FEMA Says No Deadline Extension for Filing Sandy Flood Insurance Suits

November 25, 2013

The Federal Emergency Management Agency (FEMA) said it cannot extend the deadline for Superstorm Sandy victims who may want to file lawsuits challenging a denial or disallowance of all or part of their federal flood insurance claims.

FEMA’s announcement is in response to an earlier request from New York lawmakers. U.S. Sen. Charles Schumer (D-N.Y.), U.S. Sen. Kirsten Gillibrand (D-N.Y.) and U.S. Rep. Peter King (R-Seaford, N.Y.) have asked FEMA to extend the 12-month statute of limitations for Sandy victims who are seeking to legally challenge their flood insurance payout amounts in civil actions.

According to FEMA, homeowners can sue within one year from the date they received their first written denial for any portion of their National Flood Insurance Program (NFIP) policy claims.

Last week, FEMA also sent a bulletin to insurance companies participating in the NFIP’s Write-Your-Own (WYO) program, notifying them that the one-year statute of limitations is dictated by federal law and thus cannot be altered by FEMA.

Sen. Schumer and others have argued that the 12-month statute of limitations doesn’t give Sandy victims nearly enough time. The statute of limitations to pursue civil action should start only when the claimants have exhausted all their administrative appeals and received a final determination from their insurer, the lawmakers argued.

New York lawmakers said FEMA’s stance on the statute of limitations is particularly puzzling in light of the fact that the agency granted Sandy-affected households an extension until April 29, 2014 to submit “proof of loss” documents to their insurance companies.

When asked about its announcement, a FEMA spokesperson told Insurance Journal that in the aftermath of Sandy, FEMA’s NFIP made every effort to expedite payments to disaster survivors, and to provide additional time to enable policyholders to submit a proof of loss supporting a claim.

But the spokesperson said that unlike the proof of loss deadline, “FEMA cannot extend the time limit for a policyholder to bring a lawsuit after receiving a denial/disallowance of all or part of a claim. This time limit is set by Congress, and by law, FEMA does not have the authority to extend the time limit to file a lawsuit.”

To provide clarification on this subject, FEMA has provided a bulletin to its Write-Your-Own insurance partners and is briefing key stakeholders to provide additional information, the spokesperson said.

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