When handling National Flood Insurance Program (NFIP) claims, public adjusters and policyholders must be alert to critical warning signs. One of the most important phrases to recognize is: “We denied a portion of your claim.” Those few words, even if buried in a lengthy letter, should ring loud alarm bells. Under NFIP rules, a partial denial — regardless of whether a formal, compliant proof of loss has been filed — starts the statute of limitations time clock ticking for filing a lawsuit. If suit is not filed within one year of that denial, the claim is forever barred. I have warned about this previously in All National Flood Insurance Letters Are Important—Technical Denials of Only a Part of a Claim Start the One-Year Time to File Suit.
This hard lesson was reinforced in the recent case of Martini v. American Bankers Insurance Company of Florida. 1 After Hurricane Ian caused severe flood damage to their home, the policyholders submitted a claim. The insurer’s November 16, 2022, letter notified them that certain damages were not covered under their Standard Flood Insurance Policy because the damaged property was located below the elevated floor, which restricted coverage under NFIP rules. The letter clearly stated, “We denied a portion of your claim.” Although the letter also encouraged the insureds to seek supplemental payments if they found additional damage, the court found that this initial partial denial was enough to start the one-year clock for filing a lawsuit.
The policyholders and their attorneys attempted to argue that later activity — such as filing an additional proof of loss and receiving another denial — reset the clock. The court rejected that argument, pointing out that the law and the NFIP policy terms are clear: once any portion of the claim is denied, the time limit begins. No supplemental proofs of loss, negotiations, or appeals can extend or toll that one-year period.
Adding insult to injury, the original proof of loss filed by the public adjuster in this case was deeply flawed. Instead of using FEMA’s official NFIP Proof of Loss form, the adjuster prepared a non-compliant document. Courts and insurers treat these improperly filed proofs of loss as invalid. A compliant proof of loss is more than just a piece of paperwork — it is a mandatory condition for payment under the NFIP. Failure to use the proper form, sworn and signed with the required documentation, can doom even a perfectly legitimate claim.
It should be noted that the public adjuster later filed a proof of loss of a FEMA-required form. But that act did not reset the time for filing a lawsuit.
This case should serve as a warning. When a denial letter states that a portion of the claim has been denied, the insured and their representatives must immediately recognize the legal consequences. Whether or not a valid proof of loss has been submitted and whether or not further discussions or supplements are pending, the one-year statute of limitations has begun. Public adjusters must also be meticulous in preparing proofs of loss, ensuring they use FEMA’s required forms and comply strictly with NFIP guidelines. They should alert their client of the statute of limitations and the need to hire counsel about this deadline. Failure to do so could be grounds for a malpractice claim against the public adjuster.
Failing to understand or heed these requirements can be fatal to a flood insurance claim. In flood litigation, there are no second chances when it comes to missing the statute of limitations or filing a defective proof of loss. In every flood case, make certain a compliant and timely filed proof of loss is completed. Then, watch the one-year statute of limitations time. These are two of the most prolific issues where National Flood claims are lost before the fight begins.
Thought For The Day
“Time is more valuable than money. You can get more money, but you cannot get more time.”
—Jim Rohn
1 Martini v. American Bankers Ins. Co. of Florida, No. 2:24-cv-904 (M.D. Fla. Apr. 4, 2025).
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