Proof of Loss

"...it isn't worth the paper it's not written on."-- Sam Goldwyn
60-Day Proof of Loss Deadline

Anecdotal reports are that many hurricane victims on Pensacola Beach have not yet been contacted by an adjuster, or they've heard nothing further, or the adjuster is low-balling their loss claims. If you fit one of these categories, you might want to consider 'formalizing' your insurance claim by mailing, return receipt requested, a Proof of Loss to all of your storm-related casualty insurance companies.

As explained in a Q-and-A posted on the PNJ web site, the deadline for filing a formal Proof of Loss normally is 60 days from the date of the occurrence. In the case of Hurricane Ivan, that would be November 15:

Question: How much time do I have to submit my claim?

Answer: The answer depends upon your policy. Some policies provide that the proof of loss must be filed "as soon as practicable" or "within a reasonable time." Others provide that the proof of loss must be filed within a fixed period of time 30 or 60 days from the date of the loss. You should carefully review your policy to determine when the proof of loss must be filed and comply with its provisions. Flood claims under the National Flood Insurance Program and policies require that a proof of loss must be filed within 60 days from the date of the loss. THE ADJUSTER CANNOT WAIVE THIS REQUIREMENT FOR FILING A FLOOD PROOF OF LOSS WITHIN 60 DAYS!

Be sure to read your flood, windstorm, and homeowner's policies for any variation on the Proof of Loss requirement.

To be sure, Florida Citizens Windstorm does invite insureds to telephone their claims. But the language of many Florida Windstorm policies does not make an explicit exception for such an informal practice. However, the concept of 'waiver' may be a savior.

Waiver of Proof of Loss

Some beach residents have had personal conversations with their adjuster, received a copy of the 15-day "preliminary report" from him, or even have received an advance payment on their claim. (Be aware, however, that advance claims most often are made only on the personal property portion of the claim, which the adjuster may have attributed, rightly or wrngly, to one policy and not another whch you think also provides coverage.)

In such cases, the insurance company (or companies) represented by the adjuster arguably has "waived" its right to a timely sworn Proof of Loss statement, as explained in a web article by certified insurance underwriter Rick Hammond. Although he was writing from Chicago about casualty claims in general, much of what Hammond says has relevance to Florida hurricane vicitims as well:

Typically, an insured is required to submit a proof of loss in order for the insurance company to determine the extent, if any, of their liability for the claim. Zak v. Fidelity-Phoenix Ins. Co., 34 Ill. 2d 438, 216 N.E.2d 113 (1966).

In that regard, the terms of most property policies provide, inter alia, that in the event of loss, the insured must see that the following duties are performed:

a. prepare an inventory of damaged or stolen personal property. Show in detail the quantity, description, actual cash value and amount of loss. Attach to the inventory all bills, receipts and related documents that substantiate the figures in the inventory;

b. submit to [the insurer], within 60 days after the loss, a signed, sworn proof of loss which sets forth, to the best of your knowledge and belief:
(a) specifications of any damaged building and detailed estimates for repair of the damage;

(b) an inventory of damaged or stolen personal property

It is important to note that if the insurer, before demanding a proof of loss, is fully aware of facts which allows for a coverage defense and does not then insist on noncoverage but recognizes the continued validity of the policy by requiring the insured to go to the trouble and expense, if any, of preparing proofs of loss and related matter, an implied intention to waive the respective policy defense may follow. Kenilworth Ins. Co. v. McDougal, 20 Ill. App. 3d 615, 313 N.E.2d 673 (2nd Dist. 1974).

However, one court has held that, in order to establish that an insurer has waived its right to demand a proof of loss, the alleged conduct amounting to the waiver must have occurred during the time fixed by the policy for filing the proof of loss, or prior to the time of the insured's forfeiture for failure to comply with that policy condition. Conley v. Fidelity-Phoenix Fire Ins. Co. of New York, 102 F.Supp. 474 (D. Ark. 1952).

It should also be noted that at least one other court has concluded that an insured cannot be charged with "waiving a waiver" after one has occurred. For example, in Warshawky v. Anchor Mut. Fire Ins. Co., 98 Iowa 221, 67 N.W. 237 (1896), the court held that an insured may charge an insurer with waiver of its right to demand a proof of loss, notwithstanding the fact that the insured later submitted the proof out of caution.

