Can Late Reporting Affect Your Insurance Claim?

In ideal circumstances, you would report any damaged property to your home insurance company right away. Natural disasters, like Florida hurricanes, and other destructive situations. Sometimes, you may wait to file your claim for fear of losing your insurance or not knowing if the damages will exceed the deductible, which might result in a delay or even a breach of contract.

While carriers try to deny delayed claims on the grounds of prejudice, several court cases have found that prejudice can be overcome.

Keenan Hopkins Schmidt & Stowell Contractors, Inc. V. Continental Casualty Co., 653 F. Supp. 2d 1255, 2009

In this 2009 federal case, the insured party made a claim 4 years after their initial loss. The insurer, Continental Casualty Company, noted that the insured breached their policy but proceeded to investigate anyways. After a 10-month process, Continental denied coverage. Because the insurance company completed an investigation before denying the claim, the court found that the late claim did not interfere with Continental’s decision, and thus dismissed any notion of prejudice.

De La Rosa V. Florida Peninsula Insurance Company

Filed in district court in 2018, this case involved water damage and questioned prejudice. When the insured submitted a claim 15 months after their loss, Florida Peninsula barred them from recovering under their policy, citing late reporting. The court found that while the insurer might be prejudiced in finding the cause of the damage, they were still able to evaluate the damage itself. Additionally, the insured may not have reported the claim right away, because water damage gets worse over time with mold and other complications.

Stark V. State Farm Insurance Company

In this 2012 case, the insured party reported damage from Hurricane Wilma over 3 years after the storm. The trial court sided with State Farm, who alleged State Farm was prejudiced, on appeal provided an alternate inspection of the property, and according to the engineer, the damage to the insured’s home was consistent with wind damage and could have only been caused by Hurricane Wilma. The appellate court reversed the trial court’s decision, deciding that State Farm was not prejudiced because they had an opportunity to investigate the facts.

Does Reporting A Claim Late Prejudice An Insurance Company?

If we rely on legal precedents, late reporting does not seem to interfere with an insurance company’s ability to investigate and award claims. Still, insured parties who have breached their contracts must be able to show that the insurance investigation was unaffected by the passage of time or that the policy does not give a specific deadline to report a claim.

We urge policyholders to inform their insurers of any damage as soon as they are able.

Any policyholder who has questions about the insurance process can seek guidance from our firm.

At Knoerr Law Group, we have over 45 years of experience handling property damage claims. We can help you file immediately after the damage is done or pursue and defend a claim according to your policy and legal precedent in insurance law.

If you need assistance, contact us today at (954) 749-3151.