Proof of loss deadline extended for Sandy victims

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“This critical extension is the right thing to do, and will provide Sandy-impacted homeowners who are still piecing their lives back together the necessary time to enable them to file flood insurance claims that fully reflect all of their losses,” Gillibrand said.

While the proof of loss extension is beneficial to many homeowners who have struggled throughout the insurance process, local attorney Denis Kelly said that the extension creates a “hidden danger,” in that it does not nullify the statue of limitations — the deadline to file a lawsuit against the insurance company protesting the amount awarded — and could cause confusion if the two overlap.

Kelly said that the statue of limitations for filing lawsuit expires a year from the date of first denial by the insurance company — but that date can be difficult to determine. Some people received denial letters from their insurance companies, and can easily pinpoint that date. Others who are contesting their settlements, however, were never denied; they simply were not satisfied with their reimbursements, and for them that one-year date can be difficult to determine. He added that the denial did not have to be a full denial; partial denials start the clock on the statute as well.

“It’s wonderful that the proof of loss is extended one more time; it alleviates some stress for the homeowners who haven’t been able to get [the information] together to submit,” Kelly said. “However, they really need to make sure that their statute of limitations hasn’t passed.”

Last October, Schumer unsuccessfully pressed FEMA to change the statute of limitations deadline to a year from the final denial, rather than the initial denial. He said that, with the proof of loss deadline extended, homeowners would be forced to file suit protesting their insurance payout, before they knew what the final number would be.

Kelly said that, while the majority of affected homeowners have submitted these documents already — he has more than 200 clients with pending court cases against insurance companies — some damaged houses have yet to be repaired. He said that for those who have not been able to take care of this yet, now is the time to act, before it’s too late.

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