The 5th Circuit Court of Appeals in Ekhlassi v. National Lloyds Ins. Co., 926 F.3d 130 (5th Cir. 2019) found that a lawsuit brought against a flood insurer was untimely when it was not filed in federal court within one year. In this case, the 5th Circuit Court of Appeals affirmed the District Court’s ruling that a plaintiff/insured was required to file his, her suit in federal court within one year following the denial letter even though the suit had been brought in state court. Failure to file in federal court within one year barred the claim.
In this case, the policyholder purchased a policy from Lloyds under the National Flood Insurance Program. After purchasing the policy, a rainstorm caused flooding which damaged the insured’s home. The loss was reported to Lloyds the following day. Several days thereafter, the Federal Emergency Management Agency (FEMA) issued a Notice With Waiver For Program Policyholders, extending the time within which to file a proof of loss by 180 days for claims for the flood damage related to the storm. However, the FEMA notice did not waive any other provision of the standard floor insurance policy. Specifically, the FEMA notice did not waive the policy’s one-year statute of limitations which required policyholders to bring suit within one year after the date of the written denial of the claim in federal court.