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

Under those same set of facts, if our wannabe Emeril Lagasse fails to properly mitigate those same fire damages, coverage could be reduced or even avoided all together by the insurer.

The general rule in insurance law is that a policyholder’s prior actions will not necessarily void coverage for a loss, even if that loss is directly caused by the negligence of the individual. After the loss, however, failing to take the appropriate measures to mitigate could lead to an increase in the amount of damages and may substantially reduce coverage or even eliminate it in some instances.

In a fire loss, for instance, the insured should make sure to remove any undamaged property if there is a question about the stability of the walls in that particular area. This was the exact situation that one court addressed in Suttir v. Indemnity Co. of America, St. Louis, Mo,. 226 Ill.App. 214, (1st dist. 1922). In this case, the Court refused to hold an insurer liable for damage to a car that occurred when the walls around it collapsed as a result of previous fire damage. The Court reasoned that the insured knew the walls of the building might collapse and had failed to properly mitigate the damages by moving the automobile to a different location. Therefore, the insurer should not be responsible for the further damages.

The exact consequences of a failure to mitigate are determined by the terms of the policy as well as the particular jurisdiction. Normally, the damages that result from the failure to mitigate the loss may not be covered, leaving the insurer responsible for only the original damages. A Louisiana court followed this partial recovery theory when a policyholder’s roof was damaged by wind and the house suffered periodic water damages over a long period of time. Higginbotham v. New Hampshire Indem. Co., 498 So.2d 1149 (La.App. 3 Cir.1986).

In Higginbotham, the Court held that although the insurer was responsible for the cost of replacing the roof, the policyholders were liable for damages sustained after the storm “where measures could have been taken to reasonably protect the premises from further deterioration.”

A similar decision was reached in Texas, when one court was asked to determine whether the duty to mitigate damages was a condition precedent to recovery, meaning that coverage was void if the appropriate steps were not taken. Fortunately for the policyholder, the Court found that “the failure to mitigate damages is an offset to recovery under the generic homeowners policy, and the district court erred and abused its discretion when it instructed the jury that mitigation was a condition precedent to recovery.” Carrizales v. State Farm Lloyds, 518 F.3d 343 (5th Cir. 2008).

There are cases in which a failure to mitigate may void coverage completely. Some courts have found that where the cooperation clause requires an insured to exercise all reasonable means to protect, safeguard, and salvage property, there is a possibility that the policyholder could void coverage altogether if this is not done. See Slay Warehousing Co., Inc. v. Reliance Ins. Co., 471 F. 2d 1364 (8th Cir. 1973).

Regardless of whether coverage is lessened or outright forfeited, these cases all have one thing in common – the problem could be avoided. Generally after loss, the first thing on an insured’s mind is not “how can I mitigate these damages, and have I done enough to comply with my obligations under the policy.” In fact, most insureds do not even know what the cooperation clause is, and who can blame them? How many people spend their lives immersed in insurance case law and treatises?

This is why it is important for homeowners to have professionals working for them as quickly as possible after the loss. Whether it is a public adjuster, attorney, or water remediation specialist, having someone there to guide you and make sure things are done properly can be priceless in the end.

If the policy is silent as to whether the policyholder is entitled to reimbursement for these expenses, many courts have found that they are. In City of Laguna Beach v. Mead Reinsurance Corp., 226 Cal.App. 3d 822 (Cal.App. 4 Dist. 1990), for instance, the Court focused on the fact that the insured’s duty to mitigate the damages is intended for the benefit of the insurer by lessening the amount that must be paid under the policy. The Court held that since the temporary repairs were intended to benefit the insurer, the policyholder was entitled to reimbursement.

In McNeilab, Inc. v. North River Ins. Co., 645 F. Supp. 525 (D. N.J. 1986), a New Jersey court came to a similar conclusion. The McNeilab Court found that where an insured took steps to minimize damages which had already occurred, the insurer must reimburse the policyholder for the reasonable expenses incurred.

Also, for mitigation expenses to be reimbursed, the loss being mitigated usually must be covered under the policy. See Swire Pacific Holdings, Inc. v. Zurich Ins. Co., 139 F.Supp. 2d 1374 (S.D. Fla. 2001). Likewise, in Witcher Const. Co. v. Saint Paul Fire and Marine Ins. Co., 550 N.W.2d 1 ( Minn. Ct. App. 1996), the Court held that the policyholder’s obligation to prevent or mitigate harm does not arise until insured subject matter is threatened by covered loss, but if the prevented loss falls within an exclusion, the insured has no right to indemnity for its efforts.

