New York's two senators are asking that the Federal Emergency Management Agency give homeowners in the state hard hit by Superstorm Sandy more time to file suits seeking more money from their insurance carriers.
The senators, Democrats Charles E. Schumer and Kirsten E. Gillibrand, say in a letter that few Sandy victims know that there is a year deadline for them to file suit challenging the settlements proposed by their insurers for repairing damage from the storm.
The letter was written at the request of consumer advocates.
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Homeowners want more time "to hold accountable insurance companies for short-changing them," the senators said in a statement about a letter they have written to FEMA dealing with the issue.
"Many families don't even know they may need to take legal action, but may soon lose that right anyway," the letter said.
The letter said that current FEMA guidance provides that the one-year statute of limitations period to file suit runs from the date of the "first" written denial of a flood insurance claim.
The letter claims that, "Not only is that interpretation not consistent with the governing statute and the terms of the Standard Flood Insurance Policy, but combined with relief granted by FEMA to Sandy victims extending the deadline for submitting proof of loss statements, could leave homeowners in a 'catch-22': 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."
The letter said that FEMA has "reportedly maintained" that the extension of the proof of loss deadline did not affect the statute of limitations.
"But many thousands of homeowners received a first written response on their claim within one or two months following Superstorm Sandy," the letter said.
"That means that potentially thousands of households that submit a proof of loss within the extended deadline for Sandy claims – April 29, 2014 – will nonetheless be time-barred from any legal recourse when they dispute the insurer's decision with respect to that proof of loss, because the decision will have occurred more than one year following" the claim.
The letter said if left unremedied, the statute of limitations period as interpreted by FEMA "will render the well-intentioned FEMA proof of loss extension meaningless."
The letter contended that FEMA's current guidance "may have the unintended effect of providing shelter for insurance companies while leaving recovering New Yorkers out in the cold.
"Clarifying this issue will also have the salutary effect of avoiding many unnecessary lawsuits by giving victims more time to negotiate with their flood insurers without risk that their claim will become time-barred," the letter said.
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