Property Insurance Coverage Law Blog : Florida Insurance Lawyer & Attorney : Merlin Law Group Law Firm : Tampa, Houston, Coral Gables, Gulfport

In Ocean View Towers Ass'n, Inc. v. QBE Ins. Corp., 11-60447-CIV, 2011 WL 6754063, *9 (S.D. Fla. Dec. 22, 2011), a South Florida condominium association suffered substantial damage to its property in 2005 from Hurricane Wilma. Immediately after the storm, the association notified its insurance company, QBE, and QBE conducted an investigation of the loss. The association cooperated with all requests put upon it by QBE, including notice of the loss, a reasonable description of the damage, keeping an accurate record of all repair expenses, and disclosure of books and records QBE requested. QBE issued payment of $125,312.09 in 2006, which represented the damage QBE found less the policy deductible. In 2010, the association hired a public adjuster who found approximately $4-5 Million in damage to the property. Without notifying QBE of the newly found damage or submitting a supplemental claim, the association filed suit against QBE for breach of contract.

QBE alleged that the association had the responsibility to file a supplemental claim and comply with the “Duties In The Event Of Loss Or Damage” provision of the policy a second time for the newly discovered damage. QBE argued that the alleged failure to comply with the required duties a second time was a material breach of the policy by the association that precluded recovery. The association moved for summary judgment on this issue.

Here, QBE argues that Ocean View failed to notify it of the additional claimed damages prior to filing suit and that there is at least an issue of fact as to whether Ocean View provided prompt notice to the insurer of the claimed damages. The Court finds Ocean View did all that the policy demanded of it.
…
In short, the policy required Ocean View to provide prompt notice of the “loss or damage.” It did so by informing QBE of the Hurricane Wilma “loss.” The insurance contract required no more. QBE had a full and fair opportunity to investigate the damage from the windstorm loss and to request additional information from Ocean View, but failed to fully do so. [citation omitted] Absent such, Ocean View was under no obligation to give QBE notice of the additional claimed damages before filing suit. While it may not make sense to QBE that an insured can submit notice of a loss, receive payment for claimed damages, and then years later run into court claiming millions of dollars in additional damages, that is not this Court's concern. [citation omitted]. This Court is obliged to enforce the plain policy language as written. [citation omitted]. Therefore, the Court must grant Ocean View's motion of summary judgment as to QBE's second affirmative defense. [emphasis added].

Judge Scola’s written opinion sends a strong message to insurance companies to get it right the first time. The opinion also addressed several other issues, such as matching and ACV/RCV payments, which will be addressed in upcoming articles. This is a federal trial court opinion, therefore not binding authority on other courts, and consultation with legal professionals is advised before pursing a similar course of action.

The South Dakota Supreme Court explained the reasoning behind the “notice-prejudice rule” in Auto-Owners Insurance Company v. Hansen Housing, Inc.:

The modern view of notice requirements focuses on the purpose for the requirement and realizes that it is not to provide a technical escape hatch to allow the insurance company to deny coverage. The modern view does not belittle the need for notice to the insurer, but instead puts the notice requirement in its proper perspective. “The clear purpose of the notice provision is to protect the ability of the insurer to prepare a viable defense by preserving its ability fully to investigate the accident.” (Citation omitted.)

604 N.W.2d 504 (S.D. 2000).

Unfortunately for policyholders in Florida, Florida courts have not followed suit.. Instead, Florida courts place the burden on the policyholder to prove the insurer was not prejudiced by late notice.
In American Fire & Casualty Company v. Collura, Florida’s Second District Court of Appeal held that the claim will not be barred for the policyholder’s failure to submit timely notice, but the Court also stated the burden was not on the insurer to prove prejudice. 

In Florida, if notice of a claim is untimely, then a presumption of prejudice exists. This means the burden is on the policyholder to prove the untimely notice did not prejudice the insurer’s investigation of the claim. Id. It is akin to the “notice-prejudice rule” in not barring recovery, but is different because it places the burden on the policyholder to prove that prejudice did not result from the untimely notice.

From the policyholders’ perspective, the “notice-prejudice rule” has it right because it focuses on the purpose and intent of the notice provision. If a policyholder fails to give timely notice of a claim, and this tardiness results in spoliation of evidence or the inability to discover pertinent information, the insurer may have the right to deny the benefits due under the policy. On the other hand, if no prejudice ensues, the claim should not be barred.

The law is ever changing and the law is different from jurisdiction to jurisdiction. To protect your interests under the policy, policyholders need to comply with all the duties under their policy, including the notice provision to the best of their ability.

Every insurance policy imposes certain conditions on coverage. Generally, conditions impose certain duties on the insured in order to obtain coverage. In most cases of property damage coverage, policies require that the insured provide timely notice of the loss. In instances where a loss is not discovered immediately, such as in this landlord-tenant scenario, it’s good to know that coverage is still possible in California. California Courts follow the "notice-prejudice rule."

The “notice-prejudice rule" has been construed and used in many contexts when it comes to conditions of coverage. However, it pertinently states that unless an insurer can demonstrate actual prejudice from late notice, the insured’s failure to provide timely notice will not defeat coverage. Northwestern Tile Secur. Co. v. Flack (1970) 6 CA3d 134, 141-143; Downey Sav. & Loan Ass’n v. Ohio Cas. Ins, Co., (1987) 189 CSA3d 1072, 1088-1089. Therefore, if an insured can show that the insurer is no worse off at the time of giving notice upon the insured’s discovery, the delay may be irrelevant. Arguably, there may be a good chance that policy coverage will apply.
Over time, this "notice-prejudice rule " has been flipped where an insurer may deny coverage on the basis of the insured’s refusal to cooperate if it is substantially prejudiced by the refusal to provide material information. Othman v. Global Indem. Co. (9th Cit. 1985) 759 F2d 1458, 1465.

Although all policies are different, where some are based on claims made and others on when claims are reported, the "notice-prejudice rule" does not extend the time for reporting claims to the insurer under a "claims made and reported" policy. Such policies only cover claims reported to the insurer during the policy period. Timely reporting of the claim is the event that triggers coverage, and this condition is enforceable according to its terms. Pacific Employers Ins. Co. v. Sup. Ct. (1990) 221 CA3d 1348, 1356.

Although the "notice-prejudice rule" protects an insured from a delay which does not prejudice an insurer, in California, when homeowner’s policies which may shorten a statute or requirement to file suit, the "notice-prejudice rule" may not be used to extend contractual limitations on filing suit which are designed to promote justice by preventing stale claims.

