When the owner of a home with a history of seasonal flooding from a nearby creek returned to the home after an extended vacation, he noticed damage to the
home from flooding. Soon after that, he made an insurance claim on a policy administered by an insurance company under the National Flood Insurance Act.
The policy required the owner to promptly file a proof of loss when making a claim. As was also required by federal regulations, the proof-of-loss statement had
to include the amount claimed under the policy, or, to be precise, “Specifications of damaged holdings and detailed repair estimates.”
In what was a critical mistake, the owner had not specified monetary damages but, instead, had simply listed the value of the loss as “undetermined.” When the
insurance company then wrote the owner a letter rejecting his claim under the policy, that decision was upheld by the court.
The oversight or error by the property owner may seem to have caused an unduly harsh result, but the court stressed some overriding principles that
distinguished the situation before it from private insurance disputes. Where federal funds are involved, as they are for insurance policies in the National Flood
Insurance Program, the person seeking those funds is obliged to familiarize himself with the legal requirements for receipt of the funds. Protection of federal
money requires that those in the position of the insured owner act with “scrupulous regard” for the requirements of the law.