Last month, I wrote about the statute of limitations in Tennessee for a property damage claim and mentioned that the statute of limitations can be shortened by the terms of the insurance policy.

I recently came across an insurance policy that contained the following language:


No suit, action or proceeding for the recovery of any claim under this policy shall be sustainable in any court of law or equity unless the Insured shall have fully complied with all the requirements of this policy, nor unless the same be commenced within twelve (12) months next after inception of the loss provided, however, that if under the laws of the jurisdiction in which the property is located such limitation is invalid, then any such claims shall be void unless such action, suit or proceedings be commenced within the shortest limit of time permitted by the laws of such jurisdiction.

Tennessee courts construe the policy language, “. . .the same be commenced within twelve (12) months next after inception of the loss,” to mean that an action must be brought within 12 months after the cause of action accrued. However, even if an insured brings an action more than 12 months after the loss occurred, the action is still timely for purposes of the statute of limitations if it is brought less than 12 months after the first denial of liability by the insurer.1 Therefore, if your policy contains the above language, make sure you determine the date of the insurance company’s first denial of the claim, as that may trigger the date by which you must commence an action in court.

1 See Hill v. Home Ins. Co., 125 S.W.2d 189, 192 (Tenn. App. 1938), citing Home Ins. Co. v. Hancock, 62 S.W. 145 (Tenn. 1901). See also Phoenix Ins. Co. v. Brown, 381 S.W.2d 573 (Tenn. App. 1964).