What we must take away from the "notice-prejudice rule" is that in California, insureds may have a little leeway for short or inconsequential delays. But where an insured purposefully refuses to cooperate under the conditions of a policy in providing material information, or reports a claim beyond the statue or policy period, that protection will not be granted.

It is no surprise that insurance defense attorneys and even some judges have latched on to this sentence fragment. Unfortunately, it means legitimate insurance claims may not get paid. Thankfully, not all courts are finding that Kroener creates a per se cutoff of two years and two months for insurance claims. In Banta Properties, Inc. v. Arch Specialty Ins. Co., 10–61485–CIV, 2011 WL 5928578 (S.D. Fla. Nov. 23, 2011), the insurance company argued that Kroener barred the policyholder’s claim because it was brought too late, but the United States District Court for the Southern District of Florida disagreed.

Arch cites Kroener v. Fla. Ins. Guar. Ass'n, 63 So.3d 914, 916 (Fla. 4th DCA 2011), for the proposition that an insured's notice to its insurer two years and two months after an event giving rise to a claim makes notice untimely per se. … Most Florida courts, however, consider timeliness an issue to be decided on the circumstances of each case and do not set a per se bar on timeliness. See Renuart–Bailey–Cheely Lumber & Supply Co. v. Phoenix of Hartford Ins. Co., 474 F.2d 555, 558 (5th Cir.1972)5; see also Employers Cas. Co. v. Vargas, 159 So.2d 875, 877 (Fla. 2d DCA 1964); Laster v. U.S. Fid. & Guar. Co., 293 So.2d 83, 86 (Fla. 3d DCA 1974). The former Fifth Circuit, interpreting Florida law, found that a delay of four years was not untimely as a matter of law. See Phoenix of Hartford, 474 F.2d at 558. This Court agrees that there is no per se timeliness bar for filing a notice of a claim and that notice must be considered under the circumstances.

Unfortunately, not all courts have read Kroener the same way as the Southern District. There are currently at least three appeals pending before the Fourth District Court of Appeal in Florida that involve this issue: Kramer v. State Farm Florida Ins. Co., 4D10-3978; Stark v. State Farm Florida Ins. Co., 4D10-4945; and Slominski v. Citizens Prop. Ins. Corp., 4D10-4372. In each of these cases, it appears that the courts held that the policyholders’ insurance claims were barred for being too late under Kroener. The policyholders have appealed those decisions and have advanced several arguments: Kroener does not overrule existing Florida Supreme Court precedent; Kroener only applies to assignments of insurance claims; and that a rebuttable presumption of prejudice is the appropriate standard used to determine “late notice” cases. These appeals mean that Kroener will likely not be the last word on the subject of notice of insurance claims. We will post new decisions about this important issue as they are released.

With respect to the rebuttable presumption of prejudice, the Banta Properties Court went further to explain how this standard is applied. For more on rebutting the presumption of prejudice in late notice cases, check this blog in the upcoming weeks.

In a recent case out of Alabama, American Western Home Ins. Co. v. Reese, 10-516-CG-N, 2011 WL 5037382 (S.D. Ala. Oct. 20, 2011), the court explained how Alabama courts determine whether the notice given of property damage was prompt or not:

[U]nder Alabama law there are only two factors to be considered in determining the reasonableness of a delay in giving notice to an insurer: the length of the delay and the reasons for the delay. Haston v. Transamerica Ins. Services, 662 So.2d 1138, 1141 (Ala.1995) (quoting Southern Guar. Ins. Co. v. Thomas, 334 So.2d 879, 883 (Ala.1976)). If there are disputed facts, “the question of the reasonableness of a delay in giving notice is a question of fact for the jury.” Id. However, “if there is no reasonable excuse offered for a delay in giving notice, the issue may be decided as a matter of law.”

In Reese, the policyholder gave notice of Hurricane Katrina damage in 2005, for which the insurance company paid approximately $25,000. The policyholders apparently disagreed with this amount, but felt they had no other choice but to accept the amount the insurance company was willing to pay. The policyholders took the money. They completed repairs to the property in 2006 at a cost of approximately $275,000. About two and a half years later, the policyholders notified the insurance company of the additional damages and expenses that the insurance company’s adjuster missed in 2005.

The insurance company denied benefits for these additional expenses and litigation ensued. When the court questioned why it took the policyholders two and a half years to report the damage and extra expenses to the insurance company, the policyholders argued they did not discover the full extent of the damage until long after the storm. The court reasoned that even if that were true, the policyholder had discovered and repaired all damage in 2006 and “offered no excuse for the delay, reasonable or otherwise.” The court then held that this delay was unreasonable as a matter of law, and denied benefits to the policyholder based on late reporting and other reasons.

Had the policyholders contacted professionals for assistance with the claim in 2006 when they realized the damage and repairs were more extensive and costly than the insurance company was willing to pay, there may have been a different outcome to the case. If you have or know of a dispute over an amount of damage to property from a hurricane or other cause, please seek professional assistance before it is too late.

A recent opinion from the Fourth District Court of Appeal in Florida, Kroener v. FIGA, No. 4D09-3604 (Fla. 4th DCA June 22, 2011), does not discuss the Florida Supreme Court’s rebuttable presumption test from Macias and instead holds that:

[A]s a matter of law, notice to the insurer of a claim of loss more than two years and two months after the loss occurred was not prompt notice; the untimely reporting of the loss violated the insurance policy and was sufficient to bar the claim. (emphasis added)

There is no mention in the opinion of the Florida Supreme Court’s rebuttable presumption test or why it was not applied. However, there is one distinguishing fact of the case that makes it different from many late reported claims.

In Kroener, the claim involved damages from Hurricane Wilma, which hit on October 24, 2005. The Kroeners purchased the house involved in the claim on April 10, 2007. The prior owners never made a claim under the policy for the Hurricane Wilma damages they were purportedly aware of. Sometime after the sale, the Kroeners discovered a roof leak, which their contractor attributed to Hurricane Wilma. The prior owners signed an Assignment of Benefits form on December 5, 2007, which directed their insurer to pay to the Kroeners any and all insurance benefits for all coverage periods available under the policy they had with Atlantic Preferred. Thereafter, the Kroeners filed a claim with Florida Insurance Guaranty Association (FIGA) for the Hurricane Wilma damage, as Atlantic had become insolvent, and FIGA had been appointed its successor in interest.

