The dwelling policy written under the National Flood Insurance Program contains the following pertinent provision under Article VIII: "P. Mortgagee Obligations: If the insured fails to render proof of loss, the named mortgagee (or trustee), upon notice, shall render proof of loss in the form specified within 60 days thereafter and shall be subject to the provisions of this policy relating to appraisal and time of payment and of bringing suit."

Equally important, Article VIII provides, under paragraph G, that: "With respect to any mortgagee (or trustee), named in the declarations form attached to this policy, this insurance shall continue in force only for the benefit of such mortgagee (or trustee) for 30 days after written notice to the mortgagee (or trustee) of termination of this policy, and shall then terminate."

Insureds failed to renew their flood insurance within the 30 day grace period allowed for receipt of payment by the Federal Emergency Management Agency. Accordingly, they had no coverage when their property was severely damaged by flood shortly after the expiration date.

FEMA notified both the insureds and the mortgagee of the termination of the coverage. Although the mortgagee was covered for 30 days after receiving the notice, it failed to submit proof of loss within the 60 day period mandated by the policy. FEMA had unequivocally denied by letter a claim made by the insureds, and sent a copy of the letter to the mortgagee. More than 60 days elapsed between the mortgagee's receipt of that notice and its submission of proof of loss.

Accordingly, a federal court found the mortgagee's proof of loss untimely and allowed FEMA's motion for summary judgment. There was no recovery under the policy.

ROCKLAND FEDERAL CREDIT UNION, Plaintiff v. FEMA ET AL., Defendants. United States District Court for the District of Massachusetts. No. 93-1600-RCL. May 13, 1994. CCH 1995 Fire and Casualty Cases, Paragraph 5030.