Lately, I have seen an uptick in the number of sworn proofs of loss (“SPOL”) that insurers are requesting to be completed with the number prefilled as the monetary amount the insurer believes is the correct amount. There is no problem with insurers requesting a policyholder to complete an SPOL. We often encourage policyholders to submit an SPOL early in the claims process to aid the insurer with its investigation of the claim, even when one has not been requested or is otherwise not required by the policy.
The issue here is the insurer prefilling the SPOL with the monetary amount the insurer believes is the correct amount. In other words, the insurer is asking the policyholder to swear to the amount the insurer believes is correct, not the amount the policyholder believes is correct. In some instances, the insurance adjuster is requiring this as a precondition to issuing undisputed claim payments.
So let us imagine what this looks like with a typical claim. A homeowner’s roof is damaged by a storm and the kitchen is soaked. Weeks later, the adjuster sends a form and says to sign it, under oath, and the insurer will release the money it already agrees it owes. The form is a sworn proof of loss, and the number on it is the insurer’s number.
That is concerning. It is a symptom that suggests insurance adjusters are doing the wrong thing, which may stem from a lack of training to know what they are really asking for.
What is a Proof of Loss Anyways?
The proof of loss is older than most of us think. Chip Merlin has traced it to the days of sailing ships, and his best educated guess is that the term comes from maritime practice. 1 A captain who came through a bad voyage would swear out a protest, a notarized account of what was lost and how it happened. In an 1802 New York case, Lenox v. United Insurance Co., 3 Johns. Cas. 224 (N.Y. Sup. Ct. 1802), the policy made the loss payable thirty days after “proof thereof.” The court accepted the captain’s protest, the bill of lading, and the invoice as sufficient preliminary proof.
In nearly every version, the story is the same. The person who suffered the loss tells the insurer what happened and what it cost.
Florida’s Third District put it plainly in Shivdasani v. Universal Property & Casualty Insurance Co., 306 So. 3d 1156 (Fla. 3d DCA 2020). The purpose of a proof of loss is “to inform the insurer of facts surrounding the loss, and to afford the insurer an adequate opportunity to investigate, prevent fraud, and form an intelligent estimate of its rights and liabilities before it is obliged to pay.” Id. at 1160-61 (quoting Allstate Floridian Ins. Co. v. Farmer, 104 So. 3d 1242, 1246 (Fla. 5th DCA 2012)). The court called it “the starting point” of the insurer’s investigation. Id. at 1160. The policy asked for the facts “to the best of your knowledge and belief.”
The court said the policyholder owed “a good faith, sworn statement,” and not “final estimates of all damages, charges, specifications and receipts.” Id. at 1161. The phrase “to the best of your knowledge and belief” matters here. It is the policyholder’s knowledge and belief, not the insurance adjuster’s belief. The insureds in that case never submitted any sworn proof of loss. The court held that was a breach of a condition precedent. Id. at 1161-62.
Texas courts see it the same way. In City of Spearman v. Texas Municipal League Intergovernmental Risk Pool, 601 S.W. 3d 72 (Tex. App.—Amarillo 2020), the court described the proof of loss as the step where the insured is “proffering evidence of the claim’s extent.” It also noted that statements in a proof of loss are “prima facie evidence” of the facts recited, though not conclusive or binding. Id. at 76. That is why you should be careful. Your sworn number becomes evidence, and it can be used against you.
One illustration is a 1960 Texas fire case, International Service Insurance Co. v. Brodie, 337 S.W.2d 414, 415–16 (Tex. Civ. App.—Fort Worth 1960, writ ref’d n.r.e.). The adjusters made an offer. Mrs. Brodie, the homeowner, didn’t like it. She testified that they “left me this piece of paper (which was a form of proof of loss)” and told her that “if I signed that and sent it in that would be the settlement on it.” In this case, the company adjuster testified that “[a] proof of loss is an agreement, the agreed amount of loss and damage under the policy,” and if the amount in the proof of loss is not agreed to, then it is “rejected on various reasons for deficiency.” Id. at 416. Notably, the court observed that the adjusters’ figures did not appear to have been written into the blanks of the form. However, Mrs. Brodie testified that the adjusters told her to fill it in and swear to it if she wanted to accept the figures they had quoted. Id.
The court didn’t accept that view. It said the only proof of loss the company would have taken was one that showed what the company was willing to pay, and she was not willing to accept that amount. So, the trial court could find she was justified in assuming no other proof of loss was demanded or expected. The court affirmed the finding that the company waived the proof of loss requirement. The adjuster there treated the proof of loss as a settlement document (which it is not), and the court looked past that.
A Practice Tip
The answer here is not to ignore the SPOL (with the insurer’s prefilled monetary amount). That is exactly what happened in Spearman. The city never signed it and never filed one of its own. The court held that this barred the city’s breach of contract claim. 2
The lesson is not to refuse and wait. The lesson is to seek clarification from the insurance adjuster by asking questions in writing. Do I have to swear under oath to the insurer’s amount (even though I disagree) to receive the undisputed payment? Can you tell me which page of the policy states that I must swear to the insurer’s monetary amount in order to receive the undisputed payment? Will the insurer consider me in breach of my obligations if I complete an SPOL with the monetary amount that I believe is correct?
While a lawyer’s advice should always depend on the relevant policy language and the law of the state involved, I have a hard time finding a scenario where I would advise a client of mine to swear under oath to an amount the policyholder does not believe is right. Send your own proof of loss with your best good faith figure and the support behind your number. An insurer already knows what it thinks the claim is worth. A sworn proof of loss exists to tell the insurer what you think.
1 “Where Did the Proof of Loss Requirement in a Property Insurance Policy Originate? What Was Its Original Purpose?” Property Insurance Coverage Law Blog (Nov. 17, 2024); “Proof of Loss Requirements: A 222-Year-Old Case Still Relevant for Modern Insurance Claims,” Property Insurance Coverage Law Blog (Nov. 18, 2024).
2 The city did not argue waiver or substantial compliance, which can excuse a missing proof of loss. Spearman at 75–77.
