Insureds’ Claim for Flood Damage is Time-Barred
The federal district court granted the insurer's motion to dismiss because the insureds' claim for damages under the Standard Flood Insurance Policy was submitted too late. Caruso v. First Protective Ins. Co., 2025 U.S. Dist. LEXIS 23288 (M.D. Fla. Feb. 10, 2025).
The insureds' property sustained flood damage during Hurricane Ian. The insureds submitted a claim for their damages. On March 3, 2023, the insurer sent a letter partially denying the claim. Several months later, on September 26, 2023, the insureds submitted a proof of loss, which the insurer denied on June 26, 2024.
The insureds filed suit and the insurer moved to dismiss arguing that the claim was time-barred because suit was filed more than a year after its March 3, 2023 denial letter. The insureds argued that the March 2023 letter was not a proper denial to trigger the statute of limitations period. Rather, the argued it was June 26, 2024, denial letter that triggered the statute of limitations. Under the statute, a plaintiff had to institute an action within one year after the date of mailing of notice of disallowance or partial disallowance of the claim.
The court determined that the March 2023 letter was a proper disallowance that triggered the one-year limitation period. The letter stated in part, "The adjuster tells us you are claiming payment for the air handler; however, the flood policy will not allow us to pay you for your air handler because it is not considered direct physical loss by or from flood." It also included a Policyholder Rights form, which advised the insureds of their right to appeal or file a lawsuit after their claim is denied.
While the March 2023 letter did not explicitly use the word "deny," the clear intent of the letter was to reject part of the claim. The insurer's decision not to cover part of the claim because the loss was not directly caused by flood damage, accompanied by instructions on how the appeal the decision was sufficient to put the insureds on notice that a part of their claim was disallowed. Because the insureds filed suit over a year later, their claim was time-barred.
