Superstorm Sandy was devastating to many people.  Those who had flood insurance through the National Flood Insurance Program (“NFIP”) obtained some additional relief.  But the NFIP, through the Standard Flood Insurance Policy (“SFIP”), has limits and requirements that cannot be ignored.  And apparently, the relaxation of some of those requirements for the purpose of expediting claims after Superstorm Sandy was not a waiver of one of the more important requirements:  the Proof of Loss.

In Uddoh v. Selective Insurance Co. of America, No. 18-2274 (3rd Cir. May 13, 2019) (Not Precedential), the Third Circuit Court of Appeals affirmed a New Jersey district court’s entry of summary judgment in favor of the insurance company.  The policyholder had a standard flood insurance policy issued under the “write your own” program by an insurance company participating in the NFIP.  The policy required timely submission of a signed and sworn proof of loss, which includes the amount being claimed and detailed information about damages.

In this case, the policyholder submitted a proof of loss with conflicting information and included a net amount claimed as zero, along with hand written notations of protest and demanding payment based on an insurance adjuster’s submission.  The contractor estimate that was submitted included repairs for items in the policyholder’s basement and third floor ceiling.  When the insurer denied the claim as being under the policy’s deductible, the policyholder sued for breach of contract and fraud.

The district court dismissed the state law fraud claims as being preempted by federal law governing the NFIP.  The district court then granted summary judgment for the insurer.  The district court held that the policyholder was barred from recovery because of the failure to submit an adequate proof of loss under the SFIP requirements.

In affirming the district court, the circuit court stated that by “failing to clearly indicate the amount that he was seeking to recover, [the policyholder’s] proof of loss did not comply with the SFIP requirements.”  The policyholder argued that the proof of loss requirement was waived by a Federal Emergency Management Agency bulletin.  The court rejected that argument finding that while there was a conditional and partial waiver the bulletin, as it said itself, was not a blanket waiver of the proof of loss requirement.  As the court stated, the bulletin simply allowed an insurance company’s initial payment to be based on the adjuster’s report, rather than on a proof of loss.