Insurance policies, particularly property insurance policies, contain post-loss obligations (that serve as conditions precedent to payment). This essentially means that when an insured submits a claim to an insurer, an insurer can demand obligations from the insured, and the insured is required to comply with these obligations. These obligations could be requiring the insured to submit a sworn proof of loss, allowing the insurer to inspect the damaged property, submitting all applicable documentation to the insurer, and allowing the insurer to take an examination under oath of the insured. An examination under oath is simply a pre-suit deposition where the insured answers the insurer’s questions under oath about the insurance claim with a court reporter memorializing the questions and answers. While these post-loss obligations can pose an inconvenience to the insured, they are obligations under the policy (the insurance contract) and refusing to comply with these obligations will allow the insurer to easily argue that the insured forfeited insurance coverage. Thus, an insured could be in a position where they are denied coverage for failure to comply with post-loss obligations in an insurance policy when, had they complied, there would have been coverage and payment.
To briefly illustrate, recently, in Edwards v. State Farm Florida Insurance Company, 37 Fla. L. Weekly D1269a (Fla. 3d DCA 2011), a homeowner, through a public adjuster, submitted a claim to its property insurer for reimbursement for the costs to fix roof damage from a hurricane. The insurer made numerous efforts to obtain documentation of expenses that the homeowner incurred to fix the roof, but was never provided this documentation. The insurer also scheduled an examination under oath of the insured, which was cancelled prior to the scheduled date. The insured providing documentation to reflect the amount of the claim and submitting to an examination under oath were post-loss conditions in the insurance policy. Because the insured did not comply with these policy conditions, the Third District Court of Appeal held that the insured forfeited coverage: “Failure to comply with a condition precedent to payment relieves the insurer of its duty to make payment.” See Edwards.
Accordingly, an insured that submits a property insurance claim (or any insurance claim, for that matter) should ensure they are complying with post-loss policy conditions that are being requested by the insurer.
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