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Is an insured limited to the amount in a rejected proof of loss? | Legal insurance blog for property insurance



In an insurance dispute, the question sometimes arises: Am I (the policyholder) limited to the amount submitted in my proof of loss, after it has been rejected by the carrier?

Although there is no abundance of case law, there are some older cases and secondary sources that support the idea that an insured may not be limited to the amount of damages in his proof of loss in the event of rejection by the carrier. In general, Couch on Insurance states:

[Proof of losses] is not decisive for the applicant and can be explained, varied or contradicted in the case of an honest mistake unless the proof of loss provided is accepted by one person by another, the insurer was thereby harmed, or the extent of evidence of loss has become the law of law due to a legal decision. 1

Although this provision does not really hit the mark exactly, it indicates that statements (and thus valuations) in evidence of loss are not entirely decisive, which means that in the event of an insurer's refusal, all bets should be excluded. table, and the insured should not be limited to the original estimated number within (absence of fraud or bad faith).

An article in American Law Reports discusses the admissibility and finality, against an insured, of statements and values ​​in a pr 2 Within this source several cases are investigated, as to whether a the insured is limited to the amount in his proof of loss, after it has been rejected by a carrier. One source in particular, the Griswold case, became one of the most important sources for this discussion.

I American Ins. Co. v.Griswold an insured filed evidence of loss on a claim for damages. The proof represented the settlement figure with three insurers and was rejected shortly thereafter. The court argued that the insured in his recovery against the insurer who declined the settlement was not limited to the figure stated in the proof of loss, even if the insured had agreed to the accuracy of this figure under misconception of its 3 [19659006] Outside of the New York case Griswold other jurisdictions have faced the subject and discussed the question of whether the policyholder is limited to the amount in the evidence of losses after rejection by the carrier.

KANSAS – I J. F. Laderer Clothing Co. against Northern Assur. Co. an insurance company rejected the amount required of the insurance's proof of loss under a fire policy, and the court held that the insured's recovery was not limited to the amount originally stated in the proof of loss. 4

TEXAS – I Penn Liberty Ins. Co. v. Tannery an insurer denied all liability for storm damage according to the insurance policy, where the rejected was the insured's proof of valuation of loss damage. The court held that the insured's recovery was not limited to the damage required in the proof of loss. 5

Both J.F. Laderer Clothing Co. and Tannery holdings seem to reinforce the older rule from the case Griswold . All three cases ( Griswold JF Laderer Clothing Co. and Tannery ) follow and maintain the idea that an insured is not limited to the amount of claims in their proof of loss, once it has been rejected by the carrier.

A final case relevant to the question is Van Tassel v. Greenwich Ins. Co. a fire policy dispute from New York. 6 After the insured received a renewal of a fire policy (in the form of a "binding slip"), the insurer sent a letter to the insured's broker stating that the insured's insurance policy for the amount reported in the extension application was denied, but that it would be borne for half of that amount. No reply was received to this message. 7

Of course, a large fire occurred shortly afterwards. In all the initial steps, including the submission of proof of loss, the insured's claim was stated to be no greater than the amount that the insurer stated it would be willing to accept, but it was considered that the "binding ticket" was still effective in maintaining it. old amount of policy. The Court held that despite the figure given in the proof of loss, the insured could recover for a larger amount up to the limits of the old policy . 8

While the Van Tassel case differs mainly from the other three previously discussed cases, it still claims that the insured was not limited to the figure given in their previous submitted evidence of loss.

So what does all this mean? Sometimes mistakes are made in the proof of loss when they were originally submitted. There may be inspections and estimates that come after the submission of proof of loss that show that the figures in the previously submitted proof of loss are either lower or higher. If a proof of loss is rejected and the insured later wants to present a new proof of loss with different figures, these cases support the argument that the insured should not be limited to the original figures in the proof of loss.
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1 § 186: 25 Evidence of Evidence, 13 Couch on Ins. § 186: 25.
2 58 A.L.R.2d 429 (Originally published 1958).
3 American Ins. Co. v Griswold 14 Wend 399 (N.Y. Sup 1835); 58 A.L.R.2d 429.
4 J. F. Laderer Clothing Co. against Northern Assur. Co. 116 Kan. 377, 226 pp. 712 (1924).
5 Penn Liberty Ins. Co. v Tannery 280 S.W.2d 295 (Tex. App. 1955).
6 Van Tassel vs. Greenwich Ins. Co. 151 NY 130, 45 N.E. 365, 367 (NY 1896).
7 Id.
8 Id.


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