It’s never good to be late on your first date . . .

It’s never good to be late on your first day of class . . .

It’s never good to be late on your first day at work . . .

It’s never good to be late when presenting your claim to your insurance company.

In my blog post last week, I explained that an insurer’s duty to investigate a claim does not arise until the insured complies with the notice provisions in the policy, which usually requires both written notice of the claim and written proof of loss. But what happens if you are tardy with either the notice of the claim or the proof of loss?


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I recently blogged about the insurer’s duty to “thoroughly” investigate a claim and what constitutes a “thorough” investigation. But when does the duty to investigate arise? In California, an insurer’s duty to investigate does not arise until it has notice of a claim. While this sounds simple enough, there are some aspects of the notice requirement that warrant discussion. For one, in order to maintain an action based on bad faith, the insurer must be shown to have had actual, as opposed to merely constructive, notice of the insured’s claim.1

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The Florida Fourth District Court of Appeals has been busy with late notice Hurricane Wilma cases on appeal. Trial courts within the Fourth District have disposed of these cases, finding as a matter of law that late notice prejudiced insurers. Judges generally decide questions of law, while questions of fact are left for the trier of fact, typically a jury. It is often a reversible error for a judge to take a factual determination away from the jury.


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On June 27, 2011, in What Has Happened To The Rebuttable Presumption Of Prejudice In A Recent Late Notice Case, I discussed how the Florida Fourth District Court of Appeal had issued its opinion in Kroener v. FIGA1 did not discuss the Florida Supreme Court’s rebuttable presumption of prejudice test and held that notice of a loss more than two years two months after the occurrence was not prompt notice and was insufficient to bar the claim.


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A case issued yesterday shows when late notice is simply far too late. The policyholders lost in Kramer v. State Farm Florida Insurance Company,1 because they had no proof that the insurer was not prejudiced by the late notice of the loss. There should be an asterisk to this post because the lesson is that if the engineering experts cannot determine the covered cause of an admittedly late noticed loss which could have resulted from uncovered causes, courts will not generally be helpful to policyholders seeking recovery.


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On June 13, 2012, The U.S. District Court for the Southern District of Texas granted summary judgment in favor of a liability insurer that seeking a declaration of non-coverage for a claim for cleanup costs associated with an environmental discharge. In St. Paul Surplus Lines Ins. Co. v. Davis Gulf Coast Inc., No. 11-0403 (S.D. Tex. June 13, 2012), the district court found that the insured failed to provide notice of the claim within 90 days of discovering the leak, as required under the policy.


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Those familiar with Hurricane Wilma litigation in South Florida may be fully aware of a recent trend of trial court rulings which take cases away from juries, seemingly depriving policyholders of their days in court. Summary judgment rulings on “late notice” defenses basically ended the cases and took the factual determinations away from the jury. Terms such as “late notice as a matter of law” and “the insurer was prejudiced in its investigation of the damage” suddenly appeared at summary judgment phase rulings. Many members of the plaintiffs’ bar contend that the nature of such disputes contain factual issues that should not be decided by courts at the summary judgment phase, but should be left for determination by a jury.


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Hurricane Wilma litigation carries on in Florida courts, now almost 6 and a half years after the storm. One issue often raised in the litigation is timely notice of the claim. While policies differ, most require that the insured provide notice of a loss to the insurer with some degree of expediency. Late notice of a claim is generally ground for an insurer’s defense in not paying the claim. Whether notice was timely is generally a question of fact for the jury that precludes summary judgment. However, a South Florida federal court reminded us a few weeks ago that this is not always the case.


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After two recent trials in federal court in South Florida, two different juries found different results in allegedly late filed hurricane insurance claims. Most property insurance policies require that the policyholder notify the insurance company of loss or damage with some degree of expediency, however most policies do not specify when notice will be late enough to deny the claim. Under current Florida law, late notice will only bar an insurance claim if it prejudices the insurance company. If the notice is determined to be late, the insurance company is entitled to a presumption of prejudice that may be rebutted by the policyholder. See Bankers Ins. Co. v. Macias, 475 So. 2d 1216 (Fla. 1985).


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How often do insurance companies get it right the first time? If they don’t, whose responsibility is it to correct them and give them a second chance? As demonstrated through litigation on many hurricane claims, the insurance companies may tell you it is the policyholder’s responsibility to notify them of newfound damage after a claim has already been resolved. Recently, Judge Robert N. Scola, Jr., of the United States District Court for the Southern District of Florida, disagreed with that logic, holding that a policyholder did not have to give the insurance company a second chance before suing it.


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