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Positive Signs in the Enforcement of Late Notice Provisions

This year was off to a positive start in the realm of property insurance with a decision out of the Second Circuit upholding an at times embattled policy provision that is found in nearly every property insurance policy: the late notice provision. Courts’ varying enforcement of such provisions has hindered insurers from enforcing rights vital to protecting their ability to start investigating a loss as quickly as possible. The opinion in Minasian v. IDS Prop. Cas. Ins. Co., 676 F. App’x 29 (2d Cir. 2017) was thus welcome news for the insurance industry, with the appeals court enforcing the late notice provision in a series of property policies which required that the insured provide its carrier prompt notice of a loss.

Posted in Conditions, Coverage, Notice, Prejudice, Uncategorized

Virginia Federal Court Underscores Distinction Between a Loss and an Occurrence for Purposes of Notice Conditions

In Clarabelle Wheeler v. The Standard Fire Insurance Company, 2016 WL 1164651 (W.D. Va. Mar. 23, 2016), the insurer argued that the insured failed to give “prompt notice” of the loss as required by the policy’s notice condition because she waited six-months to report five large trees had fallen on her barn. In support of this argument, the insurer offered evidence that the insured’s delay in providing notice prejudiced it by depriving it of an opportunity to investigate the claim and mitigate the resulting damage to the barn. Summary judgment in favor of the insurer as to whether there is coverage for the insured’s claim under the policy would often be granted on these facts. But, the United States District

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Posted in Notice

Late Notice Held to Bar a $6,000,000 Hurricane Wilma Claim in Florida

In The Yacht Club on the Intracoastal Condo. Ass’n. v. Lexington Ins. Co., –  Fed.Appx. –, 2015 WL 106862, 2015 U.S. App. LEXIS 293 (11h Cir., Jan. 8, 2015), a unanimous panel of the Eleventh Circuit recently held that a Florida condominium association’s multi-million claim for extensive Hurricane Wilma damage was barred because the insured failed to give notice of loss for fully 55 months.  The policyholder’s arguments that it was initially unaware that the damage exceeded the deductible and that it had created an issue of fact with respect to whether the presumption of prejudice had been rebutted because both parties were ultimately able to put up expert evidence of causation were unavailing. The Yacht Club had 380 units

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Posted in Conditions, Hurricane, Hurricane Wilma, Investigation, Notice, Prejudice

Texas Court Lays Out a Useful Roadmap of the Defenses to a Hailstorm Claim

Hailstorm claims for damage to roofs often involve belated notification that an already old or damaged structure has been further compromised.  In a recent Texas case, the court provided a primer for carriers confronting such claims, addressing a trifecta of defenses available – lack of causation, late notice, and prejudice.  The case is Hamilton Properties v. American Insurance Company, 2014 WL 3055801, 2014 U.S. Dist. LEXIS 91882  (N.D.Tex., July 7, 2014). Plaintiff Hamilton Properties acquired the Dallas Plaza Hotel in 2006 and mothballed the structure in February of 2009.  The hotel was insured by American Insurance Company (AIC) from February through September of 2009.  In 2012, the policyholder notified AIC that it was making claim for roof and water damage

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Posted in Causation, Hailstorm, Notice, Prejudice

Failure to File a Proof of Loss is Fatal, and the Defense Does Not Require a Showing of Prejudice

On June 3, Connecticut’s intermediate level appellate court held that the failure of a policyholder to file a sworn statement in proof of loss was fatal to his claim.  Palkimas v. State Farm Fire & Casualty Co., 150 Conn.App. 655, 2014 Conn.App. LEXIS 244 (June 3, 2014) rejected the insured’s arguments that prejudice need be shown, holding that while the insurance company may well need to make a showing of prejudice in cases involving the belated submission of a proof, its burden to make such a showing never arises in cases in which the insured has never submitted such a document. Richard Palkimas was insured under a homeowner’s policy issued by State Farm Fire & Casualty Company, and he sustained

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Posted in Notice, Proof of Loss

Tenth Circuit Holds That Two-and-One-Half Years and Two-and-One-Half Million Dollars Do Not Constitute Prejudice

In BSC Holding, Inc. et al. v. Lexington Ins. Co., — Fed.Appx. –, 2014 WL 929194 (10th Cir., March 11, 2014), the Tenth Circuit recently underscored  how difficult it can be for an insurer to demonstrate prejudice as a result of late notice.  The District of Kansas had granted summary judgment to Lexington, but the Court of Appeals reversed and sent the matter back to the lower court, holding that “substantial prejudice” had not been shown despite the fact that the policyholder had waited two-and-one-half years to notify the carrier and had spent $2.5 million dollars before doing so. Lyons Salt Company owned a salt mine in Kansas.  In January 2008, mine workers detected an inflow of water into the

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Posted in Investigation, Notice, Water
About The Property Insurance Law Observer
For more than four decades, Cozen O’Connor has represented all types of property insurers in jurisdictions throughout the United States, and it is dedicated to keeping its clients abreast of developments that impact the insurance industry. The Property Insurance Law Observer will survey court decisions, enacted or proposed legislation, and regulatory activities from all 50 states. We will also include commentary on current issues and developing trends of interest to first-party insurers.
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