I recently blogged about the insurer’s duty to “thoroughly” investigate a claim and what constitutes a “thorough” investigation. But when does the duty to investigate arise? In California, an insurer’s duty to investigate does not arise until it has notice of a claim. While this sounds simple enough, there are some aspects of the notice requirement that warrant discussion. For one, in order to maintain an action based on bad faith, the insurer must be shown to have had actual, as opposed to merely constructive, notice of the insured’s claim.1

An insurer has actual notice when the claim is presented by the insured in compliance with the claims procedures contained in the policy. An insurer may have constructive notice if it is aware of certain facts that would cause a reasonable person to make further inquiry. While constructive notice may give rise to an insurer’s contractual liability, it is not sufficient for a bad faith action.

To ensure that an insurer has actual notice of the claim and impose on the insurer a tort duty to investigate, the insured must make a good faith effort to comply with the notice provisions in the insurance policy.2 In almost all cases, a policy requires both written notice of the claim and written proof of loss. If an insured does not make a reasonable effort to comply with both requirements, the insurer generally is under no duty to investigate.

1 California Shoppers, Inc. v. Royal Globe Ins. Co. (1985) 175 Cal.App.3d 1.
2 Paulfrey v. Blue Chip Stamps (1983) 150 Cal.App.3d 187.



    Hello Attorney Kan:

    “…In almost all cases, a policy requires both written notice of the claim and written proof of loss…”

    Is this “written proof of loss” you refer to the same as a “SWORN STATEMENT IN PROOF OF LOSS”?

    Just curious. Tx.


  • Kenneth Kan

    Thank you Ms. Heflin for reading my blog post. The answer to your question is yes. Most insurers will send the insured a blank proof of loss form at the outset of the claim. The proof of loss must be completed and executed under oath.

  • Sharene Simmons

    What can I do if my car was parked curbside and a driver hit it, drove off, but due to severe damage to his own vehicle, didn’t get too far. I was able to get his information, reported the incident to the police, turned the claim into my insurance carrier, but the adjuster said it is a total loss and they were closing the claim because the adverse driver’s insurance carrier (Allstate) were assuming 100% liability, but have not done anything and the incident occurred 11 days ago. Allstate’s adjuster finally inspected the vehicle yesterday and a person I spoke with in claims gave me a reservation number for a rental car, but the rental company said I have to put a credit card deposit of $250 or debit card deposit of $300, plus pay for full-coverage insurance. I don’t get the whole process! A negligent driver damages my vehicle, my caris not drive able due to the damages he caused, committed a crime when he hit my vehicle then fled without stopping. I just bought the car 8 months ago, put a $250 alarm on the car, plus I just replaced the clutch (which I took out a loan to pay for the work to be done) 10 days before the negligent driver hit it and I still have to pay the loan back, but the car is totaled. Are they only going to pay low blue book for the car? That’s $1,500 less than I paid for the car, which blue book at the time was $600 more than I paid 8 months ago. I have receipts for the purchase of the car, the alarm, and the clutch replacement with the loan contract that I have to pay back, as proof. Are these consequential damages due to the the negligence of the driver that hit my car. Since I’ve been getting the run around about the rental, a relative has rented me one of their cars, but I have to pay a daily rate back to them at $24 per day. It’s already been 11 days, so that’s another $264 I have to pay back, and my damaged car is still sitting in the driveway. Every time I call Allstate, I talk to a different person, it’s always a different story, but nothings being done. I’m the victim, and have suffered many losses and yet I’m the one being punished because of another persons breach of duty and negligence. This is not right! What can I do? What should I do? If Allstate’s settlement comes in too low, can I reject the offer, counter-offer, then file a civil suit for Tort of Negligence to be fully restored to the true and full amounts of my losses? You’re thoughts are appreciated.

  • Bright Angels at Heart Marketi

    my insurance company rejected my sworn statement after three months