Every first-party property insurance contract provides the insured with an obligation to provide notice of the claim. Some require "prompt" notice and others require reasonable notice. Under Florida law, if an insured fails to give reasonable notice of his or her claim, then the insured must overcome a presumption of prejudice. Whether a carrier has been prejudiced by untimely notice is typically for a jury to determine based on the facts of the claim.1 For example, hurricane damage is often noticed for the first time months or even years after the storm. In sinkhole claims, many policyholders do not fully understand that they have coverage for sinkhole activity, not simply a catastrophic event. Upon learning that certain damages to their property may be related to sinkhole activity, they notify their carrier and request a full investigation.
A jury considers whether the delay in reporting the claim was reasonable and whether the carrier was prejudiced by the delay. An important question to consider is whether an engineer can attribute the damage to the event. For example, if only hurricane strength winds could have caused the damage and there has not been another hurricane or wind event in the area since the reported date of loss, then it is pretty easy to connect the dots. Many cases raise more complicated issues.
As such, litigation over cases revolving around whether notice was timely has increased, specifically related to Hurricane Wilma. As a result, the legislature attempted to clarify the issue and passed legislation that provides finality to a potential hurricane claim.
Florida Statute 627.70132, titled "Notice of windstorm or hurricane claim," provides:
A claim, supplemental claim, or reopened claim under an insurance policy that provides property insurance, as defined in s. 624.604, for loss or damage caused by the peril of windstorm or hurricane is barred unless notice of the claim, supplemental claim, or reopened claim was given to the insurer in accordance with the terms of the policy within 3 years after the hurricane first made landfall or the windstorm caused the covered damage. For purposes of this section, the term “supplemental claim” or “reopened claim” means any additional claim for recovery from the insurer for losses from the same hurricane or windstorm which the insurer has previously adjusted pursuant to the initial claim. This section does not affect any applicable limitation on civil actions provided in s. 95.11 for claims, supplemental claims, or reopened claims timely filed under this section.This statute has a great impact on Florida's policyholders. An insured must report the claim within three years of the date the storm makes landfall or causes damage to property. Why is this significant? I think it highlights the importance of Florida's public adjusters and attorneys that represent and advocate for policyholders. An insured must get it right, the first time. Often, presenting a claim to a carrier requires line item estimates and engineering reports to ensure that all of the benefits under the insurance contract are being honored and to help recognize certain damages that may not manifest themselves to the naked eye until years later.
These "supplemental" or "reopened" claims as they are referred to, are often the result of a failure of an insured to properly present the claim and/or the carriers failing to fully investigate the reported claim. Either way, it impacts every policyholder and substantiates the need for the retention of an insurance professional that will fully inspect the property damage and properly present the claim.
1 Leben v. State Farm Fla. Ins. Co., 93 So. 3d 528 (Fla. 4th DCA 2012).