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Policyholders And Not Their Lawyers Must Sign Flood Loss Certificates – Real Estate Insurance Blog



Federal common law which interprets the rules and regulations of the national flood program is usually not helpful to policyholders. It has really become a situation where technical, literal rules are followed to the letter of the law rather than any intention or spirit as to why the rule was written. In this "form over substance" customary law, which federal judges feel compelled to follow, an important lesson is to follow these rules in a demanding manner or risk losing insurance benefits. A recent case found that a lawyer, even if he acts with the authority of the client, cannot sign the form of proof of loss for the policyholder's client. 1

Here are the simple relevant facts cited by the federal court: [1

9659003] On 26 September 2017, the plaintiff, through his agent, submitted a form for proof of loss dated 25 September 2017, claiming that his flood loss amounted to USD 250,000.00 … The plaintiff did not sign the proof of loss. … Rather, the document is signed, & # 39; Duane Cothren by JDS. & # 39 ;. . .

& # 39; JDS & # 39; refers to the plaintiff's lawyer, J. Douglas Sunseri … When the plaintiff retained Sunseri to represent him, the plaintiff agreed in a document entitled "Contractual Agreement and Authority to Represent" that: & # 39; I [Plaintiff] authorize the lawyer to sign something proof of loss on behalf of myself [sic] to preserve my claim with FEMA. & # 39;

The reasoning for the law and the judgment are important. I quote far so that you can understand that it is not a case of a malicious judge but a situation where previous case law seems to force the result:

"Where federal funds are involved, the person seeking these funds is obliged to confess with the legal requirements for the receipt of such funds. " Cohen v. Allstate Ins. Co 924 F.3d 776, 780 (5th Cir. 2019) (quoting Wright 415 F.3d at 388). "The appellant dealing with the government is assumed to have full knowledge of the law and can not rely on the behavior of government officials to the contrary. "..

& # 39; [T] the provisions of an insurance issued under a federal program must be strictly interpreted and enforced [.] & # 39; Gowland 143 F.43d, 919 F.4F, cit. Crop Ins. Corp. v. Merrill 332 US 380 (1947)); see also Wright 415 F.3d at 387 (& # 39; Under the Appropriations Clause of the Constitution, & # 39; [m] one may only be paid through an appropriation according to law; in other words, payment of money from the Treasury must be approved of a law. & # 39; & # 39; (with reference to Office of Pers. Mgmt. v. Richmond 496 US 414, 424 (1990))); Cohen 924 F.3d at 780 ('Men must turn around when they have to do with the government. This is especially true when a private party seeks money from the public tax authority. '(Sanitized)); Clark v. Wright Nat’l Flood Ins. Co. 821 F. App & # 39; x 342, 344 (5th Cir. 2020) … (& # 39; Since all claims for all insurances issued under this program are paid directly from the Federal Treasury, the provisions must SFIP policies must be strictly interpreted and enforced. & # 39;…

& # 39; the insurance. "& # 39; Clark 821 F. App & # 39; x at 344 (citing 44 CFR § 61, App. A (1), Art. VII (R)). Here it is no question of the fact that the plaintiff did not sign the proof of loss and that it was signed instead by his lawyer in accordance with a written agreement.

… The police require that the proof of loss is "signed and sworn by you", and "you" have a lot specific definition – one that includes the "insured" (s) shown on the declaration page ", the insured's cohabiting spouse, and even certain" mortgagees [s] and loss payers [s]. " Id. But according to the clear and unambiguous language of the policy, that definition does not include the plaintiff's lawyer or a mandate.

Federal common law, which governs these disputes … confirms this interpretation. The Fifth Circuit has stated that "an insured's failure to provide complete, sworn proof of loss, as required by the flood insurance, relieves the federal insurer's obligation to pay what could otherwise be a valid claim." … see also Wright 415 F.3d at 387 (& # 39; SFIP policies require insured persons claiming a claim to file a POL within 60 days [.]…. Courts have strictly enforced this requirement to submit in time a That POL complies with the regulatory requirements is a valid basis for rejecting an insured's claim. ”(referring to Neuser v. Hocker 246 F.3d 508, 510 (6th Cir. 2001 ) ("Our sister circles have consistently considered that FEMA's requirements for proof of loss should be strictly applied. & # 39;)

I gave these warnings long ago and repeatedly over the years. Eight years ago in Proof of Loss Tips for National Floods statements involving Superstorm Sandy I noted the following and suggested insurance coverage They follow a checklist listed in that blog post:

Rule one is to submit on time. The national flood proof of loss should be "received" by the flood insurance company – not the adjuster – within one year. Touro stated that this date can be as early as October 26, 2013. So you must send it before that time to meet the deadline for receipt. The time of receipt of a certificate is different from the time of "receipt". We send flood proof with a "delivery proof" because there are cases of allegations that people claim that proof of loss and material was received after the deadline.

Rule two is to fill in the form (s) completely and with an adequate backup. Use a federally OMB-approved form, fill in the blanks, and provide a backup with estimates, invoices, photographs, and anything else that can prove the amount requested.

Rule Three – Read the attached checklist. It will prevent all kinds of technical problems and address the subject in more detail. The publication is a major public service.

The bottom line is that this court ruling indicates that only flood insurers, not their attorneys or public prosecutors, can sign the proof of loss form.

In the long run, only Congress can change these harsh results by amending federal law. It seems to me that there is a need for change. It is up to us to bring the stories of injustice to those who write our laws. us wake up. The sleeper must wake up.
—Frank Herbert
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1 Cothren v. American Strategic Ins. Corp. No. 17-1725 (M.D. La. November 19, 2021).


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