Therefore, if the loss is determined not to be covered by the policy, the insurer may not have an obligation to reimburse the policyholder for expenses associated with temporary repairs. This, however, should not deter anyone from taking all reasonable steps to prevent further harm. Many times, there is coverage for things which at first glance may seem to be excluded by the policy. With the exclusions, exceptions to exclusions, and the like, insurance policies are a maze of coverages, and many require a professional to interpret. Even if you think a loss may not be covered, it is important to take the steps reasonably necessary to prevent any further damage so as not to provide the insurer with a possible basis for denying a claim that turns out to be covered.

As I mentioned last week, policyholders have a duty to take reasonable measures to protect their property from further damage after a loss. These immediate repairs are not usually intended to be a permanent fix, but instead they intended to temporarily protect the property.

Many insurers have guidelines for their policyholders when it comes to mitigating damages. While doing some research into one Florida insurance company I recently came across these “Tips” on its website:

If your property suffered damage from the storm, you should:

• Report your claim immediately by calling our toll-free claims number
• If safe to do so, make temporary repairs as necessary to prevent further damage and protect your property. Consider contacting a water extraction company to dry out your dwelling.
• Take photos of the damage prior to making temporary repairs
• Keep detailed receipts and present them to the adjuster

This checklist highlights a few important things. First, you should always consider your own safety before attempting to make temporary repairs. Running out to tarp a roof in the middle of a hurricane makes absolutely no sense since the tarp would likely blow off again anyway and the chances of injury or even death more worrisome than the possible damages that may occur. It is a little known fact that most reported in the aftermath of a hurricane occur after the storm has passed.

Second, the insurance company has the obligation to fully investigate a loss. By contacting the insurer quickly to report the loss, the insurer’s representatives can move quickly to adjust the loss. Unfortunately sometimes adjusters do not get to the property as soon as the policyholder would like, many times through no fault of their own. Thus documenting the damages and every stage of repairs can be very helpful in moving the claim along more quickly. Policyholders should attempt to take pictures of the damages, as well as the progression of any temporary or permanent repairs which are being made.

In a recent case, one of my clients was denied coverage for a water loss that significantly damaged her home. When counsel got involved, we were able to document everything that had happened in the claim including the actual damage and every step of the repair process. All in all, this diligent policyholder took somewhere around 2000 pictures of her damaged house and in the end it was enough to bring the insurer to the settlement table quickly. In this case, I guess a picture really is worth a thousand words.

Finally, it is important for policyholders to keep detailed receipts of all expenses incurred as a result of the loss. This could include labor or materials purchased to make repairs, receipts for hotel stays if the property is unlivable, restaurant receipts, gas purchases, etc. Every expense should be well documented and presented to the insurer so that you can be reimbursed.

This small guideline provides a good basic summary of some of the immediate post-loss obligations that a homeowner incurs. By following these steps, policyholders can fulfill many of these duties and keep their claim on track for a quicker settlement.

Most policies read something like this:

B. Duties After Loss

4. Protect the property from further damage. If repairs to the property are required, you must:
a. Make reasonable and necessary repairs to protect the property and;
b. Keep an accurate record of repair expenses

In the industry, this is called “mitigating the loss,” which means taking steps to keep the severity of the loss from increasing. While the language of a particular policy may be different, the general principle remains the same and for good reason. Pennsylvania Lumbermens Mut. Fire Ins. Co. v. Nicholas, 296 F.2d 905 (C.A.Fla. 1961). Simply put, this provision is intended to keep the loss from unnecessarily increasing and thus increasing the cost to both the insured and the insurer.

Keep in mind that this does not mean that permanent repairs are immediately required. In most, if not all, cases, this means that temporary repairs must be made to ensure that the damages do not get worse. Tarping a damaged roof to keep rain water out or turning off the water supply to a broken pipe are both common temporary repairs which can be sufficient to mitigate the loss.

