The National Flood Insurance Program (NFIP) is a federal insurance program that offers flood insurance and is administered by the Federal Emergency Management Agency (FEMA). Although it is a federal government program, the insurance is actually purchased and serviced through private insurance companies and agents. Because the service is typically provided through private insurers, claims against the federal government may be limited if a problem arises under one of these flood programs.

In a recent case out of New Jersey, a state that doesn’t see too many lawsuits based on hurricane damage, an insurance company denied a local woman’s claim for flood damage from Hurricane Ida in 2009. In Pepe v. Fid. Nat. Prop. & Cas. Ins. Co., CIV.A. 11-3746 JEI, 2011 WL 4916290 (D.N.J. Oct. 17, 2011), the plaintiff purchased flood insurance under the NFIP program through Fidelity National Property and Casualty Insurance Company. After Hurricane Ida damaged her property, she submitted a claim to Fidelity, which sent an adjuster from Fountain Group, LLC. The adjuster did not find flood damage and denied the claim. Unhappy with the insurance company and adjuster’s findings, the plaintiff filed suit against the insurance company, the adjuster, and FEMA. FEMA filed a motion to dismiss the suit against it, claiming the court did not have jurisdiction to entertain a lawsuit against it under these circumstances. The court agreed:

It is well established that the United States and its agencies are immune from suit unless Congress explicitly waives sovereign immunity. U.S. Dept. of Energy v. Ohio, 503 U.S. 607, 615, 112 S.Ct. 1627, 118 L.Ed.2d 255 (1992). The National Flood Insurance Act (“NFIA”) contains a limited waiver of sovereign immunity where a claim was directly submitted to, evaluated, and denied by the FEMA Director, as opposed to a [write your own insurance] company. See 42 U.S.C. § 4072; see also Van Holt v. Liberty Mut. Fire Ins. Co., 163 F.3d 161, 166 (3d Cir. 1998) (noting that “the plain text appears to restrict the reach of § 4072 to suits against FEMA.”).

The court found that the plaintiff purchased insurance from Fidelity, submitted a claim to Fidelity, and Fountain had adjusted the claim. Since FEMA did not directly sell the policy to the plaintiff, nor did FEMA participate in the adjustment of the claim, FEMA could not be held responsible for any problems with the claim. The New Jersey court noted that other courts in Maryland, Massachusetts, and Pennsylvania have also ruled the same way, and the claim against FEMA was dismissed.

This case serves as a reminder that even though the NFIP is a federal government program, recourse may be limited against the federal government if something goes wrong during the claims process. Sovereign immunity seems to be rather simple and straightforward when applied to the facts of this case, but it is actually a complex legal doctrine. If you have a complication with a flood insurance claim, it pays to seek competent legal help for your claim.