A federal district court in Louisiana recently considered whether a homeowner’s three proofs of loss and public adjuster’s estimate of damages were sufficient to satisfy the proof of loss requirement in the Standard Flood Insurance Policy (“SFIP”).
In Young v. Imperial Fire & Casualty Insurance Company,1 the insured initially submitted a proof of loss for the building policy limit of $175,100, less the deductible. However, the actual cash value, full cost of replacement or repair, and applicable depreciation were listed as “undetermined.”
The insured’s public adjuster then sent an estimate of damages to the insurer in the amount of $260,635.83 to supplement the insured’s proof of loss.
Days later the insured’s public adjuster sent another proof of loss for building damages. This time, the proof of loss indicated that the full cost of repair or replacement was $260,235.83, but the actual cash value of the building and applicable depreciation were listed as undetermined. The proof of loss again claimed the policy limit of $175,100, and was accompanied by supporting documentation.
Finally, the insured’s public adjuster submitted a third proof of loss. This proof of loss used the same figures as the previous form, and again stated that the actual cash value of the building and applicable depreciation were undetermined. There was no supporting documentation attached.
The Young’s insurer ultimately rejected the proofs of loss and Young sued.
The insurer sought summary judgment, arguing that the insured had not submitted a timely proof of loss for building damages that complied with SFIP requirements. The court ruled that the Young’s proof of loss forms, together with the public adjuster’s estimate, constituted “a complete Proof of Loss that complies with the SFIP.” Accordingly, the court denied the insurer’s motion for summary judgment.
This is an example of how Write-Your-Own carriers participating in the federal government’s National Flood Insurance Program (“NFIP”) will scrutinize insureds’ proofs of losses.
Insureds and their representatives should be very mindful to follow the suggestions Chip Merlin outlined in his recent blog, National Flood Proof of Loss Deadline on Monday – Are You Sure the Proof is Right.