The National Flood Insurance Program is a tough federal insurance program. There is a recent case which was thrown out of court because the policyholder tried to do it himself. [1] It is another example that when FEMA officials say the government Is there to help with your flood claim, you will find out differently very quickly if you disagree with them on anything.

The policyholder claimed that he was underpaid by the flood insurance carrier.  This is a fairly common scenario in any claims situation. The problem with the National Flood Insurance Program is that the laws and regulations are all skewed to be anti-citizen and anti-consumer.  There are many hurdles to overcome to prove your case and the deadlines to file the paperwork to preserve your right to challenge the insurance company’s assessment are high and quick.

In this case, the lawsuit was filed in state court rather than federal court and the date was missed to file the suit in federal court.  Dismissing the case, the judge noted the following: [2]


“within one year after the date of mailing by … the participating Write-Your-Own Company … of the notice of disallowance or partial disallowance of the claim may, pursuant to 42 U.S.C. 4072, institute an action on such claim against the insurer only in the U.S. District Court for the district in which the insured property or the major portion thereof shall have been situated.




An SFIP claimant must comply with the terms and conditions mandated by federal law to receive payment under the policy. See Flick v. Liberty Mut. Fire Ins. Co., 205 F.3d 386, 394 (9th Cir. 2000) (“Because flood losses, whether insured by FEMA or by a participating WYO insurer, are paid out of the National Flood Insurance Fund, a claimant under a standard flood insurance policy must comply strictly with the terms and conditions that Congress has established for payment.”): see also Cohen v. Allstate Ins. Co., 924 F.3d 776, 780 (5th Cir. 2019) (“Those seeking public funds are held to a demanding standard and are expected to comply with statutory requirements.”). “


If you have a National Flood Insurance Program policy, my advice is to hire a public adjuster right away to help you. There have been no extensions to file proofs of loss this year. I would suggest that those who are running this program think about stopping regulating by the letter of the law and rather than by the spirit of this insurance program.  The program was designed to help people when they need money and not be an impossible fight. Congress needs to look into this recurrent problem area.

Thought For The Day 

“Culture is more important than rules and regulations.“

Ruth Porat


[1] Jack C. Gunvordahl v. Selective Insurance Company of the Southeast, No. 3:20-CV-03015-RAL, 2020 WL 6914607 (D.S.D. Nov. 24, 2020)

[2] Id. at *3.

Today‘s 2 p.m. EST Livestream features two former insurance company adjusters turned “good guy” policyholder attorneys. Merlin Law Group attorneys Javier Delgado and Etienne Font worked as insurance adjusters in a prior life. Their practical understanding and appreciating what insurance companies and independent adjusters have to do to resolve claims helps in their practice today as policyholder legal advocates. They want to share some of that experience with you.

Javier and Etienne were recently involved in a large and hotly contested hurricane claim which was resolved during an arbitration hearing. Arbitration is not appraisal. Claims headed to arbitration versus appraisal should be handled in a slightly different manner. They will discuss many of those differences.

Did you know that earthquakes happen in Oklahoma? They were also involved in and worked with Merlin Law Group Oklahoma City-based attorney Drew Houghton on an earthquake case which resolved following mediation. Earthquake claims are unique and happen all over the United States. Understanding those nuances is the second major topic of their Tuesday at 2 presentation. Hope you can join us!

Here is a link for today’s livestream.

Initially, it is beneficial to define just what exactly is meant by the phrase “regulatory estoppel” in the context of insurance policies. This theory is a form of equitable estoppel whereby insurers are prevented, or “stopped,” from asserting an interpretation of an insurance policy provision that is contrary to the insurer’s explanation of that provision to state insurance regulators when the insurer originally sought approval of the policy form from the state department of insurance. In layman’s terms, the insurance company is prevented from arguing that a specific policy provision has a different meaning than the meaning originally presented to an insurance agency or during a judicial proceeding.

The theory was first adopted (or successfully plead) in New Jersey in Morton International v. General Accident Ins. Co., 134 N.J. 1, 629 A.2d 831 (1993), but has consistently received negative treatment in most jurisdictions following that decision. In New York, for example:

“[T]he theory [of regulatory estoppel] … has received almost universal disapproval. It has been consistently rejected by federal and state authorities across the country and has never been adopted by any New York court. Indeed, at least two New York courts have flatly rejected the theory … I am aware of only one New York court that has suggested that the doctrine might be viable. But in that case, construing a different policy provision, the court held that there were no unequivocal representations about the meaning of the provision to warrant application of the theory.”[1]

As this case illustrates, however, there is precedent in New York potentially supporting a viable application of regulatory estoppel against insurance companies on behalf of policyholders. In Tozzi v Long Is. R. Co., the court provided a guide to successfully pleading this potential theory. In justifying the theory, the court stated as follows:

