Our previous blogs provide many resources to policyholders and their advocates on the topic of flood proof of loss forms and the statute of limitations: Further Clarification of the National Flood Statute of Limitation and Proof of Loss; Avoiding the National Flood Statute of Limitation Trap; and National Flood Proofs of Loss – Video Blog. As defined by the FEMA web site, a Proof of Loss is a form used by the policyholder to support the amount they are claiming as damages under their policy, which must then be signed and sworn to, and submitted with supporting documentation.1
A recent Pennsylvania case serves as an important reminder that the policyholder must timely and properly submit their proof of loss form in order to receive payment under the National Flood Insurance Program (“NFIP”). In Rudi v. State Farm Fire & Casualty Insurance Company,2 Mr. and Mrs. Rudi’s home was damaged by a flood. Their flood policy, a Standard Flood Insurance Policy (“SFIP”) issued by State Farm, provided for building coverage in the amount of $76,000 and personal property coverage in the amount of $38,800. The Rudi’s retained a public adjuster to assist with their claims and the adjuster prepared a preliminary estimate which contained a building estimate of $44,791 and a contents estimate in the amount of $25,542. Because the policy was written pursuant to the National Flood Insurance Program (NFIP), the Rudi’s had 60 days from the date of loss to submit their sworn proof of loss to State Farm. Initially, the Rudi’s filed a proof of loss in the amount of $8,000 which did not contain a copy of the public adjuster’s estimate. The following day, their public adjuster faxed a letter to State Farm with a copy of the estimate. Thereafter, the Rudi’s submitted two supplemental proofs of loss to State Farm. Neither of these proofs of loss referred to or attempted to incorporate by reference the public adjuster’s preliminary estimate. In response, State Farm made payment to the Rudi’s for the amounts in their sworn proofs of loss, but not for the full amount contained in the public adjuster’s preliminary estimate. When the Rudi’s filed suit against State Farm for breach of the policy and statutory bad faith, the Court awarded summary judgment in favor of State Farm and found:
- That State Farm was not liable to pay the Rudi’s any amount not claimed in timely proofs of loss, and
- The SFIP unambiguously requires that the proof of loss must be submitted by the insured.
FEMA has stated that a proof of loss form must be received by your flood insurer by April 28, 2014 (if your date of loss is October 28, 2012) or April 29, 2014 (if your date of loss is October 29, 2012). However, note that if your statute of limitation period runs before these dates you should send your proof of loss before the lawsuit is filed in order to preserve your rights. Therefore, don’t delay!