A Jersey City, N.J. man has filed a federalclass-action, breach-of-contract lawsuit against a group of nineinsurers he says is denying claims based on their flawed definitionof a “basement.”

 The named insurance-company defendants—all issuers offlood policies under the “Write Your Own” (WYO) program with theFederal Emergency Management  Agency (FEMA)—are New JerseyManufacturers (NJM), State Farm, The Hartford, Travelers, LibertyMutual, Selective, Assurant, Fidelity National and PhiladelphiaContributorship.

Patrick Donnelly's specific claim stems from 2011, when he had aflood policy issued under the WYO program by NJM's New JerseyRe-Insurance Co.

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

The lawsuit claims this alleged wrongful denial has occurrednumerous times to home and business owners after Irene andSuperstorm Sandy. 

The lawsuit does not detail the area of Donnelly's home that wasallegedly mischaracterized by an adjuster. 

NJM responded to the suit by saying it has no incentive to actin bad faith during the claims-adjusting process because, as a WYOcarrier, it receives a fee for every dollar paid to a homeownerunder a flood policy.