In a recent case,1 a federal court dismissed a flood claim following a nor’easter storm because the insureds’ proof of loss under the National Flood Insurance Act failed to satisfy the Standard Flood Insurance Policy’s (“SFIP”) “signed and sworn” requirement.2 In that case, the insureds submitted two claims to recover damages from the storm to their insurance company. The first claim of approximately $2,000 was completed on a form provided by the Federal Emergency Management Agency (“FEMA”). Both insureds signed and dated the document, which stated, “I declare under penalty of perjury that the information contained in the foregoing is true and correct to the best of my knowledge and belief.” Shortly thereafter, the insurance company issued a check to the insureds for the covered building damages.

Sometime after, the insureds submitted a second claim to their insurance company seeking an additional payment of approximately $250,000. The insureds’ proof of loss for the second claim differed from the first claim in two “important” ways. First, the form was provided by the insureds’ public adjuster. Second, while both insureds signed the document, it was not dated and lacked any declaration acknowledging a “penalty of perjury.”

The insureds sued for breach of the insurance contract after the insurance company denied their second claim because the proof of loss for that claim was both unsworn and not dated. The insurance company argued that the insureds’ failure to comply with the SFIP’s “signed and sworn” proof of loss requirement barred the insureds’ recovery for their otherwise valid claim.

Ultimately, the court agreed with the insurance company, ruling that the proof of loss for the second claim fell short of an affirmative acknowledgment of perjury required for parties submitting sworn declarations under a federal regulation. Therefore, the insureds’ failure to comply with the SFIP’s “signed and sworn” proof of loss requirement precluded them from recovering damages for their second claim.

This case highlights the importance and significance of complying with all terms and conditions of federal regulations.
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1 Hagstotz v. Nationwide Mut. Ins. Co., No. 17-2491, 2018 WL 5005000 (D.N.J. Oct. 16, 2018).
2 In particular, Article VII(J)(4) of the SFIP provides, “Within 60 days after the loss, send us a proof of loss, which is your statement of the amount you are claiming under the policy signed and sworn to by you…”

  • shirley heflin

    Dear Sir:

    This is one of the most moronic blog entries I’ve read in quite some time (based solely on the facts of the cases – has nothing to do w/you). So the Insureds “get it right” for the initial $2,000.00 claim and gets paid for that one but, SOMEHOW, the $250,000.00 claim was improperly submitted and payment denied.

    Your article states that the Insured’s Public Adjuster used their own form to submit the second claim for $250,000.00. That proved to be a big and costly mistake! Even a novice in the insurance industry should know that every insurance company has it’s own “way of doing things” and each have differing nuances. The “company” in this case is FEMA and it’s a National Flood (WYO) policy. I’ve never seen a “Sworn Statement in Proof of Loss” form that did not have a space for signing it, dating it and declaring that it’s “…..sworn to and submitted under penalties of perjury.” Most Proof of Loss forms have a space dedicated for a Notary Public, however, FEMA’s Sworn Statements in Proofs of Loss do not require notarization, but they do require the “….Signed and sworn under penalties of perjury….” language in the “signature(s) section.

    The appellant decision also stated:

    In a recent case,1 a federal court dismissed a flood claim
    following a
    nor’easter storm because the insureds’ proof of loss under
    the National
    Flood Insurance Act failed to satisfy the Standard Flood
    Insurance Policy’s
    (“SFIP”) “signed and sworn” requirement.2
    In that case, the insureds submitted
    two claims to recover damages from
    the storm to their insurance company.
    The first claim of approximately
    $2,000 was completed on a form provided by the
    Federal Emergency
    Management Agency (“FEMA”). Both insureds signed and
    dated the document,
    which stated, “I declare under penalty of perjury that the
    information
    contained in the foregoing is true and correct to the best of my

    knowledge and belief.” Shortly thereafter, the insurance company issued a

    check to the insureds for the covered building damages.

    The check that was issued for covered building damages stemmed from the first Sworn Statement Proof of Loss form provided by FEMA and payment of $2,000.00 was paid. It’s the second ($250,000.00) claim that was submitted on a “form” provided by the Public Adjusting Firm. The form was not filled out correctly and the claim was denied, litigated under a breach of contract action and then appealed.

    Indeed, it’s bad enough when Insured’s are taken advantage of by their Insurers when they are unrepresented. It’s even worse when their claim is denied when they have professional representation – in this case, a Public Adjusting Firm. I read the Appellate decision regarding the case herein and it states:

    This matter comes before the Court on Defendant’s motion for summary

    judgment…..arguing that Plaintiffs’ proof of loss statement
    under the
    National Flood Insurance Act fails to satisfy the Standard Flood Insurance
    Policy’s (“SFIP”) “signed and sworn” requirement. For
    the reasons set forth
    in the opinion below, the Court hereby GRANTS the Defendant’s motion.

    This is a sad and expensive loss for the Insured. I hope they explore other legal options that may help to recoup their losses.

    Respectfully,
    SHIRLEY HEFLIN
    Tampa, FL

  • Very important lesson for PAs, some of whom tend to use their own forms for everything as a show of intellect, power, resistance, ego, or whatever. It’s ok to use your own form, but the onus is then on you for the form to be flawless. In the case of flood, I always use the NFIP Proof.

  • Paul LaSalle

    Shirley & King,

    Thanks for reading the blog and for your insightful comments.