The answer is: Because you may not have fulfilled all of your post-loss obligations yet. Almost every policy contains it, a section called “Your Duties After Loss.” This portion of the policy sets out all of the things you are required to do after reporting a claim. They are called post-loss obligations and they are contractual obligations. Meaning, if you do not fulfill them, it may give your insurance company grounds to deny coverage for your claim. Think of it like a contract you enter into with a painter to paint your home. If he does not paint your home, you will be inclined to deny him payment because he breached the contract by failing to perform. The same analysis applies to your post-loss obligations. And we've seen insurance companies using them much more frequently as a “gotchya” to try to avoid their obligation to pay claims in full. That is why we work with clients to help make sure they have fulfilled all of their post-loss obligations to ensure they have coverage for their claim and to preserve their right to sue the insurance company to recover what they are owed on your claim. Think of it as playing defense on your claim. We help you take the steps necessary to ensure you have done what is required of you, first, under the policy so that you have the legal right to demand payment in full when the insurance company does not do what is required of them under the policy. If you file suit before fulfilling your post-loss obligations, the insurance company can claim you don't have the right to sue.
What Are My Post-Loss Obligations?
Your post-loss obligations are typically contained in a section of your insurance policy called “Your Duties After Loss” toward the end of your policy. This is why we always tell clients how important it is that they read and understand their policies as your policy contains not only the terms under which the insurance company must pay but also the things you must do to trigger the insurance company's duty to pay. Typical post-loss obligations include:
- Timely report the claim (e., give your insurance company prompt notice of the loss);
- Protect the property from further damage (e., place tarps on the roof to prevent further water intrusion that will cause further damage);
- Make reasonable and necessary repairs (e., if you can, repair or replace a window to prevent further rain intrusion);
- Keep an accurate record of repair expenses (e., keep receipts of tarps or repair supplies that you purchase, or copies of invoices that you pay);
- Prepare a list of damaged personal contents (e., a list of all of your interior items that were damaged—couch, cushions, dishes, TV, computer, bedding, etc.);
- Grant the insurance company access to inspect the property as reasonably requested;
- Provide the insurance company with records and documents requested (e., they may request records of prior repairs or upgrades to the home);
- Submit to an Examination Under Oath if requested (e., appear and attend on the date set by your insurance company or a mutually scheduled date and answer the insurance company's questions under oath); and
- Send to the insurance company if requested, within 60 days, a sworn proof of loss (e., this is generally required on the insurance company's specific form and states the amount you are claiming you are owed on your claim; it is mandatory that the sworn proof of loss be provided within 60 days after your insurance company requests it).
Any time you receive a request from your insurance company after you have reported a claim, be sure to fulfill that request promptly and to the best of your ability. If you are unable to fulfill a request because you may not have access to, or feel you cannot compile, the information your insurance company is requesting, let your insurance company know by providing plenty of details on the efforts you are undertaking, any obstacles you may be facing, and keep an active conversation going about your efforts to comply. Do not simply let requests—especially a request for a sworn proof of loss or examination under oath—go unanswered, unattended, or unfulfilled as this may result in a denial of your claim.
When Can I File Suit Against My Insurance Company?
Once we feel our clients have complied with all of the insurance company's requests to the best of their ability and the insurance company continues to unreasonably or wrongfully delay or deny full payment on claim, it is then time for us to go on the offense and file suit. We always remind clients, however, that it simply takes time for an insurance company to investigate, evaluate, and adjust a claim. If your insurance company has inspected the property and you haven't received their estimate in a few weeks, you can't run down to the courthouse and sue, at least not without facing fierce opposition from the insurance company, arguing you did not give them a reasonable amount of time to adjust the claim. That is an argument they would likely win, at that juncture, resulting in a dismissal of your lawsuit. Stay on them, for sure. Be the squeaky wheel. Continue to ask for updates as to status, ask for a copy of their estimate, ask if they need anything else from you. Keep an active conversation going with the desk adjuster to the best of your ability. But, you will need to give the insurance company time, likely 90-120 days at least, perhaps more depending on the complexity of your damages, to fully investigate and adjust the claim.
After that timeframe, in which we have ensured you responded to all requests and fulfilled all of your post-loss obligations, and the insurance company is still giving you the run-around and unreasonably delaying payment in full on your claim, then it's time for us to get the insurance company's attention by filing of a lawsuit. Recently, we have seen insurance companies responding to lawsuits we have filed with an allegation that the policyholder's failure to fulfill post-loss obligations supports their denial of the claim. In a recent opinion out of Florida's Third District Court of Appeal, the court confirmed that if an insurance company can prove you materially breached the contract by failing to fulfill a post-loss obligation, the burden will then shift to you in litigation to prove your breach did not prejudice the insurance company's investigation of your claim. See Nunez v. Universal Property and Casualty Insurance Company, 2021 WL 898179 (Fla. 3d DCA Mar. 10, 2021). That is a tough burden to bear and not a position you want to find yourself in, which is why it is so important that you work diligently to fulfill all requests from your insurance company and give them a reasonable amount of time to adjust your claim.
If you feel your insurance company is dragging their feet on your claim and they have begun asking you for records, documents, a sworn proof of loss, or perhaps an examination under oath, contact us for a free no-cost, no-obligation insurance claim review. We're here to help, and we know the games insurance companies often try to play, which have recently focused on an unfounded or incorrect allegation that you are not entitled to payment because you failed to fulfill your post-loss obligations. Don't give your insurance company the chance to play this card against you.