This action arises from a coverage dispute over a flood insurance policy issued under the National Flood Insurance Program. Per federal law, these policies must conform to the requirements of the Standard Flood Insurance Policy (“SFIP”). Among other requirements, insureds must submit a proof of loss that conforms to SFIP standards. After the insurer denied coverage in this case, the insured sued for breach of contract and bad faith. The insurer moved for summary judgment.
As to the bad faith claim, the insurer argued that its coverage denial was based on the insured’s failure to submit a proof of claim conforming to SFIP guidelines. The Court accepted this argument, finding, among other things, that the insured’s proof of loss was “so confusing as to be impossible to process….” The Court further found “[the insured’s] Proof of Loss submission is incomprehensible and does not comply with the requirements of the SFIP.” Thus, the denial was not a breach of the insurance contract. As to bad faith, the Court found: “This Court has just ruled in favor of [the insurer] on Plaintiff’s breach of contract claim. Given that, Plaintiff cannot prove a bad faith denial of coverage.”
Date of Decision: May 8, 2018
Uddoh v. Selective Insurance Company, United States District Court, District of New Jersey, Civil Action No. 13-2719 (SRC), 2018 U.S. Dist. LEXIS 77075 (D.N.J. May 8, 2018) (Chesler, J.)
This case was affirmed by the Third Circuit on May 13, 2019. A copy of that opinion can be found here.