While this may seem like common sense, even a cursory reading of the provision above should raise some red flags. There can be many questions raised regarding whether the temporary repairs were “reasonable,” “necessary,” or even possible. This can cause a wide variety of issues with a claim and can provide the insurer with an excuse to avoid prompt payment under the policy and could even lead to the claim being denied.

Over the next few weeks, I will post on many of the issues surrounding this obligation. As always, I welcome and encourage your comments and questions. In the end, these posts are for the readers, so please feel free to chime in.

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.

What is the difference between your case with the secretary acting in an agent capacity and an adjuster acting in a claims settlement capacity for the insurer? Are the sales agent's actions more binding than the claims adjusters’ actions? I realize there are two topics here, but it would be very informative if you could enlighten the subscribers as to who may become an "agent" of the insurer during a claim, when estoppel applies, to whom it applies and if there is any case law on this issue.

First, let me say that there is generally not any significant difference between the ability of a claims adjuster and a sales agent to bind an insurer. Although someone on the loss adjustment side of the company and someone in the sales department have vastly different roles, their position is not the main determining factor. The main point to look at is whether an ordinary person would have a reasonable belief that the individual employee has the authority to make statements which would bind an insurer. This is usually fact intensive and can involve the individual’s title, what authority he held himself out as having, as well as what actions the company took to instill this belief. Therefore, depending on the situation, there is little difference in the ability of an adjuster and a sales representative when it comes to binding an insurer.

In general, everyone that works for an insurer is an “agent” of that company in some respect. I know there are probably some industry people who might not agree with that statement, but in the end, if someone is an employee, they are technically an agent. If a low level employee did something that reflected negatively on the company, he would likely be fired because his actions reflected badly on the company. Therefore, although a person may technically be an agent of the company, he may not have the authority to bind the company.

The determining question is whether the person has actual or apparent authority to bind the insurer. His position may be enough in some situations. For example, the night janitor might serve a vital function at the company, but would it be reasonable for someone to believe that he had the authority to make binding statements on company policy? Probably not. A director, on the other hand, likely would have the authority to bind the company because of his position alone.

Most of the issues of who has the authority to bind an insurer are not so clear cut. Insurance companies are large, complex organizations. Therefore, it is important to look at how the individual projects himself to the public as well as his job title. If the person flat out says that he has the authority to make binding decisions, the insurer will be hard pressed to show that the policyholder should not have relied upon his statements and actions. Similarly, if the individual has made binding decisions in the past, the same would be true.

Also, how the insurer has acted in regards to that individual’s ability to bind the company is important. If the individual has made binding decisions in the past and the insurer has not objected, the insurer will have a difficult time explaining why it is now saying that he does not have this power.

The legal terms for the types of authority are actual and implied. Actual authority occurs when the person is entitled to make binding decisions on behalf of the insurer. If this is the case, then there is likely no argument that his decisions were not final. Implied authority is more fact intensive and involves looking at the factors mentioned above.

While there is no comprehensive list of who is an “agent” with binding authority, some court cases have mentioned specific people that generally have the authority to do things like waive policy conditions.

For example in Florida:

An insurance adjuster is a special agent for the company and his powers and authority are prima facie coextensive with the business intrusted to his care…which is ascertaining and determining the amount of any claim, loss or damage payable under an insurance contract, and/or effecting settlement of such claim, loss or damage. F.S. ss 626.0404 and 626.0405, F.S.A. The acts of an adjuster within the apparent scope of his authority are binding on the company without notice to the insured of limitations on his powers. Old Republic Ins. Co. v. Von Onweller Const. Co., 239 So.2d 503, 504 (2nd DCA 1970.)

The acts of an agent [referring to a broker], performed within the scope of his real or apparent authority, are binding upon his principal. The public have a right to rely upon an agent's apparent authority, and are not bound to inquire as to his special power, unless the circumstances are such as to put them upon inquiry.” Hughes v. Pierce, 141 So.2d 280, 284 (Fla. 1st 1961).

In Texas:

…it does not follow that one employed as an adjuster may not also be vested with authority to bind the insurance company by a waiver of a breach by the insured of some warranty on his part relative to his policy of insurance, to the same extent as any other representative of the company. And, in the absence of any proof to the contrary, we believe that the facts and circumstances related above, prima facie, were sufficient to show that it was in the apparent scope of the authority of [the adjuster] as a representative of the company to bind the company to waivers pleaded by the appellee, and to [the adjuster’s] agreement to pay the losses claimed by the plaintiff. Home Insurance Co. v. Moriarty, 37 S. W. 628 (Tex. Civ. App.)

