Azoulay v. Allstate Insurance Co.
Even if an insurance agent claims that they are covered, insureds with standard flood insurance policies may possess the duty to know the policy terms, because the policies are codified under federal law. Allegedly, the plaintiff homeowner, Moshe Azoulay, suffered property damage during Tropical Storm Irene, and his insurance company failed to reimburse Azoulay for approximately $38,083 in damages to his air conditioning, fence, walkway, driveway and patio. Azoulay filed suit in Stamford Superior Court, and his insurance company removed the suit to District Court. Azoulay filed a motion to amend his complaint, to allege that his former insurance agent, David Gonzalez, assured Azoulay he would be covered in the event of a flood. The defendant insurance company objected to the motion to amend, to add a count alleging misrepresentation. The National Flood Insurance Program, which was created in 1968, is administered by FEMA, the Federal Emergency Management Agency, and supported by the federal treasury. In Jacobson v. Metro. Prop. & Cas. Ins. Co., a 2012 decision, the 2nd Circuit explained, "Where federal funds are implicated, the [person] seeking those funds is obligated to familiarize himself with the legal requirements for receipt of such funds." As a result, insureds with standard flood insurance policies possess the duty to know the policy terms—even if an insurance agent misrepresents the terms—because the policies are covered under federal law. "[D]espite the representations of Gonzalez in his role as an insurance agent," wrote the District Court, "plaintiff is charged with the knowledge of the terms and conditions of his coverage under his [standard flood insurance policy]." The court denied the plaintiff's motion to amend his complaint, because it would be futile to add a count against Gonzalez.