FEMA Says Hands Tied by Statute; Cannot Extend Sandy Lawsuit Deadline

BY ARTHUR D. POSTAL, PROPERTYCASUALTY360.COM

November 22, 2013

The Federal Emergency Management Agency says it cannot extend the one-year deadline for filing lawsuits related to final settlements for Superstorm Sandy claims.

New York’s two senators and Rep. Peter King, R-N.Y. had asked FEMA to extend the deadline, with Sens. Charles Schumer and Kirsten Gillibrand, D-N.Y., asking in a letter for the 12-month period to begin after homeowners had exhausted appeals and received final settlements.

However, in a memo from James Sadler, FEMA director of Claims for the National Flood Insurance Program, says the agency is governed by law in mandating that homeowners must sue within one year of a written denial.

In a statement, King objected. He said, “Failing to provide an extension of the statute of limitations period will deny due process to Sandy survivors who are still struggling to rebuild and continue to uncover losses to their properties.”

In their Oct. 21 letters to FEMA administrator Craig Fugate, Schumer and Gillibrand contended that FEMA beginning the one-year deadline from the first written denial of a flood claim is “not consistent with the governing statute and the terms of the standard flood insurance policy.”

But, a FEMA spokesman says the senators’ contention is wrong, and that FEMA is following the law.

The members of Congress say the FEMA policy “could leave homeowners in a catch-22,” that is, “Hurry up and file a lawsuit, which would require submitting a proof of loss and thus making FEMA’s proof of loss extension meaningless; or wait to submit a proof of loss and obtain a final determination and hope that the court overrules FEMA’s interpretation of the statute of limitations.”

Sadler’s memo, though, says that unlike the standard flood insurance policy proof of loss deadline, which FEMA can extend because it has authority to interpret the law, “FEMA cannot extend the time limit for NFIP insureds to bring a lawsuit.”