On October 1, 2013, FEMA announced that it was extending the proof of loss deadline by six months for flood insurance policy claims due to Superstorm Sandy. Normally, policyholders have sixty days from the date of loss in which to provide proof of loss. However, given the extensive damage caused by Sandy, FEMA extended the deadline. On November 9, 2012, FEMA extended the deadline for 1 year. FEMA extended it again October 1, 2013 creating a new deadline of April 28, 2014.
Given these extensions, FEMA sought to clarify the difference between the proof of loss extensions and the time to sue over a coverage dispute. In a November 21, 2013 memo, James A. Sadler, Director of Claims of the National Flood Insurance Program, noted that the statute of limitations to sue on flood insurance claims is 1 year pursuant to 42 U.S.C. § 4072. While FEMA has the authority to extend the proof of loss deadline, see 44 C.F.R. § 61.13(d) and 44 C.F.R. § 61 Appendices A(1) and A(2), Section VII(D), and Appendix A(3), Section VIII(D), it does not have the authority to extend the statute of limitations in the event of a coverage dispute. That statute of limitation is set by Congress and can only be changed by Congress.
Flood insurance policyholders also need to be careful not to confuse a claim decision with proof of loss deadline. “An NFIP policyholder whose insured property is damaged by an event such as [Superstorm] Sandy only has one claim arising from that event, regardless of the number of Proofs of Loss that the insured may submit in support of that claim.” The 1-year statute of limitation begins when the policyholder is notified in writing that the claim is denied in whole or in part. “While FEMA does the most it can to assist NFIP insureds, it cannot and does not waive or extend the applicable statute of limitations.”