As I have stated in past installments, the language and terms of insurance policies can differ in a variety of ways. Therefore, it is extremely important to know and understand the terms of the policy when making a claim. A great example of this is the terms of the policy that control who may submit a Proof of Loss and how that submission must take place.
According to the terms of most policies, a Proof must be submitted by the insured named on the policy. This means that while others, such as a public adjuster, may help the insured gather information necessary, if the Proof of Loss is submitted by anyone other than the insured, the insurer may have a valid reason for rejecting it.
Similarly, some states have statutes which require a Proof of Loss be submitted. Failing to comply with these statutes can create a variety of problems from providing the insurer with a potential reason to deny a claim and waiving any possibility of having attorney fees recouped for a successful action. For instance, Idaho Code § 1835 states:
(1) Any insurer issuing any policy, certificate or contract of insurance, surety, guaranty or indemnity of any kind or nature whatsoever, which shall fail for a period of thirty (30) days after proof of loss has been furnished as provided in such policy, certificate or contract, to pay to the person entitled thereto the amount justly due under such policy, certificate or contract, shall in any action thereafter brought against the insurer in any court in this state for recovery under the terms of the policy, certificate or contract, pay such further amount as the court shall adjudge reasonable as attorney’s fees in such action.
In many instances there is more than one person named as insureds on a policy. Situations where a husband and wife are both named on the policy for the family’s home or where numerous partners of a business are named on a businessowners policy are becoming quite common. Thus questions arise about whether all of the insureds must submit a Proof. In many instances, a Proof of Loss submitted by one person named on the policy will be sufficient and will benefit the other insureds. Case law on this subject has found this to be applicable to spouses, business partners, and even family members in some instances. For example see Della Porta v. Hartford Fire Ins. Co., 500 N.Y.S.2d 831 (3d Dep’t 1986)(holding that a proof submitted by one owner can be used for the benefit of other owners.) and U.S. Fire Ins. Co. v. Merrick, 171 Md. 476 (1937)(holding husband’s signature on proof of loss and signing the name of his wife by himself sufficient where personal property was insured in the name of the husband and wife and the whereabouts of the wife who had left home were not known).
As with all things, however, you should always check your policy language and local laws to determine the exact requirements.
Much like the limitations on who may submit a Proof of Loss, there often are requirements which apply to the representatives of the insurer who may accept a Proof and where one should be mailed. The terms of the individual policy and applicable statutes will usually be controlling, however there are instances where there are no specific provisions which apply.
If this is the case, the general rule of thumb is that the Proof can be submitted to an agent or officer of the insurer. There is sometimes a question about whether the agent or officer has actual or apparent authority to accept the Proof, requiring a determination that is heavily fact intensive and often complicated. It is important to fully comply with the requirements to avoid later problems. For instance, the Tennessee Supreme Court found that mailing a Proof of Loss to the insurer’s local office did not satisfy the policy’s provision stating that a Proof should be mailed to the home office. Fisher v. Travelers Ins. Co., 138 S.W. 316 (Tenn. 1911).
In the end, many courts have been extremely strict when interpreting compliance with post loss obligations. Thus, a close study of the policy and the applicable law is imperative to ensure compliance with all provisions. If a policy is unclear or vague as to the exact requirements, it is always a good idea to get a written explanation from the insurer. This letter could be very useful if there is a dispute later.
As with my last post in this series, please keep in mind that the requirements under flood policies are much different, and failing to follow the flood policy procedures to the letter can result in disaster for your claim.