The homeowner claimed the agent had “assured” him that if his property was flooded, “the damages inside and outside of [his] home would be covered under that insurance” and that the agent had “misrepresented to the [homeowner] the extent of his coverage.”

Allstate opposed the motion, asserting that the proposed amendment to add its agent was futile under the law governing the homeowner's participation in the National Flood Insurance Program (NFIP).

The Court's Decision

The court denied the homeowner's motion to amend the complaint, saying insureds with coverage under SFIPs have a duty to know the details of these policies regardless of misrepresentations allegedly made by the insurer and its agents, because the policies are codified under federal law, thereby giving policyholders constructive notice of the terms.

Accordingly, despite the alleged representations of Allstate's agent, the homeowner was “charged with the knowledge of the terms and conditions of his coverage under his SFIP,” and any claim against the agent alone was “futile,” the court concluded.

The case is Azoulay v. Allstate Ins. Co. in U.S. District Court in Connecticut.

FC&S Legal Comment

Other circuit and district courts also have held that NFIP insureds may not reasonably rely on representations by an agent or broker, as the provisions of the SFIP are controlling.