From the January 2013 issue of Property Casualty 360 — National Underwriter • Subscribe!

Class-Action Flood Suit Filed Over Definition of ‘Basement’

A Jersey City, N.J. man has filed a federal class-action, breach-of-contract lawsuit against a group of nine insurers he says is denying claims based on their flawed definition of a “basement.”

 The named insurance-company defendants—all issuers of flood policies under the “Write Your Own” (WYO) program with the Federal Emergency Management  Agency (FEMA)—are New Jersey Manufacturers (NJM), State Farm, The Hartford, Travelers, Liberty Mutual, Selective, Assurant, Fidelity National and Philadelphia Contributorship.

Patrick Donnelly’s specific claim stems from 2011, when he had a flood policy issued under the WYO program by NJM’s New Jersey Re-Insurance Co.

After Hurricane Irene, Donnelly filed a flood claim but was sent a denial letter from FEMA last February based on what the suit calls an “erroneous classification of the lowest floor of [Donnelly’s] building as a ‘basement.’” 

The lawsuit claims this alleged wrongful denial has occurred numerous times to home and business owners after Irene and Superstorm Sandy. 

The lawsuit does not detail the area of Donnelly’s home that was allegedly mischaracterized by an adjuster. 

NJM responded to the suit by saying it has no incentive to act in bad faith during the claims-adjusting process because, as a WYO carrier, it receives a fee for every dollar paid to a homeowner under a flood policy.

Comments

Resource Center

View All »

Complimentary Case Study: Helping achieve your financial goals By:...

Find out how a Special Investigation Union used TLOxp to save the company money and...

Do Your Clients Hold The Right CDL License?

Learn about the various classes of CDL Licenses and the industries that are impacted by...

Integrated Content & Communications: A Key Business Issue For Insurers

Insurers are renewing their focus on top line growth, and many are learning that growth...

High Risk Insurance Coverage in the E&S Market

Experts discuss market conditions, trends and projected growth in a rapidly changing niche.

Top E-Signature Security Requirements

This white paper covers the most important security features to look for when evaluating e-signatures...

EPLI Programs Crafted Just For Your Clients

Bring us your restaurant clients, associations and other groups and we’ll help you win more...

Is It Time To Step Up And Own An Agency?

Download this eBook for insight on how to determine if owning an agency is right...

Claims - The Good The Bad And The Ugly

Fraudulent claims cost the industry and the public thousands of dollars in losses. This article...

Leveraging BI for Improved Claims Performance and Results

If claims organizations do not avail themselves of the latest business intelligence (BI) tools, they...

Top 10 Legal Requirements for E-Signatures in Insurance

Want to make sure you’ve covered all your bases when adopting e-signatures? Learn how to...

PropertyCasualty360 Daily eNews

Get P&C insurance news to stay ahead of the competition in one concise format - FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.