The “Suit Against Us” provision is typically found in the “Conditions” section of a homeowners insurance policy. This provision explains to an insured when he or she can initiate a lawsuit against the insurance carrier. However, the timeline reflected in the provision may not be enforceable as certain states do not allow the insurance policy to conflict with the state’s Statute of Limitations for Breach of Contract Actions.
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Representing governmental entities regarding their insurance claims is very different than representing private individuals. At least this has been my experience after representing numerous governmental school districts, municipalities, ports, power authorities, and even judicial entities. The photo above is of me and Merlin Law Group attorney Javier Delgado. Javier and I have jointly been involved in governmental claims in Texas, Florida, New Jersey, New York, Oklahoma, Puerto Rico, and the U.S. Virgin Islands. Experience means a lot in our business and Javier, who worked his way through law school as an insurance claims adjuster, has practical experience regarding how property insurance claims should be settled as well as legal experience about how governmental claims are often undervalued by insurance companies.
Most of these governmental entities have fantastic plans to help their constituents if a disaster strikes, but they usually have zero plans about what to do for their own insurance claim.
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In 2017 and 2018, California experienced devastating wildfires, during which thousands of structures, homes, and businesses were destroyed. California insurers scrambled to adjust the thousands of claims but it was quickly recognized that they were not prepared to timely handle losses due to a large-scale natural disaster. The California legislature responded, enacting several amendments to the law extending the time policyholders had to collect additional living expenses and replacement costs.
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Louisiana federal courts have been split on the issue regarding the applicable prescriptive period (statute of limitation) for first-party insureds’ bad faith claims against their insurers. Recently, the Louisiana Supreme Court granted review of Smith v. Citadel Insurance Company, to definitively rule on the primary legal issue presented: “the proper prescriptive period applicable to a first-party bad faith claim against an insurer.”1
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One of the first questions I’m often asked by a client is, “What is the statute of limitations in XYZ state?” The Property Insurance Coverage Law Blog has not addressed the statute of limitations in North Carolina, and below is a quick cheat sheet for North Carolina policyholders and their representatives.
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In a recent decision,1 a federal court interpreting Pennsylvania law held that the discovery rule does not apply in insurance actions and the statute of limitations for an insured to bring suit against their insurance company begins to run on the date of loss and not the date the insured becomes aware of the loss.
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Not sure when to sue your insurer? Property insurance policies typically contain a contractual suit limitation provision that sets the time within which policyholders may file suit on the claim. Some states allow the insurer to require in the policy that the policyholder file suit in as little as one year from the date of loss or lose coverage entirely, compared to 4- or 6-year statutes of limitations within which suit can be filed under other types of contracts.
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Excess insurance policies are often written to follow form, but then an excess carrier may issue a policy that does not follow the bid upon form. Insurance agents and excess lines brokers can certainly do a much better job at the point of sale by reading the policies they sell and broker so the insurance coverage for which they are arranging is actually sold.
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While the timeframe to file a legal action is generally defined under the Statute of Limitations, in some states an insurance policy can contractually establish a shorter period to file a legal action. In a recent California case, Keller v. Federal Insurance Company,1 the Ninth Circuit upheld a Legal Action Against Us clause, finding the homeowners waited too long to file a lawsuit.
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The statute of limitations period applicable to a breach of contract cause of action in New York is ordinarily six years. However, parties to a contract may agree, in writing, that any lawsuit must be commenced within a shorter period of time. Moreover, while the statute of limitations on a breach of insurance contract generally starts to run on the date that coverage is disclaimed by the insurance company, the parties to an insurance contract are likewise free to include distinct language in their agreement demonstrating that they intend for the limitations period to run from the date of the underlying loss as opposed to the date of the disclaimer of coverage.
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