What is a Proof of Loss and Are You Required to Submit One?
Homeowners policies usually require policyholders to provide information supporting their claims and the amount of the loss, upon the insurer’s request. This document, referred to as a “proof of loss,” may require the policyholder, to set forth under oath the time and cause of the loss, identification of all who have an interest in the property, all the potential insurance that might be implicated from the loss, changes in title or occupancy during the policy’s term, specifications of damaged buildings and detailed repair estimates, an inventory of damaged personal property, and receipts for expenses incurred as a result of the loss. The information required will depend on the type of loss, damage sustained as a result of the loss, and the particular requirements of the policy.
The purpose of the “proof of loss” is to give the insurance company an adequate opportunity to investigate and to prevent fraud against the insurer before evidence of the loss becomes stale or unavailable. Lee v. Prudential Ins. Co., 812 F.2d 1344, 1346 (11th Cir. 1987).
Unless a policy explicitly states otherwise, the “proof of loss” provision is not automatically triggered in the event of a covered loss. Usually, an insurance company must request the “proof of loss” in order to enforce the provision. If a “proof of loss” is requested, policyholders must comply.
Some courts have reasoned that an insurer can waive its right to request a “proof of loss.” In Laird v. Chicago Insurance Company, Florida’s Third District Court of Appeal found that an insurance company may, by its conduct, waive its right to receive a timely “proof of loss.”
What conduct constitutes waiver?
In Keel v. Independent Life & Accident Insurance Company, the Florida Supreme Court held that an insurer that denies liability under a policy can waive its right to request a “proof of loss.”
Other circumstances may result in the insurer waiving its right to request a “proof of loss.” This blog is focused on Florida law, but every claim is factually unique and each jurisdiction is different.
As such, it is important for policyholders to consult experienced insurance professionals before submitting a “proof of loss” and in determining if they are required to comply with the particular policy provision.
Next week’s blog post will discuss whether a policyholder’s noncompliance with the “proof of loss” provision is a bar to his or her claim.
Hi Mr. Bache. I enjoyed reading your thoughts regarding "Proofs of Loss" (formally known as "SWORN STATEMENT IN PROOF OF LOSS").
Frankly, as a lay person, I view the submission of a Proof of Loss ("POL") by an insured to its insurer, as being similar to completing a loan application for a bank and listing - in detail - the various collateral (if any) to secure such a loan. THE PURPOSE OF THE POL is to give the ins. co. a "heads up" as to the purported value of a claim KNOWN AT THE TIME OF COMPLETING THE POL because - AS WE ALL KNOW - that amount is subject to change and increase subsequent to submitting an initial POL.
Again, I enjoyed reading your thought provoking blog.
SHIRLEY HEFLIN
Mr. Bache:
A proof of loss is a condition precedent to recovery of indemnity under a first party property policy. In most standard policies it must be signed under oath and provide the information required by the policy. Failure to submit the sworn proof of loss within the time required by the policy can deprive the insurer of the right to recovery of indemnity under the policy.
The proof of loss is a very important document and the obligation to submit one should not be ignored. If time is needed a request to the insurer for more time will invariably be granted.
In that regard the law is clear that the conditions relating to notice and proof of loss are conditions precedent to suit. McCormack v. N. British
Ins. Co., 78 Cal 468, 21 P 14 (1889); White et. al. v. Home
Mutual Ins. Co., 128 Cal. 131, 60 P. 666 (1900); and Basle
v. Pacific Indemnity, 200 Cal. App. 2d 207, 19 Cal. Rptr.
299 (1962); Security National Insurance v. William, 773 S.W.2d 68 (1989; Chong v. American Family Insurance Co., 2005 -Ohio- 5022 (Ohio App. Dist.6 09/23/2005; and my book "Insurance Claims: A Comprehensive Claims Guide."
The proof of loss requirement is automatically triggered by standard fire policies although modern policies amend the automatic trigger to 60 days after the insurer asks for the proof of loss.