NFIP Preempts Fraud, Misrepresentation Claims Against SFIP Insurer, 3rd Cir. Affirms

PHILADELPHIA — Fraud and misrepresentation claims asserted by a policyholder against the issuer of a Standard Flood Insurance Policy are preempted by the National Flood Insurance Program and cannot be refashioned as claims under federal common law in order to escape preemption, a federal appeals court has held.

On June 16, the 3rd Circuit U.S. Court of Appeals upheld an award of summary judgment to the insurer in a Hurricane Irene flood damage action, explaining that it “would frustrate the intent of Congress to allow preempted state law claims to proceed under the guise of federal common law.”

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