A current courtroom resolution in Sublett v. Westfield Insurance coverage Firm 1 exhibits how even well-intentioned policyholders can lose a flood insurance coverage declare earlier than their lawsuit ever begins. This case is not only a couple of technical authorized loss. It’s a couple of household attempting to get better from flood injury to their dwelling and discovering themselves out of choices, not as a result of they didn’t expertise actual hurt, however due to a collection of procedural and strategic missteps which might be sadly all too widespread in flood insurance coverage disputes. For insurance coverage declare professionals, public adjusters, and attorneys, the Sublett case exhibits the essential significance of understanding the distinctive authorized panorama of the Nationwide Flood Insurance coverage Program (NFIP) and following its guidelines with precision.
On the coronary heart of the case was a Normal Flood Insurance coverage Coverage (SFIP) issued via the NFIP and administered by a non-public insurer performing as a federal agent. When the Subletts’ dwelling in Kentucky was flooded on July 28, 2022, they promptly reported their loss. An impartial adjuster inspected the property and decided there was no injury to the primary residing space, solely to the basement. The flood adjuster ready a Proof of Loss (POL) for $6,189.05 and instructed that if the house owner disagreed with the estimate, she may submit her personal POL for a better quantity, supported by documentation. The policyholder hesitated to signal this preliminary POL, believing there could be structural injury the adjuster had not recognized. Finally, on September 21, throughout the 60-day deadline to submit a federal proof of loss, she signed the adjuster’s POL, nonetheless uncertain whether or not it lined all of the injury.
This resolution proved to be pivotal. Beneath the SFIP, a policyholder should submit a signed, sworn, and itemized POL inside 60 days of the loss in the event that they intend to say greater than what the insurer presents. Except FEMA permits for an extension, the regulation doesn’t enable for flexibility or leniency on this level. When, almost a yr later, the policyholder submitted a supplemental injury estimate for greater than $53,000 as a part of her lawsuit, the courtroom dominated that the declare was barred as a result of the brand new estimate was by no means submitted as a compliant POL. The courtroom emphasised that the NFIP’s proof of loss necessities are to be strictly enforced. There isn’t any allowance for substantial compliance, no room for waiver by the insurer or its adjuster, and no chance of estoppel based mostly on deceptive steerage from an insurance coverage consultant. The one occasion that may waive the 60-day POL requirement is the Federal Insurance coverage Administrator, and there was no proof that such a waiver was requested or granted on this case.
I’ve mentioned why the Nationwide Flood Insurance coverage Program wants reform concerning these overly restrictive proof of loss necessities in NFIP Escapes Cost with Kind Over Substance Guidelines: The Want for Reform of the Nationwide Flood Insurance coverage Program.
What makes the Sublett resolution much more instructive is that even when a correct POL had been submitted on time, the policyholder nonetheless confronted severe obstacles due to the content material of her personal engineering report. The house owner employed Yeiser Structural to guage potential structural injury. Whereas the report famous cracking finishes and sloping flooring, it did not causally hyperlink these points on to the flood. As an alternative, the engineer attributed the issues to long-term deterioration, moisture, and getting older. He didn’t relate the injury to the particular flood occasion. Within the eyes of the courtroom, that made all of the distinction. NFIP insurance policies cowl solely direct bodily loss attributable to flooding. Injury attributed to basic put on, poor upkeep, or unrelated moisture issues shouldn’t be lined. As a result of the report by no means definitively tied the structural points to the July 28 flood, it failed to supply the mandatory proof of causation to assist the declare, even when a correct POL had been filed.
One other key component of the case and lesson for policyholders struggling flood injury was the function of authorized counsel. The plaintiff’s legal professional argued the case as if it have been ruled by Kentucky regulation, citing state statutes on unfair claims practices, emotional misery, and basic rules of excellent religion and honest dealing. Nevertheless, NFIP insurance policies are creatures of federal regulation. The Nationwide Flood Insurance coverage Act governs this system, and courts throughout the nation have clarified that state regulation has no place in resolving disputes beneath these federally backed insurance policies. The courtroom in Sublett identified that the plaintiff’s filings have been largely devoid of authorized citations to the right physique of regulation and expressed concern that the legal professional appeared unaware of the unique software of federal regulation in NFIP disputes.
This isn’t to criticize the legal professional personally, however quite to spotlight a really actual downside within the authorized neighborhood. NFIP instances will not be like different insurance coverage disputes. They require a distinct set of expertise, information, and a focus to element. The principles are inflexible, the timeframes unforgiving, and the doctrines of waiver, estoppel, and substantial compliance—widespread lifelines in state regulation insurance coverage litigation—are nonexistent. Attorneys who enterprise into this enviornment should both already possess or rapidly perceive how the NFIP works. Failing to take action does a disservice to the purchasers they symbolize, who might unknowingly lose their capability to get better what they consider is rightfully theirs.
For policyholders, the takeaways from this case are clear. First, when a flood damages your property and also you carry an SFIP, it’s essential to act rapidly and observe FEMA’s guidelines precisely. That features submitting a signed and sworn Proof of Loss inside 60 days of the occasion for the complete quantity of your declare, not simply the quantity the insurer presents. For those who’re uncertain of the extent of your injury, it’s essential to nonetheless submit your individual estimate and documentation. Counting on what a FEMA adjuster tells you or assuming the method is versatile will solely set you up for disappointment.
Second, rent technical and authorized professionals who perceive flood claims. Your engineer should be able to clearly attributing injury to the flood occasion, not simply describing signs or doable causes. Your legal professional should perceive the distinctive physique of federal regulation that governs flood insurance coverage claims, or not less than be prepared to analysis it intimately earlier than submitting swimsuit.
The Sublett case is one other invaluable case offering invaluable insights for everybody concerned with flood claims. It exhibits that even when injury is actual, and the necessity for restoration is urgent, failing to observe the strict guidelines laid out by the NFIP will stop restoration. It reminds all of us, policyholders, public adjusters, attorneys, estimators, and engineers, that when coping with federally funded insurance coverage applications, there isn’t a substitute for precision and skilled professionalism. Finally, one of the best ways professionals can assist these policyholders we serve is to make sure they by no means should study these classes the laborious approach. Policyholders ought to at all times take into account hiring skilled professionals for his or her flood claims.
For readers wanting a larger understanding of this subject, I recommend studying Federal Flood Insurance coverage: Strict Compliance with Proof of Loss Necessities is Important, and Nationwide Flood Claims Have a One-Yr Statute of Limitations.
Thought For The Day
“Flip your wounds into knowledge.”
— Oprah Winfrey
1 Sublett v. Westfield Ins. Co., No. 7:23-cv-65, 2025 WL 1461817 (E.D. Ky. Might 21, 2025).