This assignment appears to have been the distinguishing detail for the Fourth District. The Court noted that

“[A]ny authorized benefits that had arisen under the policy during the time of the prior ownership of the property could be assigned.”

The Court concluded in the pertinent part that:

[T]he Kroeners did not receive any claims through the previous owners’ assignment because there were no claims timely made by the previous owners to assign.

It seems that the Court viewed the prior owners’ failure to present a claim to Atlantic Preferred fatal to the assignment of benefits that the parties executed after the sale. Oftentimes, there are numerous factual issues surrounding a late reported claim, as well as factual issues surrounding potential prejudice to the insurer. It seems unfair that the Court reached this conclusion without applying the rebuttable presumption test outlined by the Florida Supreme Court in Macias.

The Kroener decision is not final until the Fourth District Court of Appeal rules on any motion for rehearing that may be filed.

Another ground upon which Safeco denied the Millers’ claim was that the Millers discovered “additional” water damage shortly after closing on the property and did not report the loss until four months later. As discussed in last week’s post titled A Wisconsin Policyholder's Success in a Bad Faith Lawsuit Against Safeco, Part II, the inspection report prepared in connection with the sale of the property to the Millers did not prove Safeco’s allegation that the Millers were on notice of the damages before, during or shortly after the date upon which they purchased the property. Mytas, the Safeco adjuster who prepared the report upon which coverage was denied, concluded in his report that he thought the damages reported by the Millers had only recently been discovered. Mytas did not specify what “only recently discovered’ meant in terms of when the damages were discovered:

There is nothing in Mytas’ notes that would suggest he thought the loss was discovered before the Millers bought the Property. Thus, the Mytas Report does not provide Safeco with a reasonable basis upon which to deny coverage for the Millers’ loss.

Safeco also argued that the Abshire Report confirmed that the Millers were aware of the damages before purchasing the property. The Abshire Report was prepared in September 2005, the month after the Millers purchased the property. It was prepared at the Millers’ request in order to obtain cost proposals for repair work after they began the renovations to their new home. Safeco claimed that the Abshire Report confirmed the roof as a main factor in the water infiltration that caused the damages. However, the Abshire Report was prepared after the Miller’s purchased the property, after they moved in, and after they began renovations. It was only after they received the Abshire report that they discovered the damages. As such, the Court determined that it was unreasonable for Safeco to deny coverage based on this report.

With regard to the timeliness of the notice given by the Millers, the Court again found Safeco’s argument meritless. The four month delay was attributable to the Millers contacting their attorney and retaining the appropriate inspectors to assess the damage. This was supported by the documents that the Millers provided to Safeco at the time that they filed their claim. The Court explained further that the Millers’ delay in reporting their loss did not serve as a legitimate reason for denying the claim because Safeco did not demonstrate that it was in any way prejudiced by the delay.

Such being the case, this reason simply does not provide a reasonable basis for denying benefits under the policy, and Safeco acted with knowledge or reckless disregard for its lack of a basis to deny coverage because of the Millers’ delay in reporting their claim.

The Court rejected Safeco’s argument that no covered loss occurred to trigger the additional coverage for fungi, wet or dry rot.

Even assuming Safeco was correct in stating that the “Additional Property Coverage for Fungi, Wet or Dry Rot, or Bacteria only applies if a covered loss occurs” (citation omitted) its reason for denying the additional coverage cannot save the day for Safeco because its rationale rested upon a flawed premise, i.e., that no covered loss occurred. Just as its underlying decision with respect to whether the Millers sustained a covered loss was without a reasonable basis, so too was its decision to deny the additional mold coverage.

The Court also rejected Safeco’s argument that the Millers did not mitigate their damages. Safeco’s own report, prepared by Mytas, reflected that the Millers installed plastic sheeting where the drywall was removed. Further, the Court found that:

The Millers made reasonable efforts to mitigate their damages by winterizing the house, running dehumidifiers, making repairs to the roof, and installing plastic sheeting.

With regard to making any other repairs or mitigating damages to a greater extent, the Court explained that the estimated cost of repair to the home exceeded $315,000, and it is unreasonable to expect insureds who sustained a total loss to expend that amount in repairs. The Court also pointed out that, at no time, did Safeco ever specify any action that the Millers should have taken to protect the property – there was nothing in the claims file nor was there anything disclosed through trial testimony.

Safeco’s inability to identify measures that should have been taken is consistent with Mytas’ testimony that he was not sure whether anything could have been done to prevent further damage. Indeed, if before it denied coverage Safeco had asked Mytas whether the Millers took proper precautions in protecting their home, it would have learned that there was no reasonable basis to deny coverage on this ground. Instead, Safeco blindly denied coverage because of its ill-founded claimed belief that the Millers failed to protect the property from further damage. Such decision was made in reckless disregard of the lack of reasonableness of such ground for denying coverage.

For those who have been following my posts, it may be apparent now why I am dedicating a few weeks to this decision. Please tune in next week for more.

Adam and Sylvia Spector purchased a home in 2000. The home was built by a company called Bentley Homes. The record lists the Spectors’ home size in excess of 8,000 square feet. Fireman’s Fund Insurance Company provided insurance to the Spectors and to other homeowners in the area who also owned Bentley built homes.

At times, the Spectors noticed water on the inside of their window sills but did not report the water to the insurance company. The Court recognized the Spectors were not experts in moisture intrusion and understood the homeowner had to hire experts to help them determine the problem.

The insureds did not hire the experts at the first sign of water.

The Court’s record reads:

During heavy rain storms, Plaintiffs experienced some minor dripping problems which were limited to isolated areas, usually window sills. However, during dry seasons, there were many consecutive months where Plaintiffs had no water leakage problems.

It was not until 2006 when the window paint started to peel away that the insureds determined they needed help. First, they hired a construction consultant to inspect the home. This expert only did a visual inspection and then explained to the Spectors they should hire a stucco expert. A firm was then hired to evaluate the external stucco of the home. The firm tested the property with a moisture meter and found areas of concern, but, unsure of the problem, the firm recommended destruction of walls.

At this point, the Spectors also learned other Bentley built homes were experiencing serious problems due to water damage. However, after hiring two experts, they were still not sure if there was a problem or what was happening. Finally, the Spectors consulted a plaster expert who tested the property. In November of 2007, the plaster expert was able to provide the Spectors with information about the water damage he discovered.

