Importance of Compliance with Post-Loss Obligations under a Homeowner’s Insurance Policy

When a hurricane or other major catastrophe causes devastating damage to a region, insurance companies work tenaciously to minimize the financial impact of payouts.  This can mean stalling the process through requests for information or procedural maneuvers or denying a meritorious claim.  Effective navigation around such tactics can mean that your insurance dispute is resolved more promptly and satisfactorily.  While an insured can file a lawsuit for breach of contract and exercise the right to take advantage of the appraisal process, this step cannot be taken until an insured has complied with the insurance policy’s post-loss obligations.

The case of United Prop. & Cas. Ins. Co. v. Conception, No. 3D11-889, 2012 WL 634099 (Fla. 3d DCA Feb. 29, 2012) provides an example where an insured was found to have jumped the gun in seeking an order compelling appraisal.  The insured’s property was damaged by Hurricane Wilma.  The insurer conceded coverage for the loss and tendered payment in the amount of $7,000 to cover the damage.  Subsequently, a public adjuster inspected the premises and submitted a supplemental claim with the insurance company for $122,769.40.  The public adjuster also requested an appraisal to determine the amount of loss.  The insured than filed suit for breach of contract against the insurance company.

The insurance company contended that the request to compel an appraisal was premature because the insured had failed to comply with a range of duties required by the policy that included: (1) providing documents and records requested by the insurance company; (2) cooperating with an examination under oath and signing it; (3) sending the insurer a sworn and signed proof of loss (POL) within 60 days after the insurer requested the POL.  In short, the insurer alleged that the insured failed to comply with his post-loss obligations.

The policyholder argued that his exercise of appraisal rights was not premature because he had provided sufficient information for the insurance company to evaluate his claim.  He indicated that he attended an examination under oath and undertook repairs with a neighbor although the insured did not have receipts.

The insurance company responded that the policyholder declined to provide requested records and documentation, failed to respond to material questions during the examination under oath and submitted no sworn statement in the insured’s proof of loss.  The insured responded that the trial court had sufficient sworn documents in the file, including answers to interrogatories to determine that the insured’s post-loss obligations under the policy had been met.

The trial court ruled for the insured stating, “The Court has reviewed the motion to compel appraisal, and all documents filed in support thereof and opposition thereto and the complete court file.”

The appellate court overruled the trial court’s ruling of summary judgment for the insured based on the existence of a question of fact regarding whether the insured had adequately complied with post-loss obligations.  The appellate court did not specifically conclude that the insured had not sufficiently complied with its post-loss duties, but it indicated that the trial court failed to make such a finding based on the evidence.

The bottom line is that a homeowner’s policy will have specific duties assigned to the insured who suffers a loss by a covered peril.  An insured should carefully review his or her policy after a hurricane or other peril causes damage to determine what duties must be fulfilled.  In the best case, non-compliance with such duties will delay payment of your claim whereas failure to comply with these post-loss obligations can result in denial of your claim in a worst case scenario.

If you have suffered damage to your property and have questions about your rights and duties under your homeowner’s policy, we can answer your questions.  My law firm represents policyholders in claims disputes in Miami and throughout Florida.  The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations.  No Recovery, No Lawyer Fees.  Call 305-461-1095 or Toll Free 1-866-71-CLAIM.

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