Legal Question in Insurance Law in Georgia

My question involves insurance law for the state of: Georgia

I own a National Flood Insurance Policy through Nationwide. In 2004 my lower floor was flooded and after filing a claim I received a payout of $12,000.

Oct. 2009, my lower floor flooded again. However this time the adjuster decided that since there is a 2-inch drop some of my lower floor should be classified as a "basement" and not a "walkout."

I accept that the insurance company seems to have beaten me with a technicality and that some of my lower floor is indeed classified as a basement. For this reason the adjuster determined I should only receive $3,000 for this flood.

However, now Nationwide is threatening to "refile" the claim from 2004. They want everything redone with the "basement" standard and want money BACK from a claim that was paid out over 5 years ago.

Is this legal? Isn't there some sort of statue of limitations that would apply in this matter? I highly doubt they can bill me for money I received in 2004, but I am afraid they may not pay me the 3,000 I am owed for my current claim based on the 2004 issue.


Asked on 11/03/09, 2:48 pm

2 Answers from Attorneys
Yasha Heidari Heidari Power Law Group, LLC

There are a few facts you should keep in mind:

(1) Insurance contracts are construed strictly against insurance companies. Accordingly, I personally wouldn't be so willing to acquiesce to the fact that your first floor is a basement as opposed to a walkout.

(2) Georgia has a doctrine known as the voluntary payment doctrine. It will be extremely difficult for the insurance company to seek reimbursement for the $12,000 they have paid you.

(3) I would recommend writing the insurance company a demand letter for the payment they owe you to put them on notice.

Feel free to e-mail me if you require more assistance or need help with the demand letter.

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Answered on 11/08/09, 3:12 pm
Ronald Arthur Lowry Ronald Arthur Lowry

I agree generally with what Mr. Heidari said. In addition, there are penalty statutes that apply when insurers reject legitimate claims, particularly with frivilous defenses. The penalty can be as high as 50% of the covered claim plus they could have to pay your attorney fees. I think it would be better to hire a lawyer now and get him to write the demand letter and include the language that triggers those penalties and potential attorneys fees. Also, the letter must be sent certified. Good luck.

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Answered on 11/09/09, 3:22 pm


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