The case of Gulf Coast Vacation Properties, LLC v. Gulfstream Property & Casualty Insurance Company,1 is a good reminder that terms and conditions within a flood insurance policy are not the same as a property insurance policy.
In October of 2018, while the flood policy was in place, the insured property was destroyed due to Hurricane Michael. The insured filed suit against its flood insurer on the basis that the insurer failed to fully compensate it for the loss and damage. Gulfstream sought a dismissal of the lawsuit on the basis that it was not filed in the proper court.
In part, the court noted that in addition to the requirements of the National Flood Insurance Program, the policy’s language required that suit must be “file[d] in the United States District Court of the district in which the insured property was located at the time of the loss.” Because the insured had not filed suit in the district where the property had been located, the court granted the insurer’s motion in part, and required that the case be transferred to the proper district. Note, the insured got very lucky that the claim was transferred and not dismissed entirely.
In addition to containing provisions that require the insured to file suit in the federal district where the damage occurred, flood policies typically have different requirements which the insured must perform in the event of a loss. The biggest difference relates to the proof of loss. Most property insurance policies require an insured to submit a proof of loss only after the insurer has requested the same and provided the form to the insured. Flood policies require that the proof be submitted within 60 days of the loss or damage. Failure to do so can be fatal to the insured’s claim. Flood policies also typically require that damaged and undamaged property be separated so that the insurer can inspect them. The timeframe for filing suit also differs in flood policies. Flood policies require that suit be brought within one year of the written denial of all or part of the claim.
These are just a few of the differences between a flood policy and a property insurance policy. In that regard, Gulf Coast serves as a good remainder that it is important to always read your policy (whether or not it is a flood policy) in its entirety to understand any specific requirements it may have.
1 Gulf Coast Vacation Properties v. Gulfstream Prop. & Cas. Ins. Co., 2020 WL 211057 (MD Fla. Jan. 14, 2020).