“Judicial estoppel, or the doctrine of inconsistent positions, precludes a party who assumed a certain position in a prior legal proceeding and who secured a judgment in his or her favor from assuming a contrary position in another action simply because his or her interests have changed (Citation omitted); The doctrine is invoked to estop parties from adopting such contrary positions because the judicial system ‘cannot tolerate this “playing ‘fast and loose with the courts’ ”  (Citation omitted). The purpose of the application of the doctrine of judicial estoppel is to preserve the integrity of judicial proceedings by prohibiting the successive assertion of factually contradictory statements as the truth.[2]

Accordingly, the court in Tozzi held that in an appropriate case 1) a litigant may utilize the doctrine of estoppel to prove that an insurer should be estopped from enforcing a clear and unambiguous agreement according to its terms on the ground that in a prior proceeding the insurer obtained a judgment by means of an unequivocal assertion of a contrary interpretation of a contractual term in said agreement, and 2) that the invocation of judicial estoppel may create insurance coverage.[3]

Although regulatory estoppel has yet to be successfully plead in New York, vigilant advocates should keep the theory in mind when the appropriate factual circumstances arise. Despite the negative treatment, advocates at Merlin Law Group will not hesitate to be the first to successfully plead the theory in New York should those facts be presented.

[1] Sher v Allstate Ins. Co., 947 F Supp 2d 370 [SDNY 2013].

[2] Tozzi v Long Is. R. Co., 170 Misc 2d 606 [Sup Ct 1996].

[3] Tozzi, 170 Misc 2d 606 at *613 [Sup Ct 1996].

The term “replacement cost policy” is a misrepresentation by many insurance companies about the product they are now selling. Insurance regulators should not allow the general public to be duped into buying something which is obviously not what the insurance company is promising. Accordingly, I propose that we should consider that unless minimum standards within a policy are met, insurance companies selling any all-risk replacement insurance are required and must warn that they are selling a Non-Standard Non-Replacement Cost Policy. Insurance products that are deemed to be Replacement Cost Policies in the residential market should at least meet the criteria found in mortgage requirements for federal negotiable mortgages. Continue Reading Homeowners Insurance Policies Differ—The Need For A Standard vs. Non-Standard Replacement Cost Policy Designation

Ejusdem generis is a Latin phrase that roughly translates as “of the same kind, class, or nature.” Its use is similar to that of noscitur a sociis,1 in that it usually involves a list of terms, but in this case one that ends in a catch-all category. Whether a particular object or event not specifically referenced in that list is subject to the exclusionary function of the listing depends on its similarity to the other items in the listing.2 Continue Reading What Is Ejusdem Generis and How Can it Help Clarify Ambiguous Policy Language If My Insurer Denies Coverage?

Generally, insurance policies in Texas are construed according to the same rules that govern the construction of contracts.1 Insurance policies must be interpreted by reading all sections of the document together.2 This stems from the primary concern of the courts—to enforce the parties’ expressed intent.3 “No one phrase, sentence, or section [of the policy] should be isolated from its setting and considered apart from the other provisions.”4 If part of a policy was read separately from the rest of the document, it would defeat the parties’ intent by excluding the other provisions. Continue Reading Ambiguity in Texas Insurance Policies

One of my favorite aspects of being a first-party property insurance attorney is being able to pick apart an insurance policy and take a position on the way a certain provision should be interpreted. Continue Reading Interpreting the Plain and Ordinary Meaning of an Ordinance or Law Insurance Provision; What Does it Mean to “Incur” and When Does this Happen?

Happy Thanksgiving!

Claims Journal published an article earlier this week, The Key to Winning COVID Business-Interruption Claims: Say the Virus is Present, quoting me from last Friday’s Forum at 2. I discussed the Chloe’s Café brief we filed in California,1 and provided a copy to the audience. The press and others must have watched the episode, and they noted: Continue Reading Friday Forum at 2 Watched by Insurance Media Regarding Business Interruption and Civil Authority Claims

Note: This guest post is by Jamie Glass, a law clerk with Merlin Law Group in our Panama City office.

The local farmers’ market hosts an annual fruit salad competition. The rules of this completion require that only salads comprised completely of fruit may enter, specifically stating that “only apples, oranges, melons, grapes, cherries, and other fruits may be used.” A young, excited chef wishes to enter with her tomato and cucumber salad, but will she be able to? Using the ejusdem generis rule of construction, she can! Continue Reading The Fruit Salad: Using Ejusdem Generis in Tennessee Insurance Policy Interpretation

Matching of damaged parts of a building is nothing new. This “Give Me Your Walls” episode from the classic Dick Van Dyke Show demonstrates a typical concern most property owners have about the aesthetics of matching property:

Some insurance companies are now selling “swiss cheese” and “cheap” insurance because they specifically say they will not pay for matching of damaged to undamaged property. Some insurance companies will do anything to delay or avoid paying for matching including making the issue an alleged coverage issue on every case—“you will have to sue us if you want to get paid or agree to a heavy discount.”

These topics and United Policyholders filing an amicus brief supporting appraisal will be discussed today at 2 pm. Here is the link for the livestream.