National Flood Insurance Program Law

Lancaster insurance attorneys will occasionally see a claim covered by the National Flood Insurance Program. Each of these types of government programs are governed in their own particular way. The United States District Court for the Southern District of Texas, Galveston Division issued a ruling that attorneys handling these types of claims need to know about and read. The style of the case is, Ruby Pal v. Texas Farmers Insurance Company.
This is a summary judgment ruling wherein Farmers sought to have the court dismiss the case filed by Pal.
Pal’s property was damaged in flooding during Hurricane Ike in September 2008. At the time, Pal had insured the property for $110,000.00 against flood loss with Farmers, a WYO insurer with the National Flood Insurance Program. Pal’s initial claim was adjusted and paid, on December 29, 2008, in the amount of $53,610.45. The extended deadline for filing a Proof of Loss (POL) for Hurricane Ike claims expired on August 7, 2009. Seven months later, on March 11, 2010, piled filed her second POL seeking policy limits. Farmers negotiated Pal’s claim and by April 7, 2010, determined she was due an additional $7,644.68. The parties requested a waiver of a timely POL for that amount which was approved by FEMA on April 13, 2010. On October 1, 2010, Pal sued Farmers seeking additional proceeds under her policy. The parties continued to negotiate her claim, but reached impasse around May 30, 204. As a result, Farmers filed the summary judgment motion.
The court said the outcome was simple. Pal’s Proof of Loss was untimely and she was procedurally barred from recovery under the federal program. Pal argued that FEMA’s April 13, 2010, waiver was a complete relinquishment of its POL procedural defense, but she was mistaken. FEMA, in conformity with its practice, limited its waiver to the supplemental sum of $7,644.68 and reserved all other rights it could assert under the policy. Pal did not seem to argue that Farmer’s continued negotiations after her complaint was filed constitutes a constructive waiver, but that argument, too, would have failed.
The court thus granted Farmers Motion for Summary Judgment and dismissed Pal’s complaint with prejudice thus preventing her from refiling it.