State Law Bad Faith Claims Preempted by National Flood Insurance Act, Colo. Federal Judge Rules

BOULDER, Colo. — The National Flood Insurance Act preempts bad faith claims asserted against an insurer in connection with a flood damage claim filed under a Standard Flood Insurance Policy, a Colorado federal judge has ruled, noting the policy states that federal law exclusively governs claims-handling disputes.

In a Nov. 20 order, Judge R. Brooke Jackson of the U.S. District Court for the District of Colorado further noted that all seven circuit courts that have addressed the issue have found that such claims are preempted by the NFIA.

A commercial building in Estes Park, Colo., owned by James Durward …