( Note: This guest blog is by Kathryn Ray, a summer warehouse office at our Tampa office)
When he receives property or damages claims and after filing an application with an insurance company, The insurance company can then request proof of loss. A proof of loss is defined as "a policyholder's statement of how much money is requested, signed and answered by the policyholder with documentation to support the amount requested." 1 In New York, if an insurance company gives the insured a written notice, after a loss, and requests proof of loss, the insured shall then have 60 days after receiving that notice to comply with the insurance company's request. 2 This compliance period for providing insurance companies with proof of loss may also be longer than 60 days if the insurer specifies this in its written notice. 3
As someone whose family suffered loss and damage during Hurricane Katrina, I have seen how difficult it is to deal with the aftermath of a disaster, apart from trying to get everything documented and transformed into the insurance company. There is a lot to ask of a policyholder right after a catastrophic event. Given this relatively short period of time to compile so much information after a disaster, what happens if a mistake is made on a proof of loss? Can an insurance company deny coverage by alleging fraud if you make an innocent mistake on a proof of loss?
In New York, if a mistake is made on a proof of loss, the important question to ask is: was it intentional? "[I] ntent is the most important element to be assessed to determine whether [an insured] intentionally misrepresented [his] statements." 4 Errors and omissions that are not intentional are not sufficient to be considered fraud. 5 Even if it is a misrepresentation in the induction, where even an innocent mistake can invalidate an insurance contract, when there is an attempt to deny coverage based on an allegation of fraud in a proof of loss , a display of intentional and intentional misrepresentation is necessary. 6 The New York Act has found that in order to invalidate an insurance contract due to fraud, it is the insurer's burden to prove with evidence that is clear and convincing that the insured 'intentionally made a false and material statement during oath with intent to defraud the insurer. ” 7
Not only must there be an intention for the insurance company to deny coverage by alleging fraud, but intentional misrepresentation or omission must be material. "[T] his materiality requirements are met if the erroneous statement relates to a subject that is relevant and relevant to the insurer's investigation, as it then proceeded." 8 "[Q] notifications of ownership, liens and barriers and changes in interest in property are material as a matter of law." 9 Furthermore, an assessment of materiality is generally a determination of fact for a jury to decide and final statements from insurance employees are not enough to create materiality as a matter of law. loss, the insurance company must provide one within the compliance period, which in New York is 60 days after receiving the notice of their request or longer if the insurer specifies it in their notice.It is also important to be aware that if a mistake is made on the proof of loss to the insurance company, this does not automatically mean that the insurance company can deny your coverage by claiming fraud. The summary is – in New York if there is an innocent mistake or omission made on a proof of loss, not a material statement or omission made with the intent to misrepresent or fraud, the insurance company cannot claim fraud on the proof of loss
For more information on insurance companies that use an insured mistake on customs after loss as a reason for cancellation or confiscation of benefits for technology, see Chip Merlin's post earlier this week and yesterday's Tuesday at 2 With Chip Merlin .
1 FEMA, Proof of Loss, https://www.fema.gov/media-library/assets/documents/9343 (last visited 22 July, 2018).
2 NY CLS Ins. § 3407 (a).
4 D’Andrea, v. Encompass Ins. Co. of Am. 2018 U.S. Dist. LEXIS 146446 * 8 (WDNY 28 August 2018) (with reference to F old-Pak Corp v. Liberty Mut. Fire Ins. Co. 784 F. Supp. 49, 59 (WDNY 1992)).
5 I d (quotes Magic v. Preferred Mut. Ins. Co. 91 AD3d 1232, 1233-34, 937 NYS2d 452 [3d Dep’t 2012] ("Incorrect information does not correspond necessarily fraud or materially misrepresentation, as the insured must provide "evidence of intent to defraud – a necessary element of defense." "(Citing Deitsch Textiles, Inc. v New York Property Ins. Underwriting Ass & # 39; n 479 NYS2d 487, 62 NY2d 999, 468 NE2d 669 (NY 1984)).
6 East 115th St. Realty Corp. v. Focus & Struga Bldg. Devs. LLC 910 NYS2d 404,. 404, 2010 NY Slip OP 50572 (U) (NY Sup. Ct. March 9, 2010) (citing Chang v. General Adv. Acc. Ins. Co. of Am. 193 AD2d 521, 521, 598 NYS2d 178 [NY App. Div., 1st Dept. 1993] (requires presentation of intentional and intentional misrepresentation in evidence of loss); Deitsch Textiles Inc. v New York Prop. Ins. Underwriting Assoc. 62 NY2d 999, 1001, 468 N.E.2d 669, 479 N.Y.S.2d 487  (finding fraudulent evidence of loss required caution of incorrect presentation); Geer mot Union Mut. Life Ins., Co. 273 N.Y. 261, 271, 7 N.E.2d 125 (1937); In re-liquidation of Union Indem. Inc. Co. of New York 89 NY2d 94, 107 (1996)).
7 D’Andrea 2018 U.S. Dist. LEXIS 146446 at * 7 (WDNY August 28, 2018) (Referring to State Island Supply Co., Inc. v. Lumbermens Mut. Cas. Co. No. 02-CV-6390, 2005 U.S. Dist. LEXIS 4921 , 2005 WL 711678, at * 5 (EDNY March 29, 2005); Fold-Pak Corp 784 F. Supp. At 57 (recognizes clear and convincing standard of proof).  8  Id. at * 7-8. (Citing Fine v. Bellefonte Underwriters