Don't Wait Until all the Damages Are Known

Don't Wait Until All the Damages Are Known Before Notifying Your Insurer.

It May Be Too Late!

By: Ian T. Kravitz, Esquire

As we have written before (read here), providing timely notice of an insurance claim can often be the difference between securing coverage, or facing financial catastrophe. In the case of 1500 Coral Towers Condominium Association, Inc. v. Citizens Property Insurance Corporation, Florida Courts have again weighed in on the topic. In that case, the condominium suffered what appeared to be minor roof damage as a result of land-falling Hurricane Wilma in October of 2005. The Condominium Association took it upon themselves to make those relatively minor roofing repairs in December of 2005. That they hoped would be the end of the story. Unfortunately that was not the case.

After the roof continued to leak, the Condominium Association proceeded to obtain estimates to fully repair the damaged roof. After receiving estimates in excess of a quarter of a million dollars to repair the roof, the Condominium Association first notified its insurer in June of 2010 of the extent of the damages. The insurer demand a sworn proof of loss pursuant to the insurance policy, but did not otherwise take any action. In October 2010, the Condominium Association filed a lawsuit against its insurer, and three months later, supplied a sworn proof of loss for the first time.

The insurer defended the suit arguing that the Condominium Association failed to give timely notice of the claim, failed to provide a sworn proof of loss within sixty days, and failed to initiate suit within five years of the actual date of loss. The Condominium Association argued in return that they notified the insurer within a reasonable time after the extent of the damages to the roof was known, and that even if the notice was untimely, the insurer suffered no prejudice as a result. The trial court entered summary judgment in favor of the insurer, holding that the notice was in fact untimely and that the insurer was prejudiced by the extensive delay in providing such notice. An appeal ensued.

The appellate court agreed that the notice provided was untimely pursuant to the policy. The appellate court reasoned that the insured cannot wait until all damages are known before notifying its insurer. Rather, the insured is required to notify the insurer within a reasonable time of the occurrence giving rise to the loss. This would provide the insurer with the ability to inspect the property for itself to determine the extent of any covered loss. Since the Condominium Association was aware of the loss in November of 2005, even though the extent of the loss may not have been known, the insured was untimely in providing notice to the insurer for the first time in June 2010.

The appellate court however reversed the trial court's finding that the insurer was in fact prejudiced by such untimely notice. The appellate court explained that in order to determine whether the delay in investigation the claims made were prejudicial to the insurer was a question of fact for the jury. Not a question of law for the court. The appellate court explained that "[w]hether the prompt investigation would have enabled [the insurer] to determine the cause of the damage with greater certainty, to take steps to mitigate the damage, or whether it was placed in a substantial disadvantage to be prejudiced by the delay, present genuine questions of material fact that cannot be resolved on a motion for summary judgment." As a result, the judgment of the trial court was reversed for a trial to determine such material questions of fact.

While the Condominium Association in this case was successful on appeal, there are of course no guarantees that the Condominium Association will prevail on the facts of this case. The bottom line remains that in order to protect yourself from losing coverage where coverage might otherwise exist, care should be taken to notify your insurer as soon as any damage is noted to result from a potentially covered occurrence, and to not wait until all the facts and extent of such damage is known. At that time, it could well be too late.