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THE BRIDGEWATER-SOMERVILLE CONNECTION
DECEMBER 2013
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BEWARE THE PITFALLS OF FLOOD INSURANCE
By: Lisa M. Fittipaldi, Esq.,
DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum, P.C.
The insured victims of Sandy’s flood
waters got good news when FEMA
extended the Proof of Loss (POL) filing
deadline until April 28, 2014. This
extension can have a downside. Many
who have unresolved claims will see
this as an opportunity to continue to
negotiate with insurance carriers on
their own or through a public adjuster.
History shows that once a carrier has
investigated and paid what it believes
to be the correct amount of damages,
it is not likely to pay any additional
monies. FEMA is reporting that most
carriers consider more than 95 percent
of their claims to be closed. While the
carriers may characterize the claims as
closed, this does not mean the insured
does not have options.
One hidden trap relates to the statute
of limitations or the date by which you,
the insured, must file a lawsuit to pro-
tect your claim. The language of the
policy requires that suit be brought
within one year of the date of the writ-
ten denial of all or part of the claim. In
order to file suit, you must comply with
all requirements of the policy, which
includes filing a POL. If the carrier
denied all or part of your claim, FEMA
contends the statute of limitations
began to run from the date of denial. It
is possible for your case to be barred
before the new deadline for the POL to
be filed.
Insurance carriers follow unwritten
rules in handling flood claims. The
head of claims for two large flood car-
riers have confirmed this statement
during depositions. There are no writ-
ten instructions in the National Flood
Insurance Program (NFIP) documents,
including your policy and the NFIP
handbook, to explain the correct way
to complete the POL. Myriad pitfalls
could lead to your claim being rejected.
As a part of your duty as an insured,
you must file a sworn POL with docu-
mentation listed in the policy. One of
the requirements is “Specifications of
damaged buildings and detailed repair
estimates.” There is no document that
we have been able to find that explains
what constitutes “specifications” or
“
detailed repair estimates.” At least
one claims manager indicated her
company follows no discernible stan-
dard; it is simply a matter of “judg-
ment.” This too could lead to your
claim being rejected.
At least one major flood carrier will
reject a claim, without explanation, if
an insured includes even one item that
is not covered by flood insurance in the
POL and supporting documentation.
As an insured, you need to hire an
attorney who is knowledgeable in
flood law before it is too late.
Lisa M. Fittipaldi is a partner of the law
firm DiFrancesco, Bateman, Coley,
Yospin, Kunzman, Davis, Lehrer &
Flaum, P.C. 15 Mountain Boulevard,
Warren, NJ 07059 908-757-7800 x224.
www.theconnectionsnj.com