After sending an adjuster and an engineer to evaluate the property, Fireman’s Fund denied the Spectors’ claim.

This policy, like many other policies for residential insurance, includes exclusion for water damage caused by repeated leakage or seepage. An exception in the policy does provide coverage for hidden or concealed damage reported to the insurance company within 30 days of detection or within 30 days of when the damage could have been detected.

I am sure many public adjusters have reviewed policies with similar language and have claims where the date of discovery or manifestation of the damage is at the heart of the adjustment.

In this case, the record indicates Fireman’s Fund sent an adjuster to the property to investigate the loss, and the Spectors testified the adjuster told them “the claim should be covered.” The record also reflects that during the same meeting the adjuster told the insureds to hire a lawyer for the claim, and even recommended a lawyer! Why would the insurance company’s adjuster encourage the insureds to hire a lawyer?

Perhaps this was because of the three other homes in the neighborhood with water damage claims against Fireman’s Fund. Or, maybe, it was the insurance company’s engineer’s influence -- the same engineer assigned to this claim found similar damage at another property and Fireman’s Fund paid.

The Court wrote a detailed Memorandum of fact findings from the trial. It discussed the other water damage claims against Fireman’s Fund and listed other insureds who were paid by Fireman’s Fund for similar damages. The insurance company expert appears to have determined the damages from the Spectors home were exactly the same as damages to the other Bentley homes. Fireman’s Fund paid more than $120,000.00, on the other claim.

The claim is complicated because Fireman’s also alleged the property damage was excluded because of construction defects. The insureds had replaced the roof of the home and many windows. The insurer stated it would not pay for the damages caused by the faulty or defective roof or windows,

The Court ultimately determined that the insureds were entitled to damages for the water damage which was hidden from view.

The Court wrote:

The exception requires that the insureds report the hidden or concealed damage within thirty (30) days…[t]he Court finds that the Policy provided allows an insured party a ‘rolling” thirty (30) day grace period each time new damage is discovered, or where there is an ongoing discovery of damage. (Emphasis added)

The Spectors had the burden to prove they complied with the 30 day rule and the Court agreed the applicable time period began when the third expert found the damage and ended when the claim was reported. This length of time was only a few weeks and qualified for coverage based on the wording of the policy.

The Court awarded $104,432.50 for water damages at the property.

At the same time the Court decided this breach of contract case, it also considered allegations of bad faith and deceptive business practices. The Court denied these counts because the insureds failed to establish by clear and convincing evidence the bad faith requirements—that the insurer lacked a reasonable basis for the denial and it used deceptive practices.

My sources tell me a public adjuster was not hired by the insureds to help with this claim. So, I am wondering if any public insurance adjusters have comments about how other claims are being handled with similar issues in Pennsylvania and elsewhere. And also, what services could have been provided to the Spectors if they had retained a public adjuster?

In Vision I, a homeowner’s association in Palm Beach County sustained damage to its property from hurricane Wilma on October 24, 2005. The association’s insurance policy required that it provide “prompt notice” of damage to the insurer. The association gave verbal notice of a lesser loss to the insurer about eight months after the hurricane, but did not give written notice of property-wide damage until August 2007, some 22 months after the loss. The association filed suit after the insurer did not pay, and the insurer filed a motion for summary judgment, arguing a defense of late notice.

The insurer argued that prejudice should be presumed, given the nearly two year delay between the hurricane and the notice given by the insured. The association argued that the calculation for any delay should be between discovery of the damage and notice given to the insurer. The Southern District Court sided with the association on the calculation for delay in a late notice claim.

“Under Florida law, a failure to provide timely notice of loss in contravention of a policy provision is a legal basis for the denial of recovery under the policy. See Waldrep, 400 So.2d at 785 (‘Notice is necessary when there has been an occurrence that should lead a reasonably prudent man to believe that a claim for damages would arise.’). Indeed, Florida law provides that the failure to give timely notice creates a rebuttable presumption of prejudice to the insurer. ‘If the insured breaches the notice provision, prejudice to the insurer will be presumed, but may be rebutted by a showing that the insurer has not been prejudiced.’ Macias, 475 So.2d at 1216. The ‘determinations of (I) whether the notice provision was complied with and (ii) what is a reasonable time under the surrounding circumstances are questions of fact.’ Bray & Gillespie IX, LLC v. Hartford Fire Ins. Co., 2009 WL 1513400, at *6 (M.D.Fla.2009) (citing Waldrep, 400 So.2d at 785). In order to prevail on a late notice defense, ‘a party must therefore show that there are no genuine issues of material fact regarding 1) what the Policy required with respect to notice, 2) when notice was provided, within the meaning of the Policy and Florida law, 3) whether notice was timely, and 4) whether prejudice exists, either by operation of the unrebutted presumption or otherwise.’ Id. The Court concludes that [the insurer] cannot carry that burden on this record.

The Bray court faced a similar scenario to the present facts-that is, the insurer argued that the insured provided late notice in violation of the policy provision requiring notice ‘as soon as practicable.’ Id. The court held that under Florida law, application of this specific policy language is for the jury, as such language means that ‘notice is to be given within a reasonable time in view of all the facts and circumstances of each particular case.’ Id. at *7 (citing Morton v. Indemnity Ins. Co. of North America, 137 So.2d 618 (Fla. 2d DCA 1962), State Farm Mut. Auto. Ins. Co. v. Ranson, 121 So.2d 175 (Fla. 2d DCA 1960)). The Bray court concluded that the ‘surrounding circumstances’ of that case were ‘replete with factual disputes’ regarding when notice was required to be given and the manner in which notice was provided. Id. For example, the court noted that the plaintiff ‘presented evidence which, if credited, shows that [the plaintiff] did not know the extent of the claimed damage would implicate the [insurer's] policy until 2005, after certain reports were concluded.’ Id. at *7, fn. 9. The court emphasized that since ‘the duty to provide notice arises when a reasonable person, viewing all available facts and information, would conclude that an award implicating the policy is likely,’ the insurer could not establish for purposes of summary judgment, when the duty to notify the insurer first arose. Id. (citing See Harbor Ins. Co. v. Trammell Crow Co., Inc. 854 F.2d 94, 99 (5th Cir.1988)). Therefore, the court concluded that ‘[a]bsent a finding as to exactly when the duty to notify arose, the [c]ourt cannot determine that notice was untimely as a matter of law,’ precluding the granting of summary judgment on the issue of late notice. Id.”

