A recent case out of the District of New Jersey addressed language in the Standard Flood Insurance Policy (“SFIP”) that permits the insured to bring suit within one year after “the date of the written denial of all or part of a claim.”

In Migliaro v. Fidelity National Indemnity Insurance Company,1 the relevant facts were:

  • Plaintiff’s property was damaged by Superstorm Sandy in October 2012.
  • On November 29, 2012, Defendant’s independent adjuster inspected the property.
  • That same day, Plaintiff submitted requests for advance payments in the amount of $25,000 for building damage and $10,000 in contents damage. Defendant paid those amounts.
  • On December 28, 2012, the independent adjuster sent a report to Defendant recommending payment for $74,864.17 in covered building damage and $15,584.94 in covered contents damage.
  • Defendant accepted the recommendation and paid $49,864.17 (the difference between the advance payment and the payment recommendation by the independent adjuster.)
  • On June 28, 2013, Plaintiff submitted a proof of loss in the amount of $236,702.57.
  • On July 15, 2013, Defendant sent a letter that denied the proof of loss, on the basis that it was not an accurate reflection of the covered damage.
  • On December 13, 2013, Plaintiff filed a complaint in the District of New Jersey for breach of the insurance contract, but that suit was dismissed without prejudice on January 15, 2016.
  • Plaintiff then sued Defendant on July 22, 2015, for breach of the insurance contract.

Defendant argued that the complaint was barred by the one-year suit limitations period governing claims for SFIP benefits against a Write Your Own (“WYO”) company. Specifically, that its July 15, 2013, letter rejecting the proof of loss constituted a written denial of the claim, triggering the one-year suit limitations period.

The trial court reasoned:2

The Third Circuit has not explicitly defined what qualifies as a written denial of a claim seeking benefits under the SFIP. Other courts in New Jersey, however, have found a written denial where the defendant rejected a claim that was based on a sworn proof of loss. See Kroll v. Johnson, No. Civ. 14-2496 (FSH), 2014 WL 4626009, at *3–4 (D.N.J. Sept. 15, 2014); Linblad v. Nationwide Mut. Ins. Co., No. Civ. 14-908 (NLH/KMW), 2014 WL 6895775, at *4–5 (D.N.J. Dec. 4, 2014) (surveying decisions in other courts). Here, Defendant denied Plaintiff’s sworn proof of loss in a letter dated July 15, 2013, more than one year before Plaintiff commenced this suit. Plaintiff counters that the July 15, 2013 correspondence does not constitute a written denial because it also contains a sentence stating, “This is not a denial of your claim.” Def.’s Mot. for Summary J. Ex. H. Representations made by a WYO Company, however, cannot alter the provisions of the SFIP absent express written consent of the Federal Insurance Administrator, 44 C.F.R. pt. 61, app. A(1), art. VII(D), and the Third Circuit has declined to find waiver of a SFIP requirement even where a letter from an insurance company contains contradictory language. Suopys, 404 F.3d at 810. Thus, the July 15, 2013 letter is a written denial that triggered the statutory period, and the Court grants the Motion for Summary Judgment.

For policyholders who have recently or are in the process of submitting flood proofs of loss—such as Hurricane Hermine and Hurricane Matthew policyholders—this case is an example of why it is so important to thoroughly read any denial letters received from the Write Your Own carrier. If a denial letter rejects a proof of loss, start counting the one-year period to file a lawsuit from that date. Federal flood claims have strict requirements. As the court stated in this recent case, a representation from a WYO carrier such as “this is not a denial of your claim” will not alter the requirements of the SFIP, without express written consent from the Federal Insurance Administrator.
1 Migliaro v. Fidelity National Indemnity Ins. Co., No. 15-5688 (D.N.J. Feb. 2, 2017).
2 Id. (Emphasis added).