Policyholders with flood insurance claims should file proofs of loss if they expect to get paid anything more than what the National Flood Insurance Program has already paid. Filing a proof of loss is important; the absence of this otherwise meaningless piece of paper is a ground to deny a valid claim. Federal common law places form over substance, as recently exemplified in Hughes v. American National Property & Casualty Company, 2013 WL 3776486 (E.D. La. July 16, 2013).
The facts regarding the proof of loss are routine in the field when a policyholder tries to adjust a flood claim without professional help:
Hughes…insists that he returned the proof of loss to the adjuster, along with eight other documents. In his unsworn declaration submitted to the Court, Hughes states that he faxed the proof of loss to the adjuster. Hughes argues that he met with the adjuster on numerous occasions at the property, and that defendant should have not only his agent’s submissions, but also plaintiff’s submissions. Plaintiff states that Exhibits 1 through 8, which include filled out worksheets of the losses, estimates, the NFIP “Final Report,” photographs showing that his property had been repaired from previous damage, and his contractor’s estimate which was sent to ANPAC, are legal proof of loss.
In March of 2012, ANPAC notified Hughes’ counsel that Hughes’ claim had been closed without payment because Hughes had not provided a sworn proof of loss. The letter again outlined Article VII(J)(1–9) of the SFIP and noted that some items could not be considered because documentation of prior repairs was never provided. The letter also reminded Hughes’ counsel that the SFIP is a federal policy and as such it is under the jurisdiction of the federal government.
Hughes argues that he supplied a proof of loss and points to specific documents in the record, including: worksheets prepared by Hughes and Cotton containing descriptions and replacement costs of damaged items, Cotton’s Final Report containing a payable amount of $2,586.14 for the building and contents damages, five photographs of prior flood repairs that were sent to ANPAC, ANPAC’s confirmation that Cotton’s Final Report had been reviewed and that the claim was in the process of being concluded, and Hughes’ contractors estimate of $29,930.00. None of these documents are signed by Hughes. (citations omitted)
The ruling reiterates flood claim proofs of loss must be filed:
The submission of a sworn proof of loss is a strict requirement. Gowland v. Aetna, 143 F.3d 951, 954 (5th Cir.1998) (holding that an insured’s failure to provide a sworn proof of loss “relieved the federal insurer’s obligation to pay what otherwise might be a valid claim”). For example, in Marseilles Homeowners Condominium Association Inc. v. Fidelity National Insurance Co., the court held an insured could not “substantially comply” with the proof of loss requirement by submitting relevant claim information but not providing a sworn proof of loss. 542 F.3d 1053, 1055–56 (5th Cir.2008). The court reasoned that the theory of substantial compliance is “contrary to federal statutory law” because the insured must “show prior compliance with all of the policy’s requirements.” Id. at 1056 (relying on the court’s decision in Richardson v. Am. Bankers Ins. Co. of Fla., 279 F. App’x 295, 298 (5th Cir.2008), which held the notion of substantial compliance is contrary to binding precedent that requires the proof of loss requirement to be strictly construed).
Hughes has not provided evidence that he supplied a sworn proof of loss. The documents he relies on are not sworn, and they do not contain all the information required by Article VII(J)(4), and as such they do not comply with the policy requirements of the SFIP. Also, like the Fifth Circuit held in Marseilles, substantial compliance is not an available argument for Hughes, as the proof of loss requirement is strictly enforced. 542 F.3d at 1055–56. Hughes knew of his obligation to provide the proof of loss, as he signed a letter in September which outlined Article VII(J)(4)…He also received a letter in March which notified him that his claim was being closed because he failed to provide a proof of loss…The letter again outlined Article VII(J)(4). Id. Even if ANPAC had not informed Hughes on multiple occasions of his obligations, Hughes would still be responsible for submitting a sworn proof of loss. See Heckler, 467 U.S. at 63 (“those who deal with the Government are expected to know the law and may not rely on the conduct of Government agents …”). Because Hughes did not supply a document that contains the information required by the proof of loss provision of the SFIP, no rational trier of fact could find that he is entitled to receive payment for his SFIP claim.
If you do not want to get paid what you are owed from National Flood, do not file a proof of loss. If you want a chance to get paid what you are owed, timely file a formal proof of loss on the standard FEMA proof of loss form.
As noted in DANGER – 4 Months Left to File National Flood Proofs of Loss for Hurricane Sandy Flood Claims, Superstorm Sandy flood policyholders have until October 29, 2013, to get the FEMA proof of loss into the hands of their flood insurers.