While this case is not binding on all Florida courts, it does cite Florida state case law in its analysis and offers some excellent reasoning as to why late notice claims should be evaluated based on the date the damage was discovered rather than the date of the event that initiated the loss.

In all areas of law, it is important to understand parties’ respective burdens of proof. Understanding and correctly applying the burdens of proof is particularly important in first party property insurance. At times, insurance carriers misconstrue the burdens of proof, usually to their advantage.

The typical Florida insurance policy obligates the policyholder to produce documents and information requested by the insurance carrier and may contain a provision requiring the policyholder to cooperate with the insurer in its investigation of the claim. The cooperation requirement is intended to help the insurance carrier to determine liability once notice of a claim has been given and to protect the insurance carrier from fraudulent claims.

The Florida Supreme Court has explained that a different presumption applies to a policy cooperation clause because a failure to cooperate defense “sometimes relieves an insurer of liability. . . .[a] failure to cooperate is a condition subsequent and it is proper to place the burden of showing [substantial] prejudice on the insurer.”

Where an insured cooperates to some degree with document production, but the insurance carrier denies the claim because every single document was not produced, the issue of whether there has been a material breach of the insurance policy that would relieve the insurance carrier of its payment obligation is a question of fact for a jury. Schnagel v. State Farm Mutual Automobile Ins. Co., 843 So.2d 1037 (Fla. 4th DCA 2003); Haiman v. Fed. Ins. Co., 798 So.2d 811 (Fla. 4th DCA 2001).

It is important to note the difference between these presumptions for policyholders in Florida, particularly given insurance carriers’ aggressive approach in defending hurricane and other claims, based on a failure to cooperate defense. Insurance carriers argue the failure to cooperate almost as an absolute defense to claims, citing a policyholder’s failure to produce every single item of information and documentation. As Chip Merlin and Corey Harris have previously noted in their posts Cooperation Clause Does Not Require Policyholder’s Slavish Obedience and The Limits Of An Insured’s Obligations To Cooperate, if a policyholder cannot produce every single document requested by the insurance carrier, but they comply to the extent possible, it is unreasonable for the insurance carrier to continue to hold open the policy post-loss conditions and demand the documents that the policyholder is unable produce. The claims handling process must go on. Particularly where policyholders are in substantial compliance with the insurer’s requests, the insurer has a high burden under Florida law. Policyholders should not be strong-armed by insurance carriers that misconstrue their burden of proof and treat a failure to cooperate defense as an absolute bar to recovery.

Supplemental Claims

As Shaun pointed out last week, there is no clear definition of what is a “supplemental” claim, and there is no case law in Florida that is directly on point. The dictionary definition of a supplement is an addition. As Shaun explained last week, other states’ case law requires a supplemental claim to be an addition in the type of damage rather than the amount of damage. Those cases are not binding on Florida courts, but if found persuasive by a Florida court, here is an example of what a supplemental claim might look like in a hurricane damage case.

Hurricane A hits Florida in 2005 causing damage to Homeowner B’s house. Homeowner B timely notifies Insurance Company C, which timely inspects the damage. After a thorough inspection, Insurance Company C finds damage to the doors and roof. Insurance Company C then pays Homeowner B the benefits due under the insurance policy to make the necessary repairs to the doors and roof. Homeowner B makes the repairs. In 2009, after several seasons of relatively quiet windstorm activity in Homeowner B’s part of the state, Homeowner B decides to clear out the birds’ nests accumulating in his hurricane shutters. He notices that some of the shutters have been damaged and do not close properly. He contacts a licensed contractor to inspect, who attributes the damage to the last major windstorm to pass through this area, Hurricane A in 2005.

When Homeowner B contacts Insurance Company C about the damage, Insurance Company C is likely to open up a supplemental claim for damage to the windows and shutters that was not previously addressed in the 2005 claim. This supplemental claim for newly discovered damage would now subject to coverage defenses, including failure to provide timely notice.

Reopen Claims

Based on the same persuasive cases outside of Florida from Shaun’s post last week, a reopened claim would look similar, but notice the distinction between the type and amount of loss that are claimed.

Hurricane A hits Florida in 2005 causing damage to Homeowner B’s house. Homeowner B timely notifies Insurance Company C, which timely inspects the damage. After a cursory inspection, Insurance Company C finds damage to the doors and roof. Insurance Company C then pays Homeowner B to replace one door and fifteen tiles on the roof. Homeowner B makes the repairs recommended and paid for by Insurance Company C. In 2009, several years after Hurricane A, Homeowner B goes up into the attic to dig out some old photo albums she hasn’t looked at in years. Homeowner B finds leaks, mold, and rotten roof trusses. Homeowner B contacts a licensed contractor to inspect, who attributes the damage to the last major windstorm to pass through the area, Hurricane A in 2005. The contractor finds that in order to repair the roof properly, it should have been completely replaced rather than repaired with fifteen new tiles.

In this case, a dispute exists about the amount of damage to the roof. This claim for roof damage has already been afforded coverage and partially paid. This type of dispute over the amount of damage makes the case ripe for appraisal. Insurance Company C may classify the reopened claim as a supplemental or “additional” loss because more than the original fifteen tiles are being claimed, but this would be a mischaracterization of the claim. This type of mischaracterization could eventually slip by to result in a denial of the claim that has already been decided was covered.

While there is not a Florida case directly on point with regard to what exactly is a “supplemental claim,” cases from other states shed some light on this issue. A “supplemental claim” is for new or additional damages not previously disclosed or adjusted in an insurance claim. See D.C. Concrete Mgmt, Inc. v. Mid-Century Ins. Co., 39 P.3d 1205 (Colo. App. 2001) (the initial claim was for theft of several items from a job site; while the supplemental claim was for new damage for lost profits never before claimed); Rossmanith v. Union Ins. Co. of Providence, 2001 WL 1451050 (Iowa App. 2001) (the initial claim was related to exterior and interior damage from a hailstorm; while the supplemental claim involved mold damages never before mentioned); Basuro v. 21st Century Ins. Co., 108 Cal. App. 4th 110, 114 (Cal. App. 2d Dist. 2003) (the initial claim was for damage related to the Northridge earthquake in 1994; there were supplemental claims for subsequent roof problems, asbestos damage and cracks in the foundation and moisture damage to the wood floors).

Most insurance policies do not mention or define “supplemental claim.” The question often arises in situations where the insurance carrier is simply attempting to mischaracterize the parties’ disagreement over the amount of loss as a “supplemental claim” in an effort to delay the resolution of the claim, particularly when the insurance carrier has already reached its claim determination and issued payment previously.