Time Limitation for Filing and Rejecting Proofs.

As noted previously, most property polices state that the insured must submit a sworn statement in proof of loss within 60 days after the loss. An insurer's own failure to furnish proof of loss forms in a timely manner to its insured after receiving written notice of the loss could constitute a waiver of the strict compliance with that requirement. Canal Ins. Co. v. Savannah Bank & Trust Co., 181 Ga. App. 520, 352 S.E.2d 835 (Ga. Ct. App. 1987). However, at least one court has held that, in the absence of a contractual or statutory duty of an insurer to furnish to its insureds blank copies of the proof of loss, a failure to do so has been held not to constitute a waiver. Standard Life & Acc. Ins. Co. v. Strong, 13 Ind. App. 315, 41 N.E. 604 (1895).

In Dellar v. Frankenmuth Mut. Ins. Co., 173 Mich. App. 138, 433 N.W.2d 380 (Mich. Ct. App. 1988), the court held that the insured did not receive a copy of the policy from the insurer, despite repeated requests, until after expiration of the sixty-day period for the filing of the proof of loss. Moreover, the insured claims that she never received a blank proof of loss during the period before commencement of legal action. Id.

The court held that the failure of the insurer to provide such documents until after the expiration of the sixty-day period prevented the insured's compliance. The court also concluded that because there had been a full investigation, a pending criminal charge, and an examination under oath of the insured, a sworn proof of loss would add nothing and that its functional equivalent was already provided. Id.

It is interesting to note that the court in Dellar stated in dicta that--

[i]t would be better policy that, in order for an insurance company to argue in favor of a forfeiture of benefits based exclusively on the failure to file a sworn proof of loss within sixty days, the company be required to give notice of such potential forfeiture and either its own form for proof of loss or a specification in writing of what constitutes a satisfactory proof of loss.

A reasonable consequence of a waiver of the time limitation for filing a proof of loss is a finding by at least one court that states that an insurance company, upon rejecting a proof of loss and arranges with the insured for the filing of a new proof of loss, is obligated to notify the insured of its rejection in ample time to allow the insured to comply with the policy provision which sets a time limit for filing suit. Downing, 62 Ill. App. 2d at 308, 210 N.E.2d at 606.

However, an insurer does not waive the provisions regarding the time limitation for the submission of a proof of loss where it has no knowledge of the facts of the claim. Thus, an insurer is entitled to know that a demand is being made upon it under a policy issued by it, before its acts may be treated as a waiver. Nelson v. Travelers Ins., 113 Vt. 86, 30 A.2d 75 (1943).

Thus, even if it is not necessary, strickly speaking, to file a Proof of Loss by November 15 with any insurance company represented by an adjuster you have been successfully meeting or corresponding with, it still may be prudent to document your claim and leave no room for doubt the company has actual notice of it.

As Sam Goldwyn once said, famously, of a verbal contract, "it isn't worth the paper it's not written on." A Proof of Loss may be required for any other insurance companies you believe are contractually obligated to cover any portion of your losses, especially if they haven't yet acknowledged receiving your claim or had an adjuster investigate your premises.

Adjusters do screw up. They forget, mis-file things, get fired, slip into insanity, or even get sick and die. Sometimes, especially like now when so many damaged Florida properties are being assessed by 'newbie' adjusters just out of training, they can get confused or forget you altogether.

Eventually, too, a signed and notarized Proof of Loss almost certainly will be needed from every insured person who disputes the adjuster's analysis or the insurance company's compensation offer. So, create your own paper trail just in case the insurance company or adjuster has fouled up already!

The Proof of Loss Form

The actual proof of loss is not complicated. Your adjuster should have provided you with a form like this one in pdf format from Florida Citizens Property Insurance Co. But he probably didn't. Even so, you also can make your own very simply by writing a letter that states:

* Your name, address, and phone
* Address of the "loss location"
* Description of the structure (single family home, condo, etc.)
* Name of homeowner insurance company
* Name of flood insurance carrier
* Name of windstorm insurance carrier
* Name of any other casualty insurance company possibly liable to you for the property due to the same event
* Description of property damaged or lost
* Probable amount of the loss to you or your claim (or "policy limits" where applicable)

Sign the letter in front of a Notary Public, keep a copy for your records, and send the Notice of Claim off in such a way as to have written verification when it was received.