How can a policyholder report an injury that the policyholder is not aware of? Does any property insurance policy require the policyholder to inspect the insured property daily or routinely to look for evidence of a loss? Are any property insurance managers climbing on their own roofs looking for damage after a thunderstorm or hail storm?
Still, the insurer argues that executives will deny claims after a loss and that their insurer’s lawyers are arguing to judges that policyholders have a duty to report losses — even if they don’t know about the loss. How can a policyholder do that?
That was the situation in a case that was decided this week1 where a policyholder notified the carrier when the policyholder became aware of the damage. The building was rented and the policyholder did not know or discover the damage until the tenant vacated the structure.
Here is the court’s analysis:
Castro contends that the trial court erred in determining that notifying citizens more than two years after the loss could not constitute prompt notice as a matter of law. Castro argues that the relevant focus should have been on when Castro became aware of the loss and whether her actions were reasonable in light of that awareness. Castro argues that because she provided an affidavit explaining the delay in reporting the loss, and establishing that she reported it immediately upon discovering it, a genuine issue remains as to whether she fulfilled her duty under the policy to promptly report the loss.
It is undisputed that Castro did not announce the loss until nearly two and a half years after Hurricane Irma.
The court noted the relevant policy language:
In the event of loss of covered property, we have no obligation to provide coverage under this policy if failure to comply with the following obligations is to our detriment. These tasks must be performed either by you, an insured seeking coverage, or a representative of either:
1. Notify us or your insurance agent immediately.
The court then explained the law under Florida precedent on late notice:
[T]the word ‘prompt’, in terms of notice, ‘is synonymous with ‘immediately’, ‘immediately’ and ‘as soon as practicable’. In other words, in order to satisfy the duty to give prompt notice, such “notice should be given “with reasonable time and within a reasonable time having regard to all the facts and circumstances of the particular case.” The duty to give notice occurs “when it has occurred an event which should lead a reasonable and prudent man to believe that a claim for damages would arise” ” ….Whether the notice was given in a hasty manner is ordinarily a question for the fact finder… but “if the undisputed evidence will not support a finding that the insured has notified the insurer as soon as possible, then a finding that the notice has been given in due time is not support.”…
Our decision i Navarro— which also stems from a Hurricane Irma claim — is instructive. IN Navarrothe insured brought suit against Citizen for breach of contract, claiming that the home in which he lived was damaged by Hurricane Irma on September 10, 2017. Citizen denied the claim because, including, Navarro did not disclose the loss until May 5, 2020. The district court granted summary judgment in favor of Citizens, after ruling that the insured’s notice to the insurer was not prompt, giving rise to a presumption of prejudice that Navarro could not rebut. We affirmed and noted the insured’s own testimony in which Navarro admitted that he noticed leaks throughout his residence the day after Irma struck; he observed roof leaks in his house and attempted to make repairs about a month after the hurricane; he did even more roof repairs, including replacing roof tiles, the following year; but waited more than two and a half years to file the claim. Navarro admitted that “his only explanation for his failure to report the damage to the citizens was lack of fluency with the terms of the policy.” We affirmed the final summary judgment, holding that there was no genuine issue of fact as to whether Navarro acted “with reasonable promptness and within a reasonable time.” …
IN Lacquer…this court held that despite a nearly three-year delay in notifying citizens, “there are issues of fact[ed] as to when a reasonable and prudent person would believe that a potential tort claim may exist, precluding summary judgment. Specifically, the evidence showed that “damage to Laquer’s unit or the interior of the wall was not apparent until several years after Hurricane Wilma: no one, including Laquer, her tenant, her housekeeper, and the condominium manager and his agents who regularly visited Laquer’s unit, could observe any damage to the hardwood floor or the walls of the unit before [the notice date] or otherwise was notified to further inspect for damage.’…The Lacquer however, the court noted that the date the insured discovered the full extent of the loss was also not necessarily the trigger date.
Under this law, Florida courts appear to look for a prudential person standard as to when a policyholder would know that a potential tort claim might exist.
Based on that legal opinion, the Court of Appeals reversed the trial court and found for the policyholder, concluding as follows:
In this case, the damage to Castro’s property was allegedly caused in September 2017, but was not reported until February 2020. This lapse of time was explained by Castro, who stated that the property was occupied by a tenant during that time period, that the tenant never notified Castro of any damage , and that Castro herself was unaware of any damage to her property until the tenant moved out of the property in February 2020. Castro notified Citizens of the loss less than three weeks after learning of the loss. damage to her property. In light of the evidence submitted by Castro in opposition to the motion for summary judgment, and considering all the facts and circumstances of the particular case, a genuine issue of disputed fact remains as to whether Castro promptly notified the loss….
The jury will decide on that.
There is a difference between beauty and charm. A beautiful woman is one I notice. A charming woman is one who notices me.
— John Erskine
1 Castro v. Citizens Prop. ins. corp.No. 3D21-1847 (Fla. 3d DCA June 21, 2023).