Louisiana Court Upholds Proof Of Loss Requirement Of Standard Flood Insurance Policy


In Villemarette v. FEMA et al., 2014 U.S. Dist. LEXIS 113667 (E.D. La.), the court analyzed whether plaintiffs were entitled to unpaid proceeds of a Standard Flood Insurance Policy (SFIP). Plaintiffs’ policy had coverage limits of $250,000 for dwelling and $99,200 for personal property, both subject to a $1,000 deductible. On August 29, 2012, Hurricane Isaac hit and caused damage to plaintiffs’ home. On September 4, 2012, plaintiffs filed a claim with the defendants to recover for their loss. Defendants sent an independent adjuster to review plaintiffs’ claim. The independent adjuster estimated the building and contents losses at $13,888.51. Plaintiffs did not agree with the estimate and refused to sign the proof of loss.

After Hurricane Isaac, the Federal Insurance Administrator extended the deadline to file a proof of loss to 240 days, giving plaintiffs until April 28, 2013 to file a proof of loss. Plaintiffs received two letters detailing the policy requirements, but still failed to file a proof of loss before the April 28 deadline. On June 11, 2013, defendants sent plaintiffs a letter denying their claim due to plaintiffs’ failure to submit a timely proof of loss as required by the SFIP.

In late June 2013, plaintiffs called defendants regarding re-opening their flood insurance claim, and on July 30, 2013, plaintiffs provided defendants a proof of loss of $13,888.51, the amount the independent adjuster had originally estimated. The cover letter sent by plaintiffs accompanying the proof of loss stated “the estimate to fix my home came in at just under $30,000. I have signed the proof of loss WITH EXCEPTION that the remainder of the damage be covered.”

The independent adjuster then emailed FEMA describing his original assessment and requesting a waiver of the proof of loss deadline to permit payment of the $13,888.51 claim. The FEMA Claims Examiner responded as follows on October 4, 2013: “Based on the information you submitted, your request for a waiver of the 60 day Proof of Loss policy provision is approved. This limited waiver is only for the amount of loss and scope of damages outlined in this request and otherwise does not waive the proof of loss or any other requirement of the Standard Flood Insurance Policy and makes no other comment because of lack of information.” FEMA then issued checks to the plaintiffs for $13,888.51.

In this lawsuit, plaintiffs sought additional funds under the SFIP to repair their property. FEMA, however, filed a motion for summary judgment arguing that it was not responsible for any additional amounts under the SFIP. Plaintiffs, in their response, did not dispute that they failed to file a proof of loss prior to the April 28, 2013 deadline. Rather, they argued that FEMA waived the proof of loss requirements when it issued the above-referenced waiver of the proof of loss requirement and check in the amount of the original assessment.

The court struck down this argument, stating that the waiver by FEMA explicitly was limited to the amount requested by the independent adjuster. The court found that plaintiffs did not file a timely proof of loss for the additional amounts, as was required under the SFIP, since a participant must show compliance with all policy requirements prior to seeking further benefits under the SFIP. Thus, summary judgment was granted in favor of FEMA.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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