Strict Conditions Doom Flood Insurance Claim

The National Flood Insurance Program has been controversial to say the least. Part of the program allows commercial insurance companies to act as agents for the federal government in producing Standard Flood Insurance policies and managing claims under a write your own program (“WYO”). The program, under its enabling law, the National Flood Insurance Act, requires a sworn proof of loss as a condition precedent to coverage. In a recent case, the Ninth Circuit addressed whether a WYO carrier was estopped from denying a claim where the policyholder did not file a sworn proof of loss for the full amount claimed.

In Surfsand Resort, LLC v. Nationwide Mutual Fire Insurance Co., No. 18-35607 (9th Cir. Nov. 18, 2019) (Not for Publication), the policyholder claimed that the insurer owed it a substantial payment under its flood insurance policy. The insurer only paid the lesser amount of the claim for which the policyholder submitted a sworn proof of loss. The district court