Well, folks, another hurricane season in Florida has come and gone, leaving us with nothing but a collective sigh of relief and the looming specter of potential disaster. In the spirit of commemorating the official end of hurricane season, I urge you to take a moment to reflect on your condo association’s insurance choices. Because let’s face it, nothing says “peace of mind” like a flood that wipes out your savings and leaves unit owners drowning in assessments.

Picture this: You’ve been diligently saving a few thousand bucks every month by opting for a smaller premium. Life is good until your condo transforms into a waterlogged nightmare, and you rush to make a claim, only to discover that your coverage is as substantial as a paper umbrella in a monsoon. Bravo! Did those irresistibly low premiums justify the astronomical assessment the association is about to slap on unit owners? It’s a real nail-biter, folks.

As a colleague wisely mused in 2011, “few coverages are more important than flood insurance.”1 And guess what? A decade later, it’s still the gospel truth. So, before you cozy up to those budget-friendly premiums, consider this crash course in national flood insurance wisdom.

Know What’s Insured Under the Policy:

Forget the notion that less is more – in insurance lingo, it’s more like “less is a one-way ticket to financial jeopardy.” In a literary masterpiece that rivals War and Peace in length, you must decipher whether your losses will be covered under a replacement cost or actual cash value, unravel the mysteries of policy exclusions, play detective to find the deductible amount, engage in a thrilling quest to discover the sublimits of coverage, and embark on a perilous journey to determine if any overlooked buildings need coverage and an honorable mention in the policy. It’s basically the Da Vinci Code but with more fine print and fewer conspiracy theories. At the initial stages of a claim, your insurance agent, insurance broker, and/or your public adjuster are the ones helping you decode this policy.

Understanding National Flood Insurance:

In Condominium Association Board Members and Property Managers Must Obtain Flood Insurance If It Is Available, we cautioned on lower premiums not including commonly available coverages that an association is “obligated” to secure, such as flood.2 If your policy does not have flood coverage, make sure you are securing flood insurance through the National Flood Insurance Program or the NFIP. What does this leave you with? An alphabet soup – NFIA, NFIP, SFIP, FEMA, WYO.

Congress enacted the National Flood Insurance Act of 1968 (NFIA) in 42 USC §4001 to ensure the availability of flood insurance in many areas where it is uneconomical for private insurers to offer coverage.

The National Flood Insurance Program (NFIP) allows private insurers to issue Standard Flood Insurance Policies (SFIP) on behalf of the federal government.

The Federal Emergency Management Agency (FEMA) administers the NFIP and determines the contents of the SFIP.

Usually, national flood insurance policies are FEMA-issued or WYO-issued. Write-Your-Own carriers (WYO) are private carriers that act as fiscal agents of the federal government by issuing and administering policies underwritten by the government.

Knowing whether your national flood insurance policy is WYO-issued or FEMA-issued is crucial in determining sovereign immunity and your suit possibilities in the future.

Know and Adhere to Deadlines:

Ah, deadlines – the bane of our existence. Standard Flood Insurance Policies come with deadlines and duties, and they’re not just suggestions, rather strict compliance is required. Missing your cues on proof of loss and conditions precedent to filing suit is a surefire way to become the protagonist of a financial tragedy.

The Denial or Partial Denial Process:

Now, what happens when you acquire your separate flood insurance? You follow the policy and submit the claim accordingly, but the flood claim is denied in part or entirely denied? According to FEMA:

Any policyholder insured through the NFIP has a right to appeal an insurer’s flood insurance claim denial to the agency. You must submit the appeal within 60 days after the date of the insurance company’s written denial letter. You may only appeal what the insurance company denied in the denial letter.3

Sounds straightforward, right? WRONG. Now, here’s where it gets even more entertaining. FEMA’s got a double act in flood insurance – they play both the administrator and the determinator.

When a WYO carrier makes a claim determination, a policyholder can appeal that coverage determination to FEMA. However, if FEMA disposes of the appeal, FEMA is acting in an administrative capacity – in other words, FEMA is the referee blowing the whistle but not making the final call. This is NOT considered a “disallowance” of a claim, and 42 USC §4072 is not triggered, meaning you cannot file suit against FEMA.

On the flip side, if the policy is a FEMA-issued policy and the claim is denied, FEMA is regarded as the insurer who made a claim determination, no longer playing referee, but rather a key opponent in the game.  This will be considered a “disallowance” of a claim, triggering §4072, waiving immunity, meaning you can sue FEMA directly.

Hire the Right Team:

When dealing with the National Flood Insurance Program, remember the opponent is federally funded, federally regulated, and the rules are stricter than your grandma’s curfew. Sanz, bless his heart, learned the hard way.4 In Sanz, the insureds failed to submit a proof of loss. The policy required one, but Sanz was not provided one, the insurer continued to process his claim despite not submitting one, and the insurer repeatedly assured him that all necessary forms were filed. However, the Eleventh Circuit was unmoved and ruled that:

[T]he insured must adhere strictly to the requirements of the standard federal flood insurance policy before any monetary claim can be awarded against the government.


Sanz’ failure to file a proof of loss within 60 days without obtaining a written waiver of the requirement eliminates the possibility of recovery.


In this case, Sanz has failed to allege any misconduct on the part of Security that rises to the level necessary to overcome the obstacles to equitable estoppel. The fact that Security failed to inform Sanz of the proof of loss requirement is insufficient to establish liability. Indeed, the applicable regulations state specifically that Security is not required to provide Sanz with a proof of loss or assist him in filling one out. See 44 C.F.R. § 61, App. A(1), art. 9J(6). Even assuming Sanz’ allegation that Security informed Sanz that he had filled out all the necessary paperwork and that Security would ‘take care’ of his claim, equitable estoppel remains unavailable.

The lesson here? Hire the Avengers of insurance agents, public adjusters, experts, and attorneys. You’re going to need them to navigate through the intricacies of national flood insurance.

In conclusion, dear condo associations, let’s not let the end of hurricane season be the end of our vigilance. It is important to discuss your flood coverage with an experienced and qualified insurance agent or risk manager to make certain that you have proper coverage.

1 National Flood Insurance Program to be Extended Again, Merlin Law Group Blog post by Corey Harris on December 5, 2011.

2 Merlin Law Group Blog post by Chip Merlin on June 25, 2018.

3 https://www.floodsmart.gov/how-do-i-start-my-flood-claim

4 Sanz v. U.S. Sec. Ins. Co., 328 F.3d 1314 (11th Cir. 2003).