Superstorm Sandy: What is the statute of limitations on a flood insurance lawsuit?
As many of you already know, a statute of limitations is the amount of time that a person has to bring a lawsuit. Failure to file a lawsuit within the relevant statute of limitations could mean that the case will be thrown out of court. So the short answer to the question above (according to the policy) is “. . . you must start the suit within 1 year after the date of the written denial of all or part of the claim . . . .” Essentially, it is different for everyone. But the bigger question is – what constitutes a written denial?
Is it the check you received for half of the amount that you were told by the insurance adjuster? Or is it the insurance adjuster’s report that failed to identify damaged items? Or is it a letter from the insurance carrier denying coverage of the foundation after they sent an engineer out to the property? Or is it the denial to the properly submitted Proof of Loss that you spent weeks preparing?
FEMA has the answer, but they aren’t telling anyone.
As I discussed in my prior blog post “New York Senators Demand FEMA Clarify the Lawsuit Deadline,” New York Senators Charles E. Schumer and Kirsten Gillibrand demanded that FEMA clarify its position of what exactly constitutes a written denial in light of the Proof of Loss deadline extension (April 28, 2014). But even a request from two U.S. senators has fallen on FEMA’s deaf ears. After nearly three weeks, FEMA still has not issued a statement or memorandum clarifying its position.
If FEMA’s position is that a suit must be filed within one year from the “first” written denial from the insurer, and interprets that to be based on the insurance adjuster’s report, then within weeks certain Sandy victims with open flood insurance claims may be precluded from bringing a successful lawsuit. If FEMA agrees with Senator Shumer’s proposal to not start the clock on the one-year statute of limitations period to pursue civil action until all administrative appeals have been completed and the homeowner has received a final determination from the insurer, then Sandy victims with open flood claims may have months. As of right now, only FEMA knows.
But this is an area where victims would be wise to err on the side of caution. I know from my own practice and other attorneys in the field, flood insurance lawsuits are being filed. Attorneys are not waiting for FEMA to issue clarification on the relevant statute of limitations. I hope, however, for the thousands that are still fighting with their flood insurance companies, that FEMA makes the right decision and interprets the relevant statute of limitations broadly.
About the Author: Christopher W. Gerold is an attorney in Wolff & Samson’s Disaster Recovery Claims Group. Chris represents homeowners 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.