Q. What are post-loss duties?

An insured’s post-loss duties are set out in the insurance policy. Common post-loss duties include:

• Provide timely notice of loss
• Notify the police in case of loss by theft
• Protect the property from further damage
• Duty to make reasonable repairs to mitigate damage
• Keep an accurate record of repair expenses
• Prepare a detailed inventory of damaged property
• Duty to cooperate
• Show the damaged property
• Provide documents and records requested
• If requested, submit to an examination under oath
• Provide a sworn proof of loss

Q. What is timely notice?

Most policies state that the insured has a duty to give prompt notice of any loss to the insurer. Some policies may actually list out the exact time in which the notice must occur.

When an issue or whether notice was prompt or timely arises, courts must assess the cases individually and determine if the time between the loss and the notice was reasonable under all of the facts and circumstances.

Q. What if timely notice is not given?

Failure to give an insurer timely notice of a loss can provide the insurer with a potential basis for denying a valid claim. Ideal Mut. Ins. Co. v. Waldrep, 400 So. 2d 782 (Fla. 3d DCA 1981).

Florida requires that an insurer be prejudiced by the late notice in order to avoid coverage. There is a presumption that late notice has prejudiced the insurer and it is up to the policyholder to prove otherwise.

The main prejudice that an insured must overcome occurs when the late notice substantially affects the insurer’s ability to investigate a claim. For instance, if a policyholder does not notify the insurance company of damage to a roof, passing time may worsen the condition and the insurer can argue that any repairs deprived the insurer of an opportunity to fully investigate the cause of the loss.

Q. Who should be notified in a theft loss?

Most policies have specific conditions that apply to theft losses. The most common is the duty of a policyholder to notify the police, as well as the insurer, of the theft. Often, policyholders do not notice that some items are missing until long after a burglary or theft, and failing to notify the police could create issues with the insurance company covering the loss. Most insurers closely evaluate theft claims with an eye toward fraud. If notice is not given to the police, or is unreasonably late, the insurer will likely take a more skeptical view. This can cause substantial delays, even if coverage is ultimately not denied.

Also, notifying the police of a loss does not relieve the policyholder of the duty to report the loss to the insurer.

Q. What is the duty to make reasonable repairs?

The duty to make reasonable and necessary repairs to protect the insured property is also referred to as mitigating the loss. The provision is intended to keep the loss from unnecessarily increasing and thus increasing the cost to both the insured and the insurer.

In most cases, this means that temporary repairs must be made to ensure that the damages do not get worse. Tarping a damaged roof to keep rain water out or turning off the water supply to a broken pipe are both common temporary repairs which can be sufficient to mitigate the loss.

Failing to take appropriate measures to mitigate the loss could lead to an increase in the amount of damages and may substantially reduce coverage or even eliminate it in some instances.

Q. Who is responsible for paying the reasonable repairs to mitigate damage?

In many instances, there will be specific policy language which states that the insured will be entitled to reimbursement for any temporary repairs or other mitigation efforts which the insured incurs as a result of a covered loss. Similarly, most policies will state whether these expenses will be added against the policy limit or are considered additional coverages. It is important to read and understand the particular language of the policy in order to make this determination.

Also, for mitigation expenses to be reimbursed, the loss being mitigated usually must be covered under the policy. See Swire Pacific Holdings, Inc. v. Zurich Ins. Co., 139 F. Supp. 2d 1374 (S.D. Fla. 2001).

Talk to Corey
Would you like to talk to Corey about a post-loss issue? You can reach him in Merlin Law Group’s Tampa office at 813-229-1000 or via email at charris@merlinlawgroup.com.