Does a Requested Proof of Loss Have to Be Provided Before Demanding Appraisal or Filing Suit?

Proofs of loss were a topic of my first speech to the National Association of Public Insurance Adjusters at Carmel, California, in 1985. Generally, if an insurance company timely demands a proof of loss or if it is required under a policy, and the insurer does not waive the requirement, a proof of loss must be provided.

So, what is the downside to filing a proof of loss if demanded by an insurer? Generally, nothing. What is the downside by refusing to file a proof of loss? Maybe losing the entire claim. So, if an insurer properly asks for a proof of loss, provide a proof of loss.

A public adjusting firm and lawyers for the policyholder learned that proofs of loss are important in a decision issued this week.¹ In this case, the lawyers and public adjusters for the policyholder refused to file a proof of loss before filing suit. The insurer moved to dismiss the action for failing to do so and then the lawyers on behalf of the policyholder asked for appraisal.

In the brief regarding the proof of loss, the policyholder lawyers argued the following:²

The notion that the lack of a sworn proof of loss is essential for purposes of complying with conditions precedent is nothing more than a red herring designed to unnecessarily delay these proceedings. The information requested in a sworn proof of loss is the equivalent of the estimate that the Appellee submitted to the Appellant prior to the EUO.

The appellate court disagreed that a proof of loss is a “red herring” and held:

[T]his Court held that appraisal and suit are premature when the Insured has failed to comply with a residential insurance policy’s post-loss conditions. We have applied that principle through multiple hurricanes and the subsequent claims. See, e.g., State Farm Fla. Ins. Co. v. Fernandez, 211 So.3d 1094, 1095 (Fla. 3d DCA 2017) (“It is well-settled in Florida that all post-loss obligations must be satisfied before a trial court can exercise its discretion to compel appraisal.”). The Insured’s generalized description of loss at her EUO does not constitute a “sworn proof of loss” in compliance with the Policy, and the Insured has offered no reason for the failure to submit the public adjuster’s itemized claim report before, rather than after, the EUO and lawsuit.

All members of the Florida Association of Public Insurance Adjusters have heard me teach (after I demand that they listen) on numerous occasions that one of the first things which should be done is to determine if a proof of loss is a “demand proof” or a “time limit proof.” Time limit proofs should be filed within a time frame (ask for an extension if one cannot be made on time) and demand proofs should be filed if demanded. The forms insurance companies provide sometimes are not what is required under the policy. So, read what the policy requires and file an appropriate proof of loss.

Have a Happy Easter Weekend!

Thought For The Day

Life is full of a thousand red herrings, and it takes the history of a civilisation to work out which are the red herrings and which aren’t.
—Peter Greenway
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¹ Safepoint Ins. Co. v. Sousa, No, 3D18-1842, 2019 WL 1646100 (Fla. 3d DCA April 17, 2019).
² Safepoint Ins. Co. v. Sousa, No. 3D18-1842, 2018 WL 6575860 (Fla. 3d DCA, Appellee’s Answer Brief).