A latest resolution affords classes for policyholders beneath the Nationwide Flood Insurance coverage Program. In Zozo Investments LLC and Bertie & Neeka LLC v. First Group Insurance coverage Firm, the courtroom dismissed a breach of contract swimsuit with prejudice, discovering that the plaintiffs filed their case too late beneath the strict closing dates imposed by federal regulation. 1
The plaintiffs owned property that was broken by flooding throughout Hurricane Ian. On the time of the loss, they had been lined by a Commonplace Flood Insurance coverage Coverage issued by First Group Insurance coverage Firm, a write-your-own program provider taking part within the Nationwide Flood Insurance coverage Program. After submitting a declare for the harm, they initially acquired a examine from the insurer. Nonetheless, that fee was later withdrawn, and on March 13, 2023, the insurer mailed a denial letter explaining that the declare was being rejected as a consequence of a previous fee made by Residents Property Insurance coverage Company that exceeded the pre-loss valuation of the property. The denial gave the impression to be an invalid purpose for the nationwide flood provider to disclaim the declare, in my view.
Months later, after the plaintiffs submitted a sworn proof of loss, the insurer despatched a second denial letter on October 19, 2023. The plaintiffs filed swimsuit on October 4, 2024, asserting that the denial breached the insurance coverage contract and that they had been entitled to fee for his or her losses. They argued that the statute of limitations mustn’t have begun working till the second denial was issued, because the earlier letter had not been based mostly on a sworn proof of loss.
The courtroom disagreed. Citing 42 U.S.C. § 4072 and the phrases of the Commonplace Flood Insurance coverage Coverage, the courtroom emphasised that policyholders should file any lawsuit inside one 12 months from the date a written denial is mailed. It discovered the March 13 letter was a transparent denial, explicitly informing the plaintiffs that their declare fee was denied and that that they had 60 days to attraction. The courtroom rejected the notion {that a} denial have to be based mostly on a sworn proof of loss to set off the restrictions interval. In truth, it cited a number of selections throughout the Center District of Florida that uniformly maintain the statute of limitations begins to run upon the primary written denial, no matter whether or not a proof of loss was concerned.
The plaintiffs relied on older authority from the Jap District of Louisiana that supported their place, however the courtroom identified that the Fifth Circuit had since disapproved that line of reasoning, clarifying that Part 4072 doesn’t point out proof of loss in any respect. The primary denial letter, not the denial of the proof of loss, began the one-year clock. As a result of the lawsuit was filed greater than a 12 months after the March 13, 2023, denial, it was time-barred and needed to be dismissed.
Not like many insurance coverage disputes ruled by state regulation, NFIP claims are topic to federal statutes and rules that impose inflexible deadlines. As soon as a denial letter is mailed, the policyholder has precisely one 12 months to file swimsuit in federal courtroom. There aren’t any tolling provisions or extensions based mostly on subsequent correspondence, together with denials based mostly on proofs of loss. Policyholders and their attorneys should deal with the primary denial letter as the beginning of the countdown. Delaying the choice to pursue litigation, even whereas submitting extra documentation or partaking in additional dialogue with the insurer, will be deadly.
The important thing lesson is that with nationwide flood insurance coverage disputes, timing is every thing. The second a denial letter arrives, the authorized clock begins ticking. Any legal professional or public adjuster aiding a consumer with an NFIP declare should fastidiously observe that date. Ready too lengthy to file swimsuit, even with good-faith efforts to resolve the declare, will outcome within the courthouse doorways closing completely. That’s the arduous rule, and this case serves as one other agency reminder that will probably be strictly enforced.
Thought For The Day
“Higher three hours too quickly than a minute too late.”
– William Shakespeare
1 Zozo Investments v. First Group Ins. Co., No. 2:24-cv-939 (M.D. Fla. June 25, 2025).
