New Jersey Governor Christopher Christie Requests FEMA Extend the Statute of Limitations
According to the Star Ledger, New Jersey Governor Christopher Christie has asked FEMA to revise the time limit for residents affected by Hurricane Sandy to file lawsuits regarding their flood insurance claims. Although FEMA has extended the deadline for victims of Hurricane Sandy to file Proofs of Loss on flood insurance claims to April 28, 2014, FEMA has not extended the deadline to file a lawsuit for the wrongful denial or underpayment by the flood insurance companies.
Under a National Flood Insurance Program policy, the deadline to file a lawsuit is one year from the date of the denial or partial denial of the claim. In a November 21, 2013 memorandum, FEMA issued its interpretation of the statute of limitations to be one year from the date of the “first” denial or partial denial of the claim. However, FEMA does not address the fact that nowhere in the policy or statute does it state the “first” denial or partial denial. According to the Star Ledger, Governor Christie wrote in a December 26 letter that in order to truly benefit from the additional filing time [for the Proof of Loss], FEMA should ensure that the one-year timeline to file litigation arising from a claim does not begin until the agency denies or disallows a claim “based upon the insured’s fully supported and sworn proof of loss.”
A sworn Proof of Loss with supporting documentation is a prerequisite to a lawsuit. In some circumstances, it is possible that the statute of limitations may be shorter than the time period to file a Proof of Loss. In many Sandy cases, under FEMA’s interpretation of the statute of limitations, the time period to file a lawsuit may have passed.
According to FEMA’s November 21 memorandum, it “lacks the authority to extend the time limit to file a lawsuit established by statute.” However, the real issue is not when the denial was made, but what was denied and what constitutes a “claim.” Pursuant to FEMA’s November 21 memorandum, a claim is made when an insured seeks money under the policy. Under normal circumstances, FEMA requires a Proof of Loss be signed by the insured to process a “claim.” Therefore, it appears that the Governor is only requesting FEMA to interpret the policy and statute consistent with its past practice. FEMA is narrowly interpreting the policy to the detriminent of thousands of New Jersey and New York victims that are continuing to fight with their flood insurance carriers as a result of Hurricane Sandy.
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.