A California policyholder who meets all insurance policies is required to pay damages. Understanding the terms and conditions will prevent an unnecessary rejection of claims and will often speed up the payment of claims. With yet another historic and tragic fire season occurring this year, let's review the usual insurance terms and conditions that usually arise during claims adjustment and the best way to manage and ensure policyholder compliance.
To begin with and in general, insurance policies usually presuppose the insurer's obligation to pay benefits when the insured complies with various provisions regarding the making of claims. In a standard policy for residential or commercial properties, these conditions are usually found in the policy section, which is often entitled "Terms". Not all conditions have a literal effect, and all that is required is essential compliance. Some conditions can even be excused if it does not affect an insurer's investigation.
A summary of relevant insurance terms is as follows:
Notice of loss -All first-party insurances require the insured to notify the insurer in good time of a claim. In California, if there is a delay in the notice but does not affect the insurer, an insurer can not deny a claim based solely on the delayed notice Lat v. Farmers New World Life Ins. Co. (201
Note that the "Rules for Settlement of Legal Claims" require that if an insurer is unable to accept or deny a claim in whole or in part within 40 days of receiving proof of a claim, it must provide the insured with a written notice of that the need for more time and must "specify any additional information that the insurer requires in order to make decisions and state any reasons for the insurer's inability to make decisions." It must continue to give such written notice every 30 days thereafter until it takes a decision or receives notification of legal action. 10 cal. Encode. Reg. §§ 2695.7 (b), 2695.7 (c) (1). Therefore send all claim amounts in writing. If the contract is not paid and the insured does not comply with these legal requirements in a timely manner, notify the insurer in writing. Do this every time there is no payment on time and explain why the claim has not been paid.
Co-operation in Investigation of Claims – This usually involves requesting documents, inspections of the insured property and the appearance of an investigation under oath ("EUO"). In the case of the EUO, this is an insurance condition that an insured must meet . If the insured refuses to submit to an EUO or to answer specific questions that the insurer deems to be material, the insurer may claim such refusal as a defense against payment of the claim. Robinson v. National Auto. & Cas. Ins. Co. (1955) 132 Cal.App.2d 709. An insurer does not have to show prejudice before denying insurance benefits to an insured who has violated an insurance provision requiring submission to an EUO. Compliance with the policy requirement for a survey under oath is a condition that precedes any payment of any claim, and the refusal to submit to such a survey loses all rights under the policy. Brizuela v. CalFarm Ins. Co. (2004) 116 Cal.App.4th 578. At an EUO, an insured person in California may be represented by an attorney who may object under the Evidence Code. However, a lawyer should be careful not to instruct the insured not to answer a question that could potentially lead to information about a claim. This can lead to rejection of claims.
Provisions that limit the insured's time to sue (contractual restrictions) -Most first-party policies contain provisions that limit the time a policyholder can sue after the loss. Most insurances limit the time for application to one or two years after the loss date. Although California allows a four-year limitation period for breach of insurance claims, policies that shorten the time to file a lawsuit apply. Prudential-LMI Commercial Ins. v. Supreme Court (1990) 51 Cal.3d 674, 684. A provision on costume restriction is not covered by the prejudice rule . The insurer does not have to prove prejudice as a result of the insured's delay in submitting an application in addition to the restrictions. Please note that the time for submitting the application is subject to a fee during an insurer's investigation, ie ”from the time the insured submits an early notice, in accordance with the provisions of the policy notice, to the time when the insurer formally denies the claim. in writing. " Id. at 678. If an insured has an insurance with a one-year limitation on a suit, had a loss on January 1, 2021 and announced the claim on January 2, 2021, however, the suit limitation period would begin to take effect. The moment the insured formally rejects the claim, the insured must bring an action within 364 days, ie one year less the day that passed from the time of the loss until the notice was given.
As for documenting inquiries and inspections If you find yourself in a situation where the insurer's document requests seem to apply to all documents under the sun, it may in some circumstances be justified not to follow them. to follow a document request, you must state in writing any document request that is excessive, why not the provision of the documents  will not affect the insurer's investigation and ask the insurer to explain why the documents are necessary for it to be able to fully adjust the claim, so that you can better evaluate the request.
If you have any questions about the terms of a wildfire claim or any other claim, do not hesitate to contact Merlin's attorneys in California.