Property insurance is purchased to help protect an insured with the consequences of a natural disaster or serious storm. Far too often we hear from confused policyholders when their insurance carrier attempts to delay payment of a valid covered claim or unreasonably delays the payment of covered benefits. Fortunately, Wyoming provides several legal avenues to recover those improperly denied or delayed benefits.
The first remedy, breach of contract, occurs when there is a covered loss (hail or wind for example) and the insurance carrier refuses to pay for resulting damage to the property. Wyoming requires that a property owner bring an action for breach of contract within ten years from the date the property owner knows, or has reason to know, of existence for the cause of action. Wyoming allows insurance companies (and they often do) to include a provision within the insurance policy which may shorten the ten-year period in which to file a claim for breach of contract.1 Therefore, it is critical that a policyholder determine whether the policy shortens the period to file a lawsuit, and what that timeframe has been reduced to.
The second cause of action relates to Wyoming’s statutory requirement that insurance carriers timely investigate and adjust property damage claims. When an insurance carrier fails to decide a claim within forty-five days after it has been submitted, its failure to do so constitutes refusal to pay, even if the insurance carrier later attempts to cure that refusal by paying benefits. The statute encourages the prompt settlement of justifiable claims by providing a penalty for an insurance carriers untimely claims handling. Even if the insurance carrier later makes payment of a denied or unreasonably delayed claim, the carrier is still liable for its failure to properly decide the claim within forty-five days of its submission.2
Finally, Wyoming provides policyholders with recourse for an insurance carriers bad faith claims handling. A policyholder must demonstrate that a reasonable insurer would not have denied or delayed payment of benefits under the circumstances of the claim, and that the insurance carrier had knowledge or recklessly disregarded the lack of a reasonable basis for denying the claim.3
It is important to identify and understand the time limitations applicable to each of the above described causes of action. Failure to bring a claim within its prescribed statute of limitations may result in a dismissal and inability to recover benefits. If your property damage claim has been improperly denied or unreasonably delayed, consider speaking to an attorney experienced in handling property insurance claims to discuss the details of your claim and options available under the law.
1 Nuhome Investments, LLC v. Weller, 81 P.3d 940 (Wyo. 2003).
2 Darlow v. Farmers Ins. Exch., 822 P.2d 820, 827-28 (Wyo. 1991).
3 McCullough v. Golden Rule Ins. Co., 789 P.2d 855, 860 (Wyo. 1990).