I recently received an inquiry concerning how long an insured has to file an initial property damage claim in Alabama.
Certainly, notice of the claim must be given within the applicable statute of limitation, which cannot be shortened by the policy to less than six-years in Alabama.
However, most property insurance policies require “prompt” notice or notice “as soon as practicable.” Alabama courts have construed this policy language to require “notice within a reasonable time in view of the facts and circumstances of the case.” St. Paul Fire & Marine Ins. Co. v. Elliott, 545 So.2d 760 (Ala. 1989); Progressive Specialty Ins. Co. v. Steele ex rel. Steele, 985 So.2d 932, 941 (Ala. Civ. App. 2007); Travelers Indem. Co. of Connecticut v. Miller, 86 So.3d 338, 341 (Ala. 2011); State Farm Fire & Cas. Co. v. Wiggins, 972 F. Supp. 570, 573 (M.D. Ala. 1997).
When determining whether a delay in giving notice was reasonable, only two factors may be considered: the length of the delay and the reasons given for the delay. United States Fid. & Guar. Co. v. Baldwin County Home Builders Ass’n., 770 So.2d 72, 75 (Ala. 2000). Whether notice of the occurrence or claim was given to the insurer within a reasonable time rests on the reasonableness of the delay. Id.
Unlike Florida and several other states, prejudice to the insurer from any such delay in providing notice is not a factor. Id.
Where an insured fails to show a reasonable excuse or the existence of circumstances which would justify a protracted delay, the court may find the delay unreasonable as a matter of law. Southern Guaranty Insurance Co. v. Thomas, 334 So.2d 879 (Ala. 1976).
Alabama courts have held that a “five-month delay in giving notice is sufficiently protracted as to require the insured to offer evidence of a reasonable excuse for the delay. See Phoenix Assurance Co. v. Harry Harless Co., 303 F.Supp. 867 (N.D.Ala.), aff’d, 414 F.2d 794 (5th Cir. 1969) (four-month delay); Pharr v. Continental Cas. Co., 429 So.2d 1018 (Ala. 1983) (eight-month delay); Southern Guar. Ins. Co. v. Thomas, 334 So.2d 879 (Ala. 1976) (six-month delay).” Nationwide Mut. Fire Ins. Co. v. Estate of Files, 10 So.3d 533 (Ala. 2008).
A finding that the insured failed to comply with the notice requirement of the property insurance policy will preclude recovery. Alabama insureds should be mindful to quickly provide notice of a loss to avoid this harsh result.
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