Claims Denial – Timely Notice Of Claim

There are many reasons an insurance company use to deny a claim.  One of those reasons is a requirement in almost all insurance policies that an insured provide timely notice to the insurance company of a claim.  The primary reason the insurance company requires a quick, “timely” notice, is so that they can investigate the claim while it is new.

Here is a 2022, opinion form the Dallas Court of Appeals.  The opinion is styled, Richland Trace Owners Association v. Landmark American Insurance Company, Vericlaim, Inc. and Jason Roberts Keen.

The facts of this case are unique to the case.  However, the general discussion about a claim being submitted in a timely manner needs to be understood.

Richland Trace suffered hail damage form a storm in 2016 and then again in 2017.  A claim was not made until after the 2017 loss.  Landmark hired an adjusting company to investigate the 2017 damage and later invoked the appraisal provision in the insurance contract.

The appraisal came back stating the amount of the loss from the 2017 damages.

In a later lawsuit, Richland Trace alleged that the adjuster would have discovered the damages from the 2016 storm.

Landmark filed a motion for summary judgment arguing the appraisal award took care of all the damages in the case and even if the appraisal did not take care of the 2016 damages, that the claim which was not filed until after the 2017 storm was a claim made too late.

The Court looked at the language of the appraisal award and pointed out that the appraisal award only speaks of damages due to the 2017 storm, with no mention anywhere of any 2016 damages.

Interpreting the Appraisal Awards language according to its plain, ordinary, and generally accepted meaning, the Court concluded Landmark failed to conclusively prove the Appraisal Award accounts for any loss that Richland Trace’s property suffered as a result of the March 2016 hailstorm.  As a result, Landmark has not shown they are entitled to summary judgment on Richland Traces claims as alleged in its amended original petition.

In addressing the any damages caused by the 2016 storm and the subsequent 2017 filing of the claim the Court found that Landmark had the burden of proof on its defense that the notice of loss was untimely for the 2016 storm and Landmark failed to meet this burden.

An insureds failure to timely notify its insurer of a claim or suit does not defeat coverage if the insurer was not prejudiced by the delay.  An immaterial breach does not deprive the insurer of the benefit of the bargain and thus cannot relieve the insurer of the contractual coverage obligation.

The 2016 Policy contains a promptnotice provision.  The 2016 Policy requires
Richland Trace to provide prompt notice of the loss or damage, including a
description of the property involved, to Landmark and, “as soon as possible, give
Landmark a description of how, when and where the loss or damage occurred.
Although Landmark argues Richland Trace failed to give notice in a timely fashion, the record contains no evidence about when Richland Trace provided notice of the alleged loss or damage caused by the March 2016 storm.  Even if the Court assumes for purposes of this issue that the evidence shows Richland Trace did not timely give notice, there also is no evidence in the record that Landmark was prejudiced by any delay.

Thus, the Court ruled in favor of Richland Trace.

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