One of the most important issues that arise in insurance coverage disputes involves a delayed notice of claim. This is a common justification given by insurance carriers for denying coverage. While a notice of claim that does not comply with the time requirements set forth in an insurance policy can provide a legitimate basis for insurance carriers to deny claims, the insurance company must be prejudiced by the delay. The obligation is on the policyholder in such situations to prove that the insurance company was not prejudiced. However, a policyholder who is diligent about taking photos, obtaining inspections and preserving other evidence might be able to establish a lack of prejudice even after the property damage that constitutes the basis of the claim has been completely repaired.
A federal judge in another state recently decided a case in favor of the insured although the notice of claim was provided two years after the loss. Although this case is not precedent under Florida law, the facts are still instructive in terms of the types of evidence that might be used to overcome a claim of prejudice by an insurance carrier in a late notice claim. In Michigan Millers Mut. Ins. Co. v. Asoyia Inc. et al., the court found that the insurer was entitled to coverage despite a two year delay in providing notice of loss.
The insurance company contended that it had no duty to defend or indemnify for damage allegedly caused by the insured’s product because the delayed notice of claim deprived the insurer of the opportunity to investigate. The insured’s product (soybean oil) caused a fire. The insurance company introduced testimony at trial that the delay prevented the carrier from adequately investigating the liability claim because the structure was completely repaired before a notice of claim was submitted. The liability insurance carrier also claimed that the inability to investigate the claim prevented the insurer from determining if all witnesses had been identified and interviewed. The insurer also provided an expert opinion that the investigation of the fire was inadequate in numerous ways.
However, the court focused on the investigation initiated by the insured in the aftermath of the fire. The insured introduced testimony from the fire marshal who indicated that he was able to confidently identify the origin and cause of the fire. The insured also provided testimony of a cause and origin expert, electrical engineer and others involved in the fire investigation. The witnesses authenticated photos taken at the scene of the fire and testified regarding the measures taken to preserve evidence following the fire. The court determined that the insurance company was not prejudiced by the delayed notice of claim. The court concluded that the evidence gathered and preserved was sufficient for the liability insurer to conduct an adequate investigation of the claim.
This case demonstrates the importance of providing a timely notice of claim and engaging in appropriate efforts to preserve evidence of the cause, nature and extent of your loss. While a delayed notice of claim can prove fatal to an insurance claim, an experienced insurance claims attorney might be able to prove that the insurer did not suffer prejudice because of the delay. If you have sufficient evidence of your loss, including witnesses and inspections by experts following a loss, you might be able to overcome a denial of you claim based on late notice.
If you have questions about your insurance claim, 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.