How Late Reporting Can Deny Your Claim

How many people have taken the time to sit down and read their property insurance policy cover-to-cover?

The answer is, probably not many. Most people rely on their insurance agent to get them the best policy with the highest coverage for their budget. However, most people are generally unaware of all of their responsibilities under the insurance policy that could impact them if and when they have a claim and usually don’t find out until it’s too late.

One such duty is the duty to give prompt notice after a loss which is included in every policy. Some policies even place a separate timeline on specific kinds of losses such as a 14 day period within which you are required to report a water loss. Report late and the insurer may not have a duty to compensate you for your loss.

One example of this was recently decided in the De la Rosa v. Florida Peninsula Insurance Company, 4th DCA (May 16, 2018) case. Here, the insureds had plumbing issues with their master bathroom in April 2014. The insureds made significant plumbing repairs hoping that it would resolve the problem. The insureds then renovated their master bathroom in February 2015 and decided to file a claim with their insurer in July 2015.

The insureds stated that they took a long time to report the claim to their insurer because they were unaware of their rights. Their claim was denied because the insurer asserted that the late reporting of the claim had prejudiced their ability to properly inspect the loss. Ultimately, despite the insureds documenting the damage and maintaining portions of drywall, piping, and other building materials related to the leak as well as having the opinion of an expert in support of their position, the court ruled in favor of the carrier due to the late notice.

The court held that if insured breaches the notice provision of the insurance policy, then prejudice to the insurer will be presumed, but may be rebutted by a showing that the insurer has not been prejudiced by the lack of notice. This is an extremely difficult, uphill battle for insureds as evidenced by the De la Rosa case due to the presumption of prejudice to the carrier because of the late reporting.

So what are insureds to do?

If and when you have a loss, you should immediately do the following:

  1. Perform only temporary repairs. These repairs should be limited only to what is necessary to protect the property from further damage.
  2. Maintain any pipes, drywall, building materials, etc. that you may have that would exhibit the damage to the property. Try to keep them in a place where their condition will be preserved. Do not discard these materials until your claim is resolved.
  3. Take photographs and videos of the property before and after any repairs have been made. Also photograph any damaged contents or personal property.
    Review your policy to determine your obligations now that a loss has occurred. Contact a claims professional such as a public adjuster or attorney to help you if you need assistance.
  4. Make sure your claim is timely reported to your insurer. Allow your insurer the opportunity to timely inspect the property as well as the damage so that they will not be able to assert that you have failed to comply with your post-loss obligations.
  5. Actively participate in your claim by responding to requests by your insurer. Your carrier may ask you for any repair documentation, a recorded statement, a sworn proof of loss, and other documentation that will assist them in their investigation.