Caselaw Wednesdays – Materiality and Compliance With Post Loss Obligations

You have a claim on your home or business. You report the claim and expect your insurance company to pay it within a reasonable time frame. Is that a reasonable expectation? As with many legal questions, it depends tends to be the right answer more often than not. We continue to see more and more insurance companies use any failure to comply with post loss obligations after a loss as a way to deny a claim. A recent case out of the Fifth District Court of Appeals in Florida highlights this recent trend. In Universal Prop. & Cas. Ins. Co. v. Motie, the insured suffered a loss as a result of a storm. The insurance company denied the claim which ultimately proceeded to trial. At trial, the insurance company claimed that the insured could not recover because they had (1) failed to promptly report the loss; (2) failed to protect the property from further damage; and (3) failed to provide the insurance company with the requested records and documents that the insurance company requested.

After the close of evidence, the insurance company and the insured both moved for a directed verdict. The insurance company argued that the failure to comply with the three things above was a material breach of the policy and therefore the insured could not recover. The insured argued that the breach of those conditions was immaterial and therefore coverage should be extended. The appellate court ultimately ruled that whether a breach of the conditions was material or not was a question of fact for the jury to decide and returned the case to the trial court for further proceedings.

This case further cements the ruling from American Integrity v. Estrada wherein that court determined that the insurance company bears the initial burden of proof to show that a breach of a policy condition is material. We’ve previously discussed this in the context of an examination under oath here.

As insurance claims turn into more of an adversarial proceeding, it is important to have an advocate in your corner to assist in the presentation of a claim from the start. Have you had a claim where the insurance company is asking you to comply with a bunch of convoluted policy conditions? If so, contact an attorney from Alvarez Law Group to assist.

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