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Recent Case Looks at Homeowner’s Delay in Filling Out Insurance Paperwork


We’ve written in the past about what happens if a homeowner making a homeowner’s insurance claim doesn’t follow the time restrictions in the homeowner’s insurance policy. In many cases, failure to abide by deadlines, such as the deadline to make a claim, or allow an inspection, can lead to a claim being denied.

A recent case dealt with a homeowner’s failure to comply with an insurance policy. The result is a mixed bag for homeowners, with some good and bad news.

Homeowner May Not Have Complied with Insurance Company

The facts of the case were fairly straightforward. The homeowner had an insurance policy that allowed him to pay less money in premiums. In return, the insurance company could, at its option and in the event of a loss, hire its own contractor to fix any damage.

The homeowner experienced a water leak in the home. The first problem is that the homeowner didn’t initially tell the insurance company, but rather, hired his own contractor. Then the homeowner retained a public adjuster. The public adjuster, finally, and a bit over 30 days after the leak, made the claim with the insurance company.

The insurance company agreed to repair the damage with its own contractor. The homeowner just had to file a proof of loss (basic paperwork verifying the damage) within 60 days. However, the homeowner never did so. As a result, the insurance company declared the homeowner to be in breach of the agreement, and filed a lawsuit, alleging breach of contract, and asking the court to declare the homeowner in breach of contract.

Appellate Court Looks at Insurance Company’s Case

After the trial court dismissed the insurance company’s complaint, the insurance company appealed. The appellate court, in good news for the homeowner, agreed with the homeowner, finding that the insurance company could not allege a breach of the insurance contract because it had not shown that it had sustained any damages.

Even if the insurance company was “materially prejudiced,” these are not damages that can be awarded in a breach of contract case. There must be quantifiable damages or at least some way to measure damages, to sustain a breach of contract action.

However (in bad news for the homeowner) the appellate court did say that the insurance company could ask the court (in a declaratory judgment action) to invalidate the insurance contract on the basis of the homeowner’s delay in filling out the required paperwork.

The court found that there was a dispute between both parties, and that both were in doubt over whether, under the terms of the insurance contract, that the insurance policy could be invalidated based on the homeowner’s delay. There was also a question of whether the language of the policy actually ever required the homeowner to submit the paperwork requested by the insurance company.

The court did not rule on who was correct, but merely sent the case back down to the trial court, for determination of the parties’ rights under the contract.

Questions about whether damage to your home or to your property should be covered by your insurance policy? Contact the Miami property damage insurance attorneys at Velasquez & Associates P.A. today for help.



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