If you have flood insurance under the National Flood Insurance Program (NFIP) and you receive a denial of coverage, or the coverage you receive is inadequate to cover your flood-related losses, what options do you have available? Unfortunately, this is a question that many policyholders are forced to ask, as NFIP payouts often fall short of homeowners’ expectations.
The NFIP Claims Handbook outlines three options for homeowners who are dissatisfied with the outcome of their claim:
- File an appeal with the Federal Emergency Management Agency (FEMA) within 60 days of the denial or underpayment;
- Demand an appraisal in accordance with the terms of the NFIP policy; or,
- File a lawsuit demanding full payment in court.
5 Important Considerations for Disputing an NFIP Denial or Underpayment
While homeowners have each of these three options from the outset of their coverage dispute, there are some important considerations involved in choosing the best path forward. As a result, homeowners must carefully weigh their options taking into consideration time, cost and various other factors:
1. Pursuing Certain Options Can Preclude Pursuit of Others
While it is possible to pursue all three options if you pursue them in the order listed above, if you demand an appraisal, this will result in a waiver of your right to file an appeal with FEMA. If you go directly to court, you will lose your right to file an appeal with FEMA and your right to demand an appraisal.
2. An Appraisal Results in a Binding Decision
When you demand an appraisal, the appraisal results in a binding decision. Although it is possible to challenge this decision in court, introducing an unfavorable appraisal into evidence can make it more difficult to win your case at trial.
3. The 60-Day Time Limit for Filing an Appeal with FEMA
In order to have FEMA review your claim, you must file an appeal within 60 days of your insurer’s denial of coverage (or partial denial of coverage). If more than 60 days have passed, your options will be limited to demanding an appraisal or taking your coverage dispute to court.
4. The One-Year Statute of Limitations for Filing a Lawsuit in Court
NFIP coverage disputes are subject to a one-year statute of limitations. The one-year limitations period runs from the date of your insurer’s denial or partial denial, and it is not tolled by the filing of a FEMA appeal or invocation of the right to an appraisal.
5. Securing Payment as Quickly and Cost-Effectively as Possible
Ultimately, disputing the outcome of your insurance claim is about securing coverage as quickly and cost-effectively as possible. Of course, this can mean different things under different circumstances. To determine your best path forward, it will be necessary to critically assess the unique circumstances involved in your case, and make an informed decision based upon particular facts at hand.
Fort Lauderdale Hurricane Damage Attorneys for NFIP Claim Denials
The hurricane damage attorneys at Saavedra | Goodwin provide experienced and personalized legal representation for homeowners dealing with NFIP claim denials. If you have received a denial or partial denial and would like to discuss your options with an attorney, we encourage you to call 954-767-6333 or contact us online for a confidential initial consultation.