09/05/2018
An Insured's Post-Loss Duty to Cooperate in Property Insurance Policies & Fraud.
Most property insurance policies, such as homeowners, dwelling fires, or commercial property policies, contain many duties and obligations called “conditions” that an insured must first comply with before he or she may 1) recover under the policy; or 2) sue an insurer for a breach of the insurance policy.[1]
To learn about these conditions, an insured must first read his or her entire policy, not only the declaration page. Policies have varying conditions regarding the insured’s duties after a loss. All contain some post-loss duties that primarily intend to benefit the insurer. In examining the insured’s post-loss duty to cooperate, there is a focus on allowing the insurer to timely investigate the loss and on protecting further damage to the insured property.
This post-loss duty to cooperate is especially important because willful noncooperation of the insured is a valid defense under a policy of noncompulsory insurance, like a homeowners or commercial property policy.
An insured’s duties after a property loss
1. Provide prompt notice of the loss to the insurer or the insurer’s agent
Your policy will place limits on the amount of time you have to provide notice of loss. It can be one or 2 years.
2. Protect the insured property from further damage. Assess what is needed and notify the insurer in writing of what is needed and the cost. If you can afford it, take steps to preserve the property.
3. Provide a timely sworn statement in proof of loss. This is a simple requirement. You can always submit an amended proof of loss. You can always explain that the proof of loss is based on a preliminary estimate and may change. In one case a public adjuster failed to ever present a proof of loss. We were able to overcome this mistake by arguing that the requirement was waived because the insurance company handled the claim as if a proof of loss had been submitted.
4. If requested, appear for an examination under oath. This is like a deposition but not a deposition. Your lawyer can coach you and make objections that would never be accepted in depositions.
Fraud
A material misrepresentation
1. If you or your public adjuster or anyone else authorized to act on your behalf says something which is untrue and is material it can give the insurer an opportunity to avoid paying any of your claim.
Reliance on the material misrepresentation
1. no reliance is required if there is a material misrepresentation by the policyholder or his agent to simply avoid the claim.
2. If the claim has already been paid, the insurer must show a judgment of conviction
A judgment of conviction is different than a conviction. Your son was convicted under Colorado law. I have placed below case law which supports that conclusion.
The statute of limitations bars your claims for bad faith and unreasonable delay unless a valid lawsuit is filed within 2 years of the date of denial. The statute of limitations bars your claims for breach of contract 3 years from the date of denial.
