Proofs of Loss and Suit Limitation Periods: A Warning About Delaying the Filing of Proofs of Loss
Corey Harris is writing an excellent series on Proofs of Loss Issues. He is primarily focusing on the basic workings of Proofs of Loss. The point of this post is to remind everybody that there are little exceptions that vary from jurisdiction to jurisdiction regarding the filing of proofs of loss. Any public adjuster, attorney or policyholder faced with preparing and submitting paperwork needed for a proof of loss should be very familiar with the laws in the jurisdiction which is applicable.
My general rule is to file proofs of loss as soon as possible and within the time frames required under the policy. I am also aware that I vary from this rule based upon the particular matter and people involved. Often, many claims are resolved and no formal proof of loss is ever submitted because there is no request or the insurer simply waives the requirement. Still, not understanding how technical time requirements work in each jurisdiction may come back to haunt the policyholder.
A good example is in Georgia is Parris v. Great Central Ins. Co., 148 Ga.App. 277, 251 S.E.2d 109 (Ga.App., 1978) which follows the general rule that:
The insurance policy contains no express stipulation to the effect that failure to submit a proof of loss within 60 days of the loss will result in forfeiture. Nor was there an express stipulation in the policy that furnishing a proof of loss within the time specified shall be a condition precedent to the bringing of an action against the insurer. Therefore, maintenance of the suit on the policy will not be barred solely by reason of the failure to timely submit proof of loss within 60 days after the loss…
This is similar to the general rule Corey wrote in his post:
“If a policy of insurance provides that notice and proofs of loss are to be furnished within a certain time after loss has occurred, but does not impose a forfeiture for failure to furnish them within the time prescribed, and does impose forfeiture for a failure to comply with other provisions of the contract, the insured may, it is held, maintain an action, though he does not furnish proofs within the time designated, provided he does furnish them at some time prior to commencing the action upon the policy. And this has been held to be true even though the policy provide that no action can be maintained until after a full compliance with all the requirements thereof.”
Notice that tricky highlighted sentence. Georgia law shows how harsh the result can be when the full rule is provided and contemplated in terms of a short suit limitation clause:
The insurance policy contains no express stipulation to the effect that failure to submit a proof of loss within 60 days of the loss will result in forfeiture. Nor was there an express stipulation in the policy that furnishing a proof of loss within the time specified shall be a condition precedent to the bringing of an action against the insurer. Therefore, maintenance of the suit on the policy will not be barred solely by reason of the failure to timely submit proof of loss within 60 days after the loss so long as proofs of loss were furnished at least 60 days prior to the expiration of the contractual limitation period for filing. Farm Bureau Mut. Ins. Co. v. Bennett, 114 Ga.App. 623(2), 152 S.E.2d 609; … But see Harp v. Fireman's Fund Ins. Co., 130 Ga. 726(1), 61 S.E. 704 noting that in some jurisdictions, use of the word “unless” in the contract provision pertaining to “suit” is construed as a condition precedent to maintenance of suit demanding strict compliance.
This type of rule can be very harsh if there is a one year statute of limitations or suit limitation and a sixty day requirement to file a proof of loss. Thus, some states can effectively have a ten month time frame to file a proof of loss if such a rule is followed. Some require strict compliance. So, be careful and check out the state law you are dealing with regarding proofs of loss and time requirement for filing.
Greetings Chip!
I've been reading the "Proof of Loss" "written seminar" on your site lately.
It's all very basic information to those that work in the world of insurance every day for a living and may serve as a "kick in the pants" to those who may have gotten lackadaisical about filing Proofs and/or not paying attention to the time requirements governing when to file them.
That's not why I'm writing though. I'm writing, of course, on behalf of the general public (i.e., the little people who make the world go round) that may have stumbled across your Blog for (a) educational purposes, (b) or maybe they're seeking information regarding the "inner workings" of an insurance claim and a host of other reasons they may have stumbled across your Blog.
I just can't help but sit here and think about the people who are already very unfamiliar with their insurance policy terms that are feverishly flipping through the policy pages trying to ascertain what their carrier's stance is on "PROOFS OF LOSS," only to find that no such term exists in their policy handbook because the accurate and technical term for this procedure is called a "SWORN STATEMENT IN PROOF OF LOSS." Indeed, the form itself it titled "Sworn Statement in Proof of Loss."
You know what it means, I know what it means, Public Adjusters and defense counsel should know what it means, but somebody that's seeking additional information on the subject in their policy handbook may not know what it means and they are not going to find it under the section heading "PROOF OF LOSS." They're going to find it under "SWORN STATEMENT IN PROOF OF LOSS."
That's all. Other than that, it a great "refresher course" series for those that need it. :)
SHIRLEY HEFLIN
Regarding filing a POL, if the damages are known within the 60 day time period following a loss, is it a good idea to have the correctly prepared POL submitted with the claim package to be sent to the insurer?
What happens if an insured has received an advance from the insurer, and then months go by before hiring a PA, then additional claims are uncovered, what is the preferred method for filing the POL after the 60 days?
Thanks.
Mike Schultz
Claim Tech Inc.