If any contributor on this blog will tell you, the first step in any claim is to read the Policy. Policy language is ever evolving and changing, especially when it comes to notice requirements. The purpose of a notice requirement in an insurance policy is to enable the insurer to make a timely and thorough investigation. 1 Many policies, however, contain language which provides that notice is to be provided "as soon as practicable," "Promptly," "immediately" or "within a reasonable time."
In States where there is no automatic rebuttable presumption of prejudice in favor of the insurer, 2 or where the time limit is expressly defined, ie within one year of the date of loss, courts will typically assess five factors in determining the reasonableness of notice under an insurance policy. The factors are:
- The insured's sophistication in commerce and insurance matters;
- the insured's awareness of an event that may trigger insurance coverage;
- the insured's diligence in ascertaining whether policy coverage is available; and
- preachice to the insurer 3
While arising in the liability context, the moje case provides a good analysis of the factors a court will look at in determining the reasonableness of the notice provided.
The court reminds us in Moje that slight differences in policy language can have a big impact on when notice needs to be provided. Policy language requiring "immediate" are typically constructed strictly and interpreted as requiring notice to be provided "expeditiously." Language requiring notice "as soon as practicable" can often require more than one intensive review of the remaining four factors noted above. ] 4 Regardless of the specific language, the court does remind us that notice language is typically "mandatory." And does not allow the insured to pick and choose between reporting minor and major events. about 5
In assessing the insured's sophistication, the court will consider such insured's history with insurance claims, what the insured had been, whether the insured had any insurance. training, and / or whether the insured had read the policy.
The third factor is the insured's awareness of an event that may trigger insu rance coverage. Was the insured aware of the injury? In this context, a little more convoluted — for instance, hail damage. One of these factors was the insured's car was in the driveway at the time of the storm and became damaged, which might support that the insured should have been aware of an event which might trigger insurance coverage for his or her. her home.
Closely related is the fourth factor of the insured's diligence in ascertaining whether policy coverage was available. Again, courts will look at whether the insured had made similar claims before, or if they read and reviewed the policies it may provide coverage. [Last]courts will assess whether the insurer was prejudiced by the notice provided. It is important to note that Illinois law is a factor in decision whether reasonable notice was given. In the property insurance context, the court may look at such factors as whether the insurer was able to conduct an investigation, or if the condition of the property changed substantially from the date of loss.
prompt, ”“ reasonable, ”“ practical ”or the like, courts will typically consider all these factors in assessing the totality of the circumstances. In other words, no one factor trumps any other 6 Therefore, in a situation where there are questions about the promptness or the notice, one should undertake this same factor analysis to predict how a court may decide the issue
1 US Fidelity & Guarantee Co. v. Maren Engineering Corp. 82 Ill. App. 894 (1st Dist. 1980) See generally Tri-Etch, Inc. by Cincinnati Ins. Co. 909 NE2d 997 (Ind. 2009) (holding Indiana is one such state where prejudice is presumed)
3 Moje v. Federal Hockey League, LLC 2019 WL 1399966 (ND Ill. March 28, 2019)
4 Id. at * 6-7.
5 Id. at 6 citing State Auto Prop. and Cas. Ins. Co. v. Brumit Services 877 F.3d 355, 358 (7th Cir. 2017).
6 May 2019 WL 1399966 at * 6.