Recently, I was handling a case where I felt the insurer had waived its right to a Proof of Loss. In this particular case, the insurer initially demanded a Proof but when the policyholder contacted the adjuster to inquire about the specific requirements, the adjuster specifically told the client the obligation was being waived. Furthermore, the insurer had made a partial payment before the Proof was requested (which can be considered waiver under Florida law), and continued to negotiate the claim after the timeframe for filing the Proof expired.
Later, the insurer came back and demanded a Proof of Loss be submitted. At that point, the public adjuster wanted to dig in our heels and refuse to comply, however, I had a different perspective. Why not submit the Proof as requested, even though they have likely waived their right? Does the potential harm outweigh the good? In the end, we submitted the Proof as requested. The reasoning behind this decision is partially spelled out below. Keep in mind, these reasons applied to this specific case and other instances may call for a different response.
First, when dealing with any litigation it is important not to start so many battles that it takes the focus off the overall goal: recovering the amounts due and owed under the policy. We could have refused to submit a Proof and argued that the insurer waived its right to request one, however, it would have started battle that did not need to be fought. This would have taken our time and attention away from the more important task of proving coverage for the overall claim.
Second, the repercussions of not submitting a Proof of Loss can be far greater than the rewards. As I have discussed in previous posts, failing to submit a Proof of Loss when required to do so can be a breach of the insured’s post loss obligations. Sure, I could have argued that the insurer had waived its right to a Proof of Loss, and there is an excellent chance the court would have agreed. But is the risk worth the reward? Even in a case that seemed as clear as this one I did not believe it was.
Third, the information required for filling out the Proof of Loss was readily available to us. The PA had estimates already put together; it was just a matter of putting the information down on the form. I realize that in many instances the circumstances are different. All of the estimates may not be completed and filling out the Proof may be difficult or impossible because damages have not been fully established. In these cases, the insured should immediately request an extension, indefinite if possible, to make sure the timeframe for filing the Proof does not run out. Let the insurer know that you will comply with the demand, but that you need a longer period of time to gather the necessary information. As always, make sure you get the insurer’s response IN WRITING, so there is no confusion later.
Fourth, I find that avoiding small confrontations like this can help the claim move along much more smoothly. In some instances, complying with requests like this even when the insurer may not have the right to request it, can help garner some good will with the insurer or opposing counsel. Avoiding a potentially large fight by complying with a request that does not harm your client can help move the claim along to a favorable resolution.
Now, I know some of you may think that I am being naïve that there is nothing you can do to make some insurance representatives and defense attorneys behave like civilized and caring human beings. It is important to remember that, for the most part, they do have feelings and a little good will may go a long way. And hey, even if it doesn’t, you can still use the instance to show the court how hard the policyholder tried to cooperate.