If the re-open claim seeks new damages never before claimed, then it may in fact be a “supplemental claim.” That situation is distinguishable from the situation where there is a re-open of a hurricane claim involving roof damage that was not adequately addressed initially or in which there could now be a simple disagreement over the amount of loss. This becomes important: Is the issue one concerning coverage for the loss or is it simply a disagreement over the amount of loss? For help in answering these fact specific questions, consult coverage counsel.

Corey’s posts for the most part address the question of when notice is timely, noting that the answer to the question of when notice is timely depends on the facts and circumstances of each case. This week, I’d like to discuss a little more about the policy reasons behind the timely notice insurance contract provisions. In other words, I hope to answer the question of why timely notice is required. Knowing why timely notice is required is the key for an insured to prepare to rebut an insurance company’s assertion, or worse, a presumption, that notice was untimely.

“The purpose of a provision for notice and proofs of loss is to enable the insurer to evaluate its rights and liabilities, to afford it an opportunity to make a timely investigation, and to prevent fraud and imposition upon it.” State Farm Mut. Auto. Ins. Co. v. Ranson, 121 So. 2d 175, 180 (Fla. 2d DCA 1960); see also, 13 Couch on Ins. § 186:14. The notice provision is also “designed to enable the insurer to ... assess whether it should settle or litigate the claim, if litigation is determined to be the best course of action, to prepare an adequate defense….” 16 Williston on Contracts § 49:109 (4th ed.).

As Shaun and Corey previously stated, in Florida, untimely notice that prejudices the insurer could possibly result in a denial of coverage. Bankers Ins. Co. v. Macias, 475 So.2d 1216 (Fla. 1985). Courts often use the purpose of the notice provision to determine whether a delay in notice has prejudiced the insurer, holding that a frustration of the purpose of the notice provision results in prejudice to the insurer. See e.g., American Mut. Liability Ins. Co. v. Beatrice Companies, Inc., 924 F. Supp. 861, 871 (N.D. Ill. 1996). Thus, an infringement on an insurance company’s right to investigate, protect itself from fraud, determine its liability, prepare an intelligent estimate, or plan for litigation, may result in prejudice to the insurer.

Hurricane damage, like any kind of property damage, may be readily apparent or may not manifest itself until well after the storm has passed. When claims are presented to the insurance company months or years after the storm, the insurance company’s typical response is to assert prejudice due to untimely notice. This response may only be accurate if the insured indeed knew about the damage and waited to report it. If damage is not manifest until months or years after the storm, an insured can argue that prejudice should not be found as long as the insured gives timely notice of the newly discovered damage.

In many cases, the insured promptly notifies the insurance company of damage after a storm, but the insurance company does not do a thorough inspection to find all of the damage to repair. In these cases, the insurance company may be found to blame for any prejudice it asserts. The insured gave the insurance company timely notice of the loss, gave the insurance company an opportunity to investigate, to protect itself from fraud, determine its liability, prepare an estimate, and plan for litigation at the time the loss was initially reported.

The notice provision puts the burden on the insured to provide timely notice of a loss to the insurance company. In hurricane “reopen” cases where prejudice is asserted, the insurance company may be misrepresenting the facts and the law. By asserting prejudice in a hurricane reopen case, the insurance company may be attempting to require the insured to not only provide timely notice of a loss, but also to conduct a thorough investigation, protect the insurer against fraud, and evaluate the rights and obligations of the insurance company. That type of burden shifting is not contemplated in the insurance contract or case law interpreting the contract.

If an insurance company is asserting prejudice due to late notice on a particular claim, especially a hurricane reopen, more than likely you need competent legal representation that has proven experience in dealing with these types of issues.

This post addresses the burdens of proof when a late notice issue arises, when it is undisputed that the first reporting of the claim has been late, and not the unrelated situation where the initial reporting of the claim was timely, but the insured notified the insurance carrier of their disagreement over the claim adjustment several years later. The second scenario will be the subject of another post.

The Florida Supreme Court has held that a presumption of prejudice to an insurer arises where an insured fails to give timely notice of the loss. Bankers Ins. Co. v. Macias, 475 So.2d 1216 (Fla. 1985). This means that when it is undisputed that the first reporting of the claim has been late, a Court will presume that the insurance company’s investigation into the cause and damages associated with the loss was prejudiced. Policyholders can rebut this presumption by showing that the insurer was not prejudiced by the late notice. Macias, 475 So.2d at 1218.

Becoming familiar with the test the Florida Supreme Court announced for these late notice situations is crucial to advise policyholders of their rights under Florida law. Depending on the circumstances, late notice may or may not be an absolute defense to coverage as many insurance carriers argue, particularly to Hurricane Wilma claims.

A policyholder who reports a Hurricane Wilma claim late will certainly receive a letter from the insurance carrier stating it reserves all of all rights under the policy and Florida law regarding the insured’s failure to timely report the claim. Then the insurance company “investigates” the claim for damages through records requests, inspections and examinations under oath. Many of these late notice Hurricane Wilma claims result in a denial of coverage from the insurance carrier, despite evidence of damage in documents, information and photographs presented by the policyholder.

Many questions arise in these situations: what is timely notice; how has the insurer been deprived of the opportunity to investigate the facts; what evidence does the insured need to come forward with to rebut the presumption of prejudice, among many others. Tune in to this weekly Hurricane Law post for discussion on these issues.

In reviewing my own practice and various treatises on this area of insurance law, there is a consensus that the following strategies will most likely result in a fair resolution of a business interruption claim:

1. Review the policy - it does not matter if you can quote coverage forms by memory, the best practice is to review the policy, along with any applicable endorsements, to note all the various categories of losses and expenses that are covered, or not, as well as to recognize and execute all duties and obligations under the policy.

2. Give notice - almost every policy requires that an insured give notice of the loss, “promptly,” “as soon as practicable,” “immediately,” “within a reasonable time,” or within some other time period specified under the policy. Failure to comply with this policy condition may result in a claim denied. If this happens, the claim will inevitably have to be litigated. In Florida, a denial for failure to give timely notice will unfortunately create a rebuttable presumption that the carrier has been prejudiced as a result thereof. Tiedke v. Fidelity & Cas. Co. of New York, 222 So.2d 206 (Fla. 1969). Therefore, if the insured decides to litigate the claim denial, the insured has the burden of presenting enough factual evidence to overcome this presumption and the court must determine if the time between the loss and the notice was reasonable under all of the facts and circumstances of the case. See, Employers Cas. Co. v. Vargas, 159 So. 2d 875, 877 (Fla. 2d DCA 1964). Also, when giving notice of a claim, avoid making any verbal or written statements regarding coverage, the requirement to give notice, is just that; a duty report the loss in a timely fashion.

