With the closure of the statute of limitations for Hurricane Irma related claims, we are faced more and more with claim denials based, in part, on “prompt notice” and/or “late notice” language from the insurance carrier. But was the claim actually reported late? Well, that depends on the reporting requirements as outlined in the insurance policy.

Insurance policies typically require the insured to “[g]ive prompt notice” to the insurance company, but there are some that also allow you to “[g]ive prompt notice to… your insurance agent.” We have come across this scenario in several claims, and the pattern appears as follows:

The loss event, i.e., Hurricane Irma, takes place. The insured notices some damage and calls their insurance agent. The agent advises them not to report a claim for any number of reasons; could be a deductible issue, could be to avoid raising of premiums, etc.

However, when the insured begins to make repairs or has the property professionally inspected, significant damages become apparent. Now the claim is called in directly to the insurance carrier. The carrier later denies the claim because the loss was not reported until “X” number of days following the event, and therefore the carrier claims prejudice.1

In the above scenario, which we are finding to be more commonplace, the initial reporting to the insurance agent complies with the policy terms that allow for notice to be provided to the insured’s insurance agent. The carrier, therefore, cannot assert a denial for late notice based on when they received notice of the loss, but only from the date of reporting per the terms of the policy. In the above scenario, that would be from the day the insurance agent was notified of the loss event.
1 Prejudice, in Florida, is presumed upon a showing by the carrier that the loss was not promptly reported; however, the insured can overcome this presumption by demonstrating a lack of actual prejudice. See, Bankers Ins. Co. v. Macias, 475 So.2d 1216 (Fla. 1985).