Not sure when to sue your insurer? Property insurance policies typically contain a contractual suit limitation provision that sets the time within which policyholders may file suit on the claim. Some states allow the insurer to require in the policy that the policyholder file suit in as little as one year from the date of loss or lose coverage entirely, compared to 4- or 6-year statutes of limitations within which suit can be filed under other types of contracts.

A Pennsylvania federal court recently addressed on a motion to dismiss whether an insurer must show prejudice to enforce a suit limitations provision in its commercial property insurance policy issued by Allstate.1


Mail Quip alleged that its ink cartridge refill machine was “misappropriated” on or about March 17, 2015. The machine was insured under a commercial property policy that included coverage for theft of machinery and equipment. Mail Quip reported the $10,000 machine as stolen to the Pennsylvania State Police and submitted a claim to Allstate. The policyholder submitted a proof of loss on August 6, 2015, 2015. Allstate denied the claim on February 3, 2016. On April 6, 2017, the policyholder discovered the machine listed for sale on eBay.

On January 16, 2019, the policyholder sued Allstate for breach of contract and bad faith under 42 Pa. C.S.A. § 8371, for failing to promptly investigate and pay the claim. The insurer moved to dismiss the complaint because it was not filed within two years of the date of loss as required by the Allstate policy. Defendant argued that since the complaint alleged the date of loss was March 17, 2015, Mail Quip was required to sue by March 17, 2017.

Defendant argued that Plaintiff’s discovery of the theft on April 6, 2017 had no bearing on the timeliness of the lawsuit because the suit limitation period in the policy runs from the date of loss and not the date of discovery.

The policyholder argued that Allstate cannot enforce the suit limitation provision in the policy without showing prejudice and that its claim was subject to a four-year statute of limitations.

The District Court Decision

In its analysis the District Court highlighted Pennsylvania precedent pertaining to prejudice in late notice and suit limitations cases. The District Court first discussed Brakeman v. Potomac, which held an insurer must show prejudice to deny a claim for late notice.2 The court also analyzed Schreiber v. Pennsylvania Lumberman’s Mutual Insurance Company,3 which held the one-year statutory suit limitation in the fire policy barred policyholders’ suit brought two years after the loss and prejudice was not required. The Schreiber court distinguished Brakeman, holding that the suit limitation period was mandated by legislature as opposed to the contractual notice provision “dictated by the insurance company” in Brakeman.

The District Court then relied on Hospital Support Services, Ltd. v. Kemper Group, Inc.,4 a Third Circuit decision which held that an insurer did not have to show prejudice to enforce a suit limitation clause. The District Court ruled that because Mail Quip alleged its loss happened on or around March 17, 2015, the action should have been brought by March 17, 2017, at the latest. The District Court dismissed the case.


The Mail Quip decision underscores the critical importance of suit limitation provisions. The takeaway is that the policy must be read carefully to determine the suit limitations period and to resolve any issues before it expires. In some states, like Pennsylvania, the suit limitations period begins to run from the date of loss. Depending on the jurisdiction, the period might be tolled during the insurance company’s investigation of the claim until the claim is denied. If the suit limitation period is not tolled during claim investigation in your state and is close to expiration, consider asking the insurer for a reasonable extension while the claim process is ongoing. If the insurer denies the request, then a lawsuit must be filed to protect the policyholder’s interests.

If you have questions about your insurance claim or suit limitation, there are several excellent archived posts by my colleagues discussing suit limitations issues in various states across the country. Feel free to call us at (732) 704-4647 or e-mail me directly at with your questions.
1 Mail Quip, Inc. v. Allstate Ins. Co., No. 19-223, 2019 WL 2255767 (E.D.N.Y. May 23, 2019).
2 Brakeman v. Potomac Ins. Co., 472 Pa. 66 (1977).
3 Schreiber v. Pennsylvania Lumberman’s Mut. Ins. Co., 498 Pa. 21 (1982).
4 Hospital Support Services, Ltd. v. Kemper Group, Inc., 889 F.2d 1311 (3d Cir. 1989).