Late notice of damage to roofs is a common issue. Most people do not report damage from a windstorm to a roof unless it leaks. Do insurers expect that after every windstorm that their customers report a potential loss to them for inspection? Do insurers expect all of their policyholders to climb up on their roofs to look for damage?

From a practical standpoint, unless something or somebody brings roof damage to the attention of the policyholder, how does one report that there is roof damage unless you know of the damage? Accordingly, late notice of loss to damaged roofs is a common claims problem.

A recent South Carolina decision provides an example.1 The facts of the case were noted by the trial court:

Prior to Hurricane Matthew hitting South Carolina in October of 2016, the buildings belonging to the various Golf Colony plaintiffs had experienced numerous leak issues. …However, the various Golf Colony plaintiffs did not keep a master log or list of unit owners’ complaints. Therefore, Plaintiff does not know definitively if there were leaks or if other repairs were made to the units….In addition, on March 20, 2018, 18 months before Empire was notified of the Hurricane Matthew claim, a roofer…informed Plaintiff that a hailstorm had damaged the Plaintiff’s roofs….On May 15, 2018…Plaintiff’s property manager, reported damage to the roofs of the condominium buildings by hail and/or wind (unrelated to Hurricane Matthew) to their property insurer at that time, certain Underwriters at Lloyd’s, London, whose claims were administered by a company called ICAT Boulder Claims (those insurers are collectively referenced as ‘ICAT Boulder Claims’)…The date of loss for this hail and/or wind damage was listed as March 20, 2018.

Between June 1, 2018 and June 20, 2018, engineers hired by ICAT Boulder Claims, Christopher C. Basile, P.E. and J. Parks Payne, Jr., P.E. of Rimkus Consulting Group, Inc….

Let me stop in the middle of that last sentence. I bet that most readers of this blog, given that Rimkus was hired by the insurer to investigate the hail damage claim, can properly guess whether the hailstorm was denied. The unique part of this case was that a subsequent consultant hired by the policyholder agreed with Rimkus about the hailstorm damage:

Shortly after the ICAT Boulder Claims denial, Plaintiff retained a new consultant, Lewis O’Leary of ProBuilders…to verify or dispute the Rimkus Report’s findings……O’Leary is not a licensed professional engineer, but rather is a licensed general contractor….In his Report, Mr. O’Leary indicated his agreement with the Rimkus Report that the hail damage to the Plaintiff’s property was relatively minor….In addition, the ProBuilders Report opined that Hurricane Matthew may have caused damage to the roof, structure, sheetrock and interiors.

So, 35 months after the loss, the policyholder provided the insurance carrier notice of the hurricane Matthew loss. This is what the court found regarding this late reporting of loss:

It is undisputed that Empire did not receive a formal notice of loss from Plaintiff until nearly three (3) years after the storm event. Specifically, Hurricane Matthew hit South Carolina on or about October 8, 2016. Empire knew nothing of Plaintiff’s Hurricane Matthew damage claims until, at the earliest, September 10, 2019, which was the date of Plaintiff’s property loss notice. To construe “prompt” as encompassing a 35-month delay would remove all meaning from the word and fail to give effect to the intentions of the parties….Moreover, the rights of innocent parties are not in jeopardy. Rather, the insurance in question here is first-party coverage; and therefore, Plaintiff cannot be an ‘innocent party’ that ‘did nothing to jeopardize coverage.’ Here, under the terms of Section E(3) of the of the Condominium Association Coverage Form, the Plaintiff had an express duty to ‘[g]ive [Empire] prompt notice of the loss or damage, include a description of the property involved.’ Accordingly, Plaintiff cannot meet the innocent party exception because it had a duty under the Policy to inform Empire of any loss or damage as soon as possible.

In South Carolina, giving notice of loss 35 months after the loss, without more, is simply too late.

Thought For The Day

It is never too late to correct our mistakes. And if we do not, we risk repeating them.
—Lisa Madigan
1 Golf Colony Resort II v. Empire Indemnity Ins. Co., No 4:19-cv-3102 (D.S.C. Dec. 2, 2021).