One question I get asked by clients after a storm has damaged their home is: “Can I start making repairs?” This can be a difficult question as the real-world factors of cost, time, availability of materials, and labor are important considerations. It is also important to understand how repairs can affect your insurance claim as most residential insurance policies I deal with include what appear to be contradicting duties to mitigate and the duty to allow the insurance company to inspect.
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Insurance policies ordinarily contain terms that provide that an insured must exhibit the damaged property for the insurance company’s inspection after a loss. The same policies also provide that an insured has a duty to mitigate damages to the property to prevent further damages. Does an insured breach the insurance policy by preventing the insurance company from assessing the full extent of damages if remediation work is performed at the property prior to the insurance company’s inspection?
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In Paslay v. State Farm General Insurance Company,1 the California Court of Appeal addressed an issue insureds and public adjusters regularly face: How quickly should you address, remediate, and repair damaged property to comply with your obligation to “mitigate” the damages to the property, without “prejudicing” the insurers investigation?


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Insurance policies have certain provisions that must be complied with in a property insurance claim. These are called duties after loss, and if reasonably requested by the insurer, they must be complied with. Recently, an insurer in New York became involved in litigation over whether the policyholder had shown it the damaged property following a claim.1 The insurer claimed the policyholder failed to show it the damaged property, which affected the insurer’s ability to determine whether there was a loss and the extent of any damages. There are often a couple policy provisions at play in this scenario. There is a duty to mitigate damages and perform necessary repairs as quickly as possible. On the other hand, there is a duty to show the insurer the damaged property.


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In a business interruption claim the insured has an obligation to mitigate its losses by reasonable means, but, as illustrated in Insured’s Duty to Mitigate – Understanding Business Interruption Claims Part 30, insureds should not be required to go out on a limb to protect the insurer and then get a hand slap in response.


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The insured’s duty to mitigate its damages after a loss is a well-recognized principle in property insurance law. In business interruption claims insureds are required to take affirmative steps to reduce their loss of earnings after a loss. While an actual business loss occurs only where the insured is unable to reduce or eliminate lost profits, insureds are not necessarily required to engage in super-heroic-acts to mitigate their business interruption loss.


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Evaluating a business interruption claim is not as simple as it sounds. After reading Chip’s blog, How to Value an Oil Spill Claim–Not an Easy Task, I sincerely hope that everyone involved in this oil mess is properly trained in business valuation losses. Sometimes, as a result of inadequate or improper training, insurance companies can put their policyholders in an untenable position.


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(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is part of a series he is writing on post-loss duties). 

I recently took the deposition of an independent adjuster who worked on behalf of one of the larger insurers in the state. While most of the deposition was pretty standard, I was shocked when the adjuster said that he had advised the homeowners to stop making temporary repairs to their home. When I asked him to explain why he did not think it was a good idea for temporary repairs to the roof and exterior of the building to be completed, he answered that coverage had not been established yet and he did not think the repairs should be made until it was.


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