Whereas talking on the Florida Affiliation of Public Insurance coverage Adjusters Fall Convention relating to Nationwide Flood Insurance coverage claims, I promised to weblog a couple of current case that made its manner via the federal courts. Owners Henry and Mary Siedzikowski discovered some laborious classes concerning the strict necessities for flood insurance coverage claims. The case, which started within the U.S. District Courtroom for the Jap District of Pennsylvania and was later affirmed by the Third Circuit Courtroom of Appeals, highlights the vital significance of adhering to the exact procedures outlined in Commonplace Flood Insurance coverage Insurance policies (SFIPs).
District Courtroom Findings
The Siedzikowskis’ residence close to the Schuylkill River suffered flood harm throughout Hurricane Ida in August 2021. They filed a declare beneath their SFIP, which was administered immediately by FEMA via the Nationwide Flood Insurance coverage Program (NFIP) Direct. The important thing points within the district courtroom case revolved across the validity of the owners’ proof of loss submissions.
The federal trial courtroom discovered for FEMA concluding that: 1
- The Siedzikowskis’ December 2021 letter to FEMA didn’t qualify as a sound proof of loss as a result of:
- It was not “sworn to” by the plaintiffs, missing notarization or an equal.
- It didn’t embrace a certain quantity being claimed beneath the coverage.
- The 2 legitimate proofs of loss submitted by the Siedzikowskis had been absolutely paid by FEMA, totaling $160,368.95.
- State legislation claims in opposition to the adjuster (Administrative Methods, LLC) had been preempted by federal legislation.
On attraction, the Third Circuit affirmed the district courtroom’s choice. 2 The appellate courtroom’s key findings included that the owners did not plausibly allege that they complied with the claim-submission course of required by their SFIP. The December 15, 2021, letter to NFIP Direct didn’t qualify as a sound proof of loss as a result of:
- It lacked a selected loss quantity.
- It was not sworn to by the Siedzikowskis.
The important thing classes from this case are:
- Strict Compliance is Essential: Adhere meticulously to all SFIP necessities, particularly relating to proof of loss submissions.
- Specify Declare Quantities: At all times embrace a certain quantity being claimed beneath the coverage in your proof of loss
- Timeliness Issues: Submit proofs of loss inside the required timeframe, usually 60 days from the date of loss (although extensions could also be granted in some circumstances.
- Casual Communications are Inadequate: Letters or emails disputing adjusters’ findings don’t substitute for formal proof of loss submissions
- State Legislation Claims are Preempted: Perceive that state legislation claims in opposition to adjusters or associated to SFIP dealing with are usually preempted by federal legislation. Federal legislation is the one legislation that applies when coping with Nationwide Flood Insurance coverage claims.
- Doc All the pieces: Preserve detailed data of all communications and submissions associated to your declare. Submit all estimates and documentation with the proof of loss kind.
- Think about Authorized Counsel Early: Given the advanced necessities, in search of authorized recommendation early within the claims course of could also be useful, particularly in disputed circumstances.
- Perceive the Finality of Selections: Courts might dismiss circumstances with prejudice if correct procedures aren’t adopted, leaving no alternative for modification.
There’s a have to reform the NFIP, and this case is an instance. FEMA escaped paying the complete quantity owed on the declare due to technical form-over-substance guidelines. Henry Siedzikowski is a famous and skilled litigation legal professional. If he can’t adjust to the technicalities of his personal flood declare, what makes the federal authorities assume anyone else has half an opportunity of getting truthful therapy? Here’s a little about Siedzikowski from his agency’s web site:
Henry F. Siedzikowski is a senior trial and appellate legal professional with vital expertise litigating circumstances in federal and state courts and administrative companies all through the nation, with an emphasis on advanced business disputes, healthcare, insurance coverage, antitrust, and chapter issues. He has served as trial counsel and lead trial counsel in litigating, to a profitable conclusion, many multimillion-dollar circumstances….
In his healthcare follow, Henry serves as a enterprise advisor and litigator for insurers, managed care firms, hospital techniques, and doctor and ancillary suppliers on a broad vary of authorized points. He has intensive expertise in inside audits and/or investigations within the healthcare area, in addition to in growing compliance plans. Henry additionally represents hospitals and healthcare techniques in medical workers and peer evaluation points.
Henry’s insurance coverage follow consists of intensive expertise litigating circumstances and advising purchasers in reinsurance issues, protection points, managing basic agent points, govt contracts, insurance coverage firm insolvencies, and insurance coverage fraud investigations. He’s skilled in issues regarding medical insurance, life insurance coverage, property and casualty, administrators and officers, and errors and omissions coverages.
Henry has served as lead trial counsel, together with courtroom appointment as co-lead counsel or liaison counsel in a number of class actions and multi-district litigations. His advanced litigation follow has included circumstances involving civil rights beneath 42 U.S.C. §1983, ERISA, chapter, antitrust, and mental property issues.
When completed attorneys accustomed to advanced insurance coverage issues lose advantages due to form-over-substance guidelines that NFIP and their attorneys cover behind to frustrate in any other case owed advantages, the system must be overhauled. Congress wants to analyze how policyholders are being handled and cross new legal guidelines altering this technique.
I’ve questioned these answerable for the NFIP quite a few occasions over the previous decade. I offered one other instance in “Are Some Managers Working the Nationwide Flood Insurance coverage Program Corrupt?”
Realizing that Nationwide Flood clients had been relying upon Nationwide Flood’s personal phrases to show extra monies had been owed, Nationwide Flood directors merely modified the guide to cheat its clients out of monies overwise owed. That’s not proper.
Congress ought to conduct an investigation and reform the Nationwide Flood Insurance coverage Program. The Govt ought to “clear home” to get directors who will demand integrity. It’s clearly being run partly by those that look to shortchange policyholders by technical necessities and who will change the principles mid-stream to win in any respect prices.
The emphasis is on “some” as a result of I’ve recognized a number of mid-level flood managers who’re and have at all times been moral and truthful.
The underside line is that flood policyholders with claims aren’t the enemy. They should have legal guidelines and laws which don’t enable technical disallowance of in any other case legitimate claims.
Thought For The Day
The legislation is an ass – an fool.
—Charles Dickens
1 Siedzikowski v. Criswell, No. 22-3369, 2023 WL 3161459 (E.D. Penn. Apr. 28, 2023).
2 Siedzikowski v. Administrator of Federal Emergency Administration Company, No. 23-1937, 2024 WL 1506349 (third Cir. Apr. 8, 2024).