Irving insurance attorneys know that an insured is responsible for knowing what is in their policy. Courts have also ruled that insureds are responsible for knowledge of certain areas of the law. A Federal, Galveston Division opinion is a good read to understand this imputed knowledge. The opinion is styled, Danuta Lobeck v. Tina M. Licatino, et al.
The basic premise of each of Lobeck’s claims, when considered under relevant law, makes any lengthy summary of the facts in the light most favorable to Lobeck a waste of time. In a nutshell, Lobeck bought property that, unknown to her, was located within the boundaries of the Coastal Barrier Resources System. Lobeck’s mortgage loan required her to maintain flood insurance on the property so she innocently procured an SFIP through these Defendants. The policy was subsequently reissued and then renewed the following year. During the renewal year Hurricane Ike completely destroyed the building on the property and only then was Lobeck informed that her policy was void and had never afforded coverage. She received nothing for her property damage. Consequently, Lobeck filed suit against, inter alios, these Defendants alleging that they knew or should have known that the property was ineligible for flood insurance under the NFIP, that the policy was void when issued, and that the policy offered absolutely no coverage. According to Lobeck, the express and implicit misrepresentations of these Defendants, upon which she ignorantly, but reasonably relied, caused her losses.
The United States Supreme Court held that all citizens are charged with the knowledge of the law regarding federal insurance programs, like the NFIP. The Supreme Court has held that citizens seeking to benefit from a federal benefit program, like the NFIP, are charged with familiarizing themselves with the requirements of that program “and may not rely on the conduct of government agents contrary to the law.” The Fifth Circuit declared that a prospective SFIP holder cannot rely on a WYO’s representations to determine a property’s SFIP insurability, but instead has his own duty to determine whether its location in the CBRS disqualifies it. The Court has held that under this reasoning any reliance by a Plaintiff on misrepresentations of private insurance agents regarding the scope of coverage afforded by an SFIP are unreasonable as a matter of law and, therefore, cannot raise a genuine issue of material fact to avoid summary judgment.
In applying these cases to the facts in this case Lobeck’s claims could never succeed. Even assuming Lobeck had no actual knowledge of any of the impediments to her procurement of a valid SFIP on her property, the law precludes her from using it to her advantage. She is presumed to know the law. As a result, before Lobeck brought the property she “knew” that to purchase a valid SFIP the intended property had to be outside the barriers of the CBRS. Nevertheless, she bought property she “knew or should have known” was within the CBRS and as a result uninsurable. Then she applied for an SFIP she “knew or should have known” would be invalid if and when issued.She, therefore, “knew or should have known” that when she received the SFIP from Fidelity it was void and provided no coverage. As a legal consequence of Lobeck’s constructive knowledge she cannot fault others for their negligent or fraudulent misrepresentations resulting in the absence of insurance coverage or hold them accountable for her losses.
In summary, all of Lobeck’s claims require her to establish an element of reasonable reliance on some sort of misrepresentation of insurability by these Defendants, but under the applicable case law any such alleged reliance would be “unreasonable as a matter of law” and the claims, while not precluded per se, cannot ever prevail.