss claims for a second time; the new deadline is now April 28, 2014.  The bad news: FEMA has not announced whether they will extend the statute of limitations for property owners wishing to file a lawsuit on denied flood insurance claims.

The Standard Flood Insurance Policy (SFIP) typically allows homeowners 60 days from the date of loss to file Proof of Loss claims. On November 9, 2012, the Federal Emergency Management Agency first extended the filing deadline for Sandy flood claims to one year from the date of loss. A Proof of Loss is a form used by the policyholder to support the amount they are claiming under their policy, which must then be signed and sworn to, and submitted with supporting documentation. The policy covers structures and any personal property contained within that was damaged or destroyed by floodwaters. The extension granted by FEMA on October 1 will give policyholders more time to gather the necessary paperwork, fully document their losses and account for any additional expenses that were discovered after repairs or rebuilding projects began.  The extension, however, will not extend the relevant statute of limitations (the amount of time a person has to file a lawsuit), which could be as soon as December 2013 for some policyholders.

According to the SFIP policy, an insured has one year from the date of a denial of all or any part of their claim to initiate a lawsuit seeking additional amounts under their SFIP.  While any amounts claimed and at issue in a lawsuit must be supported by a timely and complete Proof of Loss meeting the requirements of General Condition (J) of all forms of the SFIP, it is FEMA’s position that the extension of the deadline to submit a Proof of Loss does not alter the one year deadline from a denial for initiating a lawsuit.  Further, it is FEMA’s position that the one year statute of limitations period begins from the date of the letter that first denies coverage, whether the denial is based upon an adjuster’s report or a Proof of Loss (an interpretation of the policy that we strongly oppose and has been determined not to apply by certain Federal judges).  Based on this logic, some insured’s statute of limitations could be as early as December 2013.

In order to extend the Proof of Loss deadline, nearly two dozen Senators and members of Congress from New York and New Jersey signed a letter to FEMA Administrator Craig Fugate, arguing that many of their constituents have been mired in bureaucratic red tape and are only just starting the recovery process and need more time to complete the paperwork.  Let’s hope the statute of limitations deadline, which is quickly approaching for many, can garner the same support.

About the Author: Christopher W. Gerold is an attorney in Wolff & Samson’s Disaster Recovery Claims Group. Chris represents homeowners, condominium associations and businesses with their Sandy related insurance claims with a special focus on flood insurance. For more information on flood insurance and ways Wolff & Samson can help you with your flood insurance claim, please contact Chris at (973) 530-2061.