3. Cooperation - After a claim is reported, a carrier will begin its adjustment or investigatory phase. During this period of time, the insured is required by the contract to provide as much information as reasonably possible to assist the insurer in its investigation of the claim. Many business owners and managers raise their brows at the type of information that sometimes is requested in support of a BI claim. Rightfully so. At times, the information requested may infringe on trade secrets or information that fuels the business’ competitive advantage. If this is a concern, an insured should consider retaining an attorney, not only to openly discuss these concerns without fear of publicity, but also to consider the possibility of drafting and entering into a Confidentiality Agreement with the insurer, which, most of the time, is merely seeking to quantify a claim and will not oppose such an agreement.

4. Mitigation - Many policies cover only those losses that could not be avoided through reasonable post-loss mitigation efforts. With respect to business interruption coverage, an insured is often required to exercise due diligence to repair covered property damage and resume operations. Therefore, after a loss, an insured should quickly evaluate whether there are reasonable steps it can take to avoid additional business or property losses. To the extent possible, an insured may want to consider informing its insurer of its mitigation efforts to provide an opportunity for input and to avoid dilemmas after the fact.

5. Cost Tracking - In general, a policyholder bears the burden of measuring, documenting, and establishing its claim. Most businesses have internal accounting programs and systems that organize its ingress/egress functions. Hopefully, these systems operate remotely and will survive a catastrophic loss. Otherwise, the insured will face the daunting task of reconstructing its pre-loss costs and post-loss projections from scratch.

6. Document everything - if there is one thing that people can learn from lawyers is the practice of documenting every relevant communication with all relevant parties. Many business owners and managers already engage in this type of practice, but in times of distress and anxiety about survival, many forget to maintain this important practice. I always say, there is nothing more powerful than those green cards at the post office; this practice simply makes life easier.

A small theft claim, for instance, may not seem like something that must be reported to the police, however, it is always better to be safe than sorry. Sure, many times the items stolen may be worth less than the policy deductible, but what happens if more items come up missing later? Often, policyholders do not notice that some items are missing until long after a burglary or theft, and failing to notify the police could create issues with the insurance company covering the loss.

Policyholders should also make sure to understand that notifying the police of a loss does not relieve them of their duty to report the loss to the insurer. As discussed in previous posts, if the insurer is not given notice of the loss, coverage could be denied.

The best practice when dealing with a potential theft loss is to immediately notify the police and insurance company. Most insurers closely evaluate theft claims many with an eye towards fraud. If notice is not given to the police or is unreasonably late, the insurer will likely take a more skeptical view. This can cause substantial delays, even if coverage is ultimately not denied.

With that said, this will conclude my posts on Notice of Loss. I have received some great questions and comments both on this blog and by email. I really appreciate those of you who take time to read my posts. While I will be moving on to other post-loss duties, if anyone has any questions about notice or any other topic I cover, please do not hesitate to contact me.

To make an initial determination that notice is late in Florida, a court generally must look at whether the policy provisions for notice have been complied with and whether the timing of the notice was reasonable under the circumstances of the case. See Waldrep at 785.

If it is determined that notice is late, it does not always provide a valid reason for not paying the claim. In Florida, late notice must prejudice the insurer in order to deny coverage. If the insurer has not been prejudiced by the late notice, the claim should be paid.

While this requirement does provide some protection for policyholders, proving that there is no prejudice is not always as easy as it seems. In Florida, late notice creates a rebuttable presumption of prejudice to the insurer. Bankers Ins. Co. v. Macias, 475 So.2d 1216 (Fla.1985). This means that from the beginning, the insurer is presumed to have been prejudiced by the late notice and the burden is on the policyholder to prove otherwise.

The main prejudice that an insured must overcome occurs when the late notice substantially affects the insurer’s ability to investigate a claim. For instance, if a policyholder does not notify the insurance company of damage to a roof, passing time may worsen the condition and the insurer can argue that any repairs deprived the insurer of an opportunity to fully investigate the cause of the loss.

These arguments by the insurer do not always succeed, however, they will take time away from the general goal of getting the claim paid and will cause headaches that may have been avoided. Having to overcome a prejudice argument can be difficult, and the consequences of not proving this argument in Florida may unnecessarily void coverage.

While many of these arguments will likely fail because the insurer was timely notified of the loss after the storm and simply did not perform a full investigation to determine the correct extent of the damages, these situations highlight the importance of timely notification.

In one way or another, most policies state that the insured has a duty to give prompt notice of any loss to the insurer. Some policies may actually list out the exact time in which the notice must occur, and some states even have statutes which cover this exact topic. While this may prove helpful to the policyholder and help answer any questions as what constitutes “prompt” or “timely” notice, these instances are the exception and not the rule. Thus, there has been, and continues to be, an abundance of litigation over what these clauses actually mean.

So how quickly must notice of a loss be given? The general rule of thumb is that you should give notice as soon as possible. The occurrence of a loss usually triggers the policyholder’s duty to inform the insurer and doing so immediately can help reduce or eliminate any argument of noncompliance.

When an issue of whether notice was prompt or timely arises, courts must assess the cases individually. The individual facts surrounding each situation are very important and some jurisdictions may be very strict while others may be more lenient. Courts must determine if the time between the loss and the notice was reasonable under all of the facts and circumstances of the case. Employers Cas. Co. v. Vargas, 159 So. 2d 875, 877 (Fla. 2nd DCA 1964).

In Texas, one court held that without extenuating circumstances, a 54 day delay in reporting a claim was not reasonable and allowed an insurer to deny coverage. McPherson v. St. Paul Fire & Marine Ins. Co., 350 F.2d 563 (5th Cir. 1964).

At the opposite end of the spectrum, the United States District Court for the Southern District of Florida held that notice was not necessarily untimely when given much later than 54 days after the loss, when an insured did not discover the damages until many months after a hurricane. Vision I Homeowners Ass'n, Inc. v. Aspen Specialty Ins. Co., 2009 WL 4927162 (S.Dist. Fla. December 22, 2009). As the Court noted in that case, “the Aspen policy created the possibility of this inherent ambiguity regarding notice by using the term “prompt notice” rather than a finite term, such as requiring notice within sixty or ninety days from the date of the loss.”

