Assisting clients throughout the Gulf Coast region, Nielsen & Treas, LLC, brings extensive knowledge to cases involving the National Flood Insurance Program (NFIP). One noteworthy case in which Nielsen & Treas, LLC, achieved a successful result was Construction Funding, LLC v. Fidelity National Indemnity Insurance Co.
This coverage dispute came about after Hurricane Isaac that occurred on August 28, 2012. Construction Funding was the holder of a Standard Flood Insurance Policy (SFIP) insuring a commercial building in Mandeville, LA. Construction Funding made a claim under its SFIP. Fidelity inspected the property and determined that the damage from Hurricane Isaac that was covered under the SFIP was $5,266.81. Construction Funding had a high deductible of $5,000 which meant Fidelity’s payment for the covered damage was $266.81. A large portion of the flood claim was denied because the inspection revealed that little if any repairs had been made to the property that were paid for and included in the flood claim payment for a prior loss in 2005 resulting from Hurricane Katrina.
Article VII(K)(2)(e) of the SFIP provides that an insured must produce evidence of prior flood repair when asked to do so. Fidelity requested proof of prior repairs. Federal law prohibits payment for the same damages twice. Construction Funding failed to produce proof of prior repairs and instead submitted a proof of loss in the amount of $76,218.01 with no supporting documentation. Fidelity rejected this proof of loss because it was not supported with any documentation.
Fidelity moved the federal district court for summary judgment because the insured failed to meet all of the conditions precedent prior to filing suit including providing proof of prior repairs and failure to submit a timely and complete proof of loss with supporting documentation. The Court ruled in favor of Fidelity holding that Construction Funding did not comply with the policy provisions in submitting a proper proof of loss and that it failed to provide any information whereby Fidelity or FEMA could evaluate the merits of the claim.
