Howell v. State Farm Insurance (540 F. Supp. 2d 621, 2008)

MEMORANDUM

BENSON EVERETT LEGG, Chief Judge.

This is a proposed class action by homeowners seeking benefits under Standard Flood Insurance Policies (SFIPs) issued by private insurers participating in the National Flood Insurance Program (NFIP). The plaintiffs are nine Maryland residents whose homes were damaged by flooding during and immediately after Hurricane Isabel in September 2003. In the wake of the storm, the plaintiffs filed claims with their respective insurers to rehabilitate their homes. Each of their claims was ultimately settled for an amount below the policy limit, but in the full amount claimed. The plaintiffs now contend that the defendant insurance companies breached their contractual obligations by coercing or misleading them into filing proofs of loss that did not adequately reflect the true extent of the damage to their properties.

All nine defendants have moved for summary judgment. According to the defendants, the plaintiffs are barred from recovery because they failed to comply with a central and mandatory term of their policies. As a matter of federal law, the SFIP unconditionally requires a claimant to file a proof of loss within a specified time after the loss occurs, in this case 120 days. As we explain in greater detail below, the responsibility for filing a timely and complete proof of loss rests squarely with the insured. Private insurers participating in the NFIP have no authority to waive the proof of loss requirement or to pay an amount in excess of the amount claimed.

In this case, each of the plaintiffs submitted timely proofs of loss, which their insurers paid in full. Alleging misconduct in the handling of their claims, the plaintiffs now seek to recover additional damages under the terms of their SFIPs. This cannot be done. The deadline for filing proofs of loss has long-since passed, and the Court is without authority to excuse the plaintiffs’ failure to comply with a central prerequisite for the disbursement of federal flood insurance benefits. Accordingly, the Court agrees that the insurers are entitled to judgment as a matter of law, and will therefore GRANT summary judgment in favor of defendants State Farm Insurance Company, Omaha Property & Casualty Corp., Indemnity Insurance Company of North America, Standard Fire Insurance Company, USAA General Indemnity Corp., Harleysville Mutual Insurance Company, Allstate Insurance Company, Selective Insurance Company of the Southeast, and South Carolina Insurance Company.

I. Background

A. The National Flood Insurance Program:

The NFIP is administered by the Federal Emergency Management Agency (FEMA) pursuant to the National Flood Insurance Act of 1968, 42 U.S.C. §§ 4001-4029. Under the program, individuals may purchase flood insurance either directly from FEMA or from private insurance companies (referred as “Write-Your-Own” or