These cases show that there is a diverse range of findings that deal with prompt or timely notice of a loss. Some states require that an insurer be prejudiced by the late notice in order to avoid coverage. This is the law in Florida, however, there is a presumption that late notice has prejudiced the insurer and it is up to the policyholder to prove otherwise. While some states take the opposite stance and put the burden of proving prejudice on the insurer, the best way to avoid having to deal with these issues is to give notice as soon as possible. If you are having an issue with whether the notice was prompt, you should have a good understanding of the laws of your particular jurisdiction to determine how best to move forward.

The consequences of a finding that the policyholder did not provide the insurer with prompt notice of a loss can be severe, possibly resulting in complete denial of a claim. Providing notice as soon as possible will help prevent litigation over what constitutes “prompt” or “timely” notice and will move the claim along more quickly. It will also reduce the chances that a claim is denied because of noncompliance with the post loss obligations.

Many people rarely, if ever, have to submit a major insurance claim dealing with their property. The extent of their knowledge and involvement is sending in the premium check when due. Is it any wonder that the typical homeowner might be confused about who their insurance agent is and where they should send a notice of loss?

Possibly contemplating such confusion, some policies specifically state where the notice of loss should be sent. The language varies; it may be the home office or it may be the individual agent who sold you the policy. No matter who or where the policy designates, the policyholder should do their best to comply.

The situation becomes more complicated when the policy is silent or states that the notice should be given to an “authorized agent” of the insurer. Individuals who are authorized agents of an insurer have actual authority to conduct the business of the insurer. Therefore, notice provided to an authorized agent would normally be sufficient if the policy language allows as much. The appropriate authorized agent of an insurer may be spelled out in the policy or in some cases in relevant statutes, so reading and understanding these is always a good idea.

The plot thickens when the individual accepting the notice of loss is not an authorized agent of the insurer. Many times, direct employees of the insurer are not authorized agents and service of notice of loss on them may be ineffective. While this is never a good situation, the courts have provided some leeway when dealing with this type of case.

First, if the person accepting the notice would be deemed to be an authorized agent by a reasonable person, the individual may be deemed to have apparent authority to transact business on behalf of the insurer and, thus, the notice was effective. This apparent authority might come from the actions and representations of the insurer or the individual; either has the potential to impose apparent authority and cause the notice to be effective.

If a policyholder finds himself in a situation where he must submit a claim, he should read the policy first. Many times, the policy states specifically where the notice of loss should be sent. If it is not listed in the policy or the policy is ambiguous, it is never a bad idea to pick up the phone and call the insurance company. Your local agent might be able to help, and, if not, try the home office. Get an answer and follow up in writing to avoid any confusion later, and then send the notice to the designated person or place. Following these simple steps could prevent problems with the claim and keep the file from ever crossing an attorney’s desk.

Much like the reasoning behind a proof of loss, the duty to provide the insurer with notice that a loss has occurred is intended to put the insurer on notice and enable it to investigate whether coverage exists. One of the most fundamental issues in dealing with notice is who will be able to provide notice of the loss to an insurer.

Most policy language contemplates that notice of a loss will be given by the insured. The language of a notice of loss provision may state that “you” (meaning the insured) must give prompt notice of any loss. Others may state that “you or your representative” must give prompt notice of any loss. Generally, courts have held that notice provided by an agent or representative of the insured is sufficient, even if the policy language reads as “you,” as long the agent/representative is authorized by the insured to give notice. See Johnson v. Westhoff Sand Co., Inc., 62 P. 3d 685 (Ka. App. 2003), KPFF, Inc. v. California Union Ins. Co., 66 Cal. Rptr. 2d 36 (Ca. 1st Dist. 1997),

Courts have found a variety of instances where an individual other than the insured may give notice for the policyholder. For example, a policyholder’s attorney may provide notice of the loss to the insurer. Thomas v. Atlanta Cas. Co., 558 S.E.2d 432 (Ga. App. 2001)(holding notice from the insured’s attorney was sufficient as long as the notice was promptly provided and sufficient to notify the insurer with actual knowledge of a claim or suit).

In some circumstances, notice from another insurer may be enough to satisfy the notice requirement. For instance, in the case of excess insurance polices, notice by the first layer carrier to the excess carrier may be considered enough to fulfill the policyholder’s obligations. The determinative issues are usually whether the notice was enough to provide actual knowledge of the claim and whether the notice is sufficient under both the language of the policy and any relevant statute.

Also, courts have found that notice provided by one insured may be enough to fulfill the notice requirement for other insureds. The most common example of this occurs when a property is mortgaged. In such a situation, the mortgagor and any mortgagee have the right to provide notice to the insurer of a loss. It is not hard to imagine an instance where the mortgage company might provide notice of a loss to the insurer before the homeowner, or vise versa. In these situations, some courts have held that as long as the notice was timely and sufficient to give the insurer actual notice of the claim, notice provided by the first or even second mortgagee will provide notice for the other insureds, even if they do not notify the insurer themselves. Goodman v. Quaker City Fire & Marine Ins. Co., 241 F.2d 432 (1st Cir. 1957).

Finally, some jurisdictions have held that a loss report from the policyholder’s insurance agent or claims adjuster is sufficient to fulfill the requirement for notice, even if the policy specifies that notice be provided in writing by the insured. Security Ins. Co. of New Haven v. Dazey, 78 F.2d 537 (7th Cir. 1935). Relying on the insurance agent or claims adjuster can be dangerous, however, because some courts have held that their failure to provide timely notification to the insurer may bar recovery even though the policyholder relied on them to do so. American Mut. Liability Ins. Co. v. Beatrice Companies, Inc., 924 F. Supp. 861 (N.D. Ill. 1996).

While there may be recourse for the insured in a suit for negligence, this is a headache that is easily avoided if the insured does not rely on a third party to provide notice of the loss. In the end, providing notice of a loss to an insurer is very important to having your claim quickly and fairly adjusted and paid. A policyholder should always notify the insurer as soon as possible of any loss and, if possible, in writing. Even if written notice is not required or not possible, any verbal notices should be followed up in writing so that there is no question later about whether the notice was timely, sufficient, or even occurred at all. Taking a little extra time to do things properly can help the claim move towards a more favorable resolution.