These cases all stand for the proposition that many individuals on both the adjustment and sales side of insurance can bind the insurer, however, it is important to note that some cases go the other way. Over the past few months. I have heard horror stories about the plight of the policyholders in Texas, and the courts could come down on either side when evaluating these issues. Therefore, make sure everything is well documented and in writing, so that you have the best chances.

Also note that the NFIP has completely different rules when it comes to waiver and estoppel. As the policy states, only FEMA may waive the requirement that an insured submit a Proof of Loss. When a policy is this explicit, relying on a verbal or written waiver by someone other than the individuals listed in the policy may provide the insurer with a reason to deny the claim entirely. In the case of the National Flood Insurance Policies, you can almost be guaranteed of it. See Sanz v. United States Security Insurance Co., 328 F.3d 1314 (11th Cir.2003)(holding the Proof of Loss requirements may be waived, but to be effective the waiver must be made by the Federal Insurance Administrator and must be in writing).

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.

For the past 12 weeks, I have written about one of these post-loss obligations, the Proof of Loss. Over the next few months, I will delve further into other policyholder obligations, such as the duty to notify the insurer of a loss, to protect the property from further harm, to prepare a detailed inventory of damaged personal property, to show the damaged property, and to provide documents requested by the insurer. These obligations, along with the duty to submit to an EUO when requested, are the main post-loss obligations and are a vital part of all insurance policies. If you have not yet read Bob Reynolds’ recent series on EUOs, I highly recommend doing so to supplement my forthcoming posts.

The duty to cooperate in first party claims differs from third party claims in a significant way. In the third party context, the relationship between the policyholder, the insurer, and the third party is constantly changing. Each claim is different, and the information necessary can be vastly different from case to case.

With first party claims, the information necessary to make a determination of whether coverage exists generally remains constant from case to case. Therefore, property policies tend to spell out the duty to cooperate in a cumulative list of “post-loss duties”.

For instance, a homeowner’s policy may contain some variation of the following language:

B. Duties After Loss

In case of a loss to covered property, we have no duty to provide coverage under this policy if the failure to comply with the following duties is prejudicial to us. These duties must be performed either by you, or your representative, or an “insured” seeking coverage, if not by you:

1. Give prompt notice to us or our agent;

2. Notify the police in case of loss by theft;

3. Notify the credit card or fun d transfer card company in case of loss as provided for in E.6. Credit Card, Electronic Fund Transfer Card or Access Device, Forgery and Counterfeit Money under section I- Property Coverage;

4. Protect the property from further damage. If repairs to the property are required, you must:

a. Make reasonable and necessary repairs to protect the property; and
b. Keep an accurate record of repair expenses;

5. Cooperate with us in the investigation of a claim;

6. Prepare an inventory of damaged personal property showing the quantity, description, actual cash value and amount of loss. Attach all bills, receipts and related documents that justify the figured in the inventory;

7. As often as we reasonably require:

a. Show the damaged property;
b. Provide us with records and documents we request and permit us to make copies; and
c. Submit to examination under oath, while not in the presence of another “insured”, and sign the same; 

8. Send to us, within 60 days after our request, your signed, sworn proof of loss which sets forth, to the best of your knowledge and belief:

a. The time and cause of loss;
b. The interests of all “insureds” and all others in the property involved and all liens on the property;
c. Other insurance which may cover the loss;
d. Changes in title or occupancy of the property during the term of the policy;
e. Specifications of damaged buildings and detailed repair estimates;
f. The inventory of damaged personal property described in 6. above;
g. Receipts for additional living expenses incurred and records that support the fair rental value loss; and
h. Evidence or affidavit that supports a claim under E.6. Credit Card, Electronic Fund Transfer Card or Access Device, Forgery and Counterfeit Money Coverages, stating the amount and cause of loss.

These duties are very important to property insurance claims, and the failure to comply with these obligations can delay settlement of the claim or possibly provide an insurer a basis for denial. I hope you will join me over the next few months as I explain what these obligations require.