A frequent issue that lawyers, adjusters and other insurance industry experts address in Florida involves policyholders’ failure to timely report their Hurricane Wilma claims to the insurance carriers. Often times, a policyholder is unaware of his or her rights and obligations under the policy and Florida law, and is unfamiliar with finding and determining damages to property. Also, policyholders have often heard horror stories of insurers canceling policies after one claim. Some policyholders try to make repairs themselves to avoid the headache of presenting a claim and going through the claim process. When the problem re-presents itself and the policyholder decides to file an insurance claim, a significant amount of time has passed since the date of loss.
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.