Those familiar with Super-storm Sandy claims are aware that FEMA can extend/waive the formal proof of loss requirement within the Standard Flood Insurance Policy (“SFIP”) under the National Flood Insurance Program (“NFIP”). FEMA has extended the proof of loss deadline for Sandy claims until October 29, 2014. But what about flood losses that affect an area smaller than the widespread effects of Sandy? The SFIP requires a proof of loss to be submitted within sixty days from the date of loss, and FEMA may be less likely to issue a formal written extension of time when there is less political pressure surrounding a loss event. FEMA can waive the proof of loss requirement for a particular policyholder, but any waiver must be an express written waiver. There is a recent Florida case involving FEMA’s waiver of the proof of loss requirement.1
The case involved a Tropical Storm Debby claim to the policyholders’ home in Neptune Beach, Florida. The claim was filed, payment made for some damages by Hartford and the first proof of loss was submitted. Just outside of sixty days from the date of loss, the second proof of loss was submitted which listed the amount claimed by the policyholder. The parties had discussions for several months to resolve the dispute but eventually a lawsuit was filed. Before the lawsuit, the policyholder obtained a written document from FEMA that stated:
Based on the information you submitted, your request for waiver of the 60 day Proof of Loss policy provision is approved. This limited waiver is only for the amount of the loss and scope of damages outlined in this request and does not waive the proof of loss or any other requirement of the SFIP and makes no other comment because of lack of information. If it is later determined that an improper payment was made, the granting of this waiver does not constitute a waiver of the right to seek repayment of any such improperly paid amounts.
Hartford argued that it should win the case (on summary judgment by the Judge) because the second proof of loss was untimely since it was submitted after 60 days after the loss. The policyholder argued that FEMA had waived the proof of loss requirement in writing.
The Court noted there can only be a waiver of the proof of loss timeframe when there is an actual written waiver from the Federal Insurance Administrator. It should be noted that FEMA or Hartford’s agreement to consider damages caused by the loss and issue additional payment would not be a waiver of the proof of loss requirement.
Due to some of the language within the document, the Court found that the waiver was ambiguous whether it applied to the damages being currently sought or some other damages understood by the parties earlier on. The Court found an issue of fact regarding the waiver so Hartford’s motion was denied and the case is proceeding forward to trial.
There are numerous issues going on in the case, but one thing to take away from it is that general flood claims must have a proof of loss submitted within 60 days from the date of loss, or an express written waiver must be obtained from FEMA’s Federal Insurance Administrator if that deadline cannot be met. There is not always an extension to the proof of loss timeframe like what we have seen from Super-storm Sandy. As this case makes clear, continuing to adjust a claim and even make additional payment will not be a waiver of a proof of loss requirement. This strict deadline and strict view on any waiver of proof of loss deadline should be remembered by all those handling flood claims.