On November 9, 2012, FEMA issued a memorandum to insurers and adjusters related to the Standard Flood Insurance Policy (“SFIP”) program because “FEMA believes that there is an urgent need to rapidly process claim payments to SFIP policyholders.” In addition to instituting a “rapid claims process,” the memo contains several waivers of requirements under SFIP policies.
First, the memo waives a condition and permits the write your own insurers to adjust and pay a loss based on the evaluation in the adjuster’s report instead of the signed Proof of Loss or insured-signed adjuster’s report. This is a waiver of the requirement that losses are payable 60 days after the insurer receives the proof of loss or within 90 days after the insurer receives the insured-signed adjuster report. As part of this process, insurers are supposed to send policyholders payment for covered losses, a copies of their adjusters’ reports, and a letter explaining this “rapid claims process.” Cashing the checks issued by the insurers will not prevent a policyholder from seeking additional payment under the SFIP where coverage limits have not been exhausted.
If the policyholder disagrees with the amount of payment issued by an insurer, he or she must send the insurer a signed and sworn proof of loss. If payment is issued and no additional proofs of loss are submitted by the policyholder, the insurer will close the file. Second, to allow enough time for policyholders to evaluate their losses and have the chance to seek additional SFIP payments, FEMA extended the deadline during which a policyholder must submit a proof of loss from 60 days after the date of loss to one year from the date of loss.
Lastly, if an insurer denies a claim, in whole or in part, the policyholder may appeal it directly to the Associate Administrator, Federal Insurance and Mitigation Administration. If a lawsuit is filed, it must be filed against the insurer within one year of the date of the first written denial of all or part of the claim.
The memo specifically states that it applies to flood damage caused by Sandy, with dates of loss beginning October 25, 2012, and continuing, in the states of Florida, Georgia, South Carolina, North Carolina, Virginia, Washington, D.C., Maryland, Delaware, West Virginia, Pennsylvania, New Jersey, New York, Connecticut, Rhode Island, Massachusetts, New Hampshire, Vermont, and Maine.
Mark your calendars for these important dates for the submission of proof of loss forms and filing deadlines for any lawsuit related flood damage from the super-storm Sandy event.