There are countless circumstances immediately following a loss that necessitate emergency mitigation services. Common examples of what are known as “reasonable emergency measures” include tarping a roof to prevent further water intrusion, performing dry out services, or any number of temporary repairs aimed at preventing further loss or damage. While policyholders have a self-evident interest in ensuring these measures take place (they want to protect their home/property), it is also consistently required under homeowners insurance policies. This is due in large part to practically all policies containing one version or another of the following provision:
Continue Reading Exceeding Policy Limits for Reasonable Emergency Measures: Steps to Preserve Right to Receive Payment

(NOTE: There will not be a Tuesday @ 2 With Chip today due to the Windstorm Conference. Tuesday @ 2 will return next week)

While there are many issues that consistently form the basis of a dispute between insurers and insureds in property insurance claims (coverage issues, causation, notice requirements, etc.), one universal principal is generally accepted on both sides: The insured, if capable of doing so, has the duty to reasonably mitigate damages to reduce their loss.
Continue Reading Can an Insurer Rely on an Insured’s Mitigation Efforts to Deny Coverage or Preclude a Business Interruption Claim?

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.
Continue Reading If I Start Making Repairs, Does It Affect My Insurance Claim?

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?
Continue Reading Collecting For Immediate Remediation Costs

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?

Continue Reading Insureds that Prematurely Initiate Repairs Without the Approval of the Insurer May Do So At Their Own Peril

I often encounter situations where a client has suffered a property loss and wants to know if they are required to make repairs and mitigate damages prior to being paid by their carrier. In this situation the carrier has usually paid an insufficient amount towards repairing the loss or has not paid out any monies.

Continue Reading In New York, Insureds Likely Have Duty to Mitigate Damages in Property Insurance Claims

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.

Continue Reading The Gamesmanship Of The Property Insurance Claims Process…Yes You Have To Show The Insurer The Damaged Property, But You Also Have To Repair It Promptly

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.

Continue Reading Mitigation Efforts Are Recoverable as Extra Expenses Outside the Period of Interruption – Understanding Business Interruption Claims, Part 34

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.

Continue Reading The Insured’s Duty to Mitigate – Understanding Business Interruption Claims, Part 30