Mansell, Engel & Cole

Couple's damage claim reversed on appeal due to time bar

Following are the material details of an insurance dispute that should resonate in uppercase with any individual or family having a bona-fide claim for damages under an insurance policy.

The bottom line in the case -- a matter recently resolved on appeal in federal court -- is that an insured can marshal truly powerful arguments in equity and law that seemingly promote a winning position, yet flatly lose a case because of one single and narrowly circumscribed factor.

And that is this: time.

Several years back, a couple's home suffered extensive damage in a flood. They promptly contacted their insurer -- Allstate Insurance Co. -- for relief, but the carrier denied their claim, stating that the bulk of damages predated the flood.

The couple sued in state court, with the matter eventually being removed to federal court owing to federal law preempting state law in matters involving flood insurance claims.

In his ruling, the judge soundly rebuked Allstate, stating that the home damage sustained owed directly to the flood and that the company's actions were "an example of the worst kind of misconduct on the part of an insurance carrier." The court awarded the couple treble (triple) damages in the case, seeking to send a deterrent message that such "bad faith denials will not be tolerated."

Any elation the couple felt in the wake of the ruling was short lived, given that the case ended up before a federal appellate court that noted it was bound to reverse the lower court's decision.

The reason: the federal law that governs insurance-related flood claims mandates that any claim commenced under its provisions must be filed in federal court within one year of an insurer's denial.

Sadly, the couple missed the requisite filing cut-off date by a few months.

And that fact alone doomed their case, stated the appeals panel, notwithstanding its merits.

The case is clearly an admonitory and manifestly instructive tale for any insured party who is thinking about filing an insurance claim.

With such matters, time is often of the essence, with tardiness triggering timing considerations that can result in a suit being barred by a relevant statute of limitations.

Proven legal counsel will pay closest attention to that and all other related matters when advocating on behalf of a claimant in an insurance dispute.

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