Sworn Proof Of Loss

Almost all insurance policies require a “sworn proof of loss” be filed when making a claim.  The Dallas Division, Northern District of Texas, issued an opinion in October 2017, dealing with a situation where the sworn proof of loss was waived by the Court.  The opinion is styled, Alexander Vilaythong v. Allstate Insurance Company.

Vilaythong (Plaintiff) had a homeowners policy with Allstate.  Plaintiff suffered a hail storm damage and submitted a claim to Allstate, who estimated damage at $17,053.76.  Plaintiff hired an adjuster who estimated the damage at $40,905.22.

A lawsuit ensued and Allstate moved to have the case dismissed under Rule 12(b)(1) for lack of standing because Plaintiff did not satisfy a condition precedent for filing the lawsuit, because he had not filed a signed and sworn proof of loss at least ninety one days before suing Allstate.

Plaintiff admits he failed to provide the sworn proof of loss but argues he substantially complied with the requirement by providing Allstate with adjuster’s report, which allowed Allstate the opportunity to investigate the dispute.  Allstate contended the adjuster’s report is insufficient to satisfy the conditions of the policy because it failed to provide first-hand knowledge of the property condition.

The Northern District has recently concluded the insurer is not prejudiced by the insured’s failure to provide a sworn proof of loss because the insured filed a timely claim and submitted the estimate from the public adjuster.  The Court reasoned that the insured provided the insurer with “ample opportunity and time to inspect the alleged damage, determining the validity of the insured’s claims, and engage in settlement discussions.”

Here, Allstate has not shown prejudice because Plaintiff provided sufficient notice of the claim.  Plaintiff filed a claim with Allstate immediately following the storm.  Allstate then sent its own adjuster to inspect the damage.  Plaintiff also sent the public adjuster’s estimate of the damage to the insurance company which was acknowledged by Allstate.  This estimate provided Allstate with ample opportunity to investigate the claim and to prepare to defend against it before suit was filed.  Allstate had notice of the basis of the claim because the public adjuster’s estimate provided detailed descriptions and pictures that formed the basis of the estimate.  This was done several months before suit was filed, so Plaintiff’s failure to comply with the sworn proof of loss provision did not prejudice Allstate.

The Court denied Allstate’s motion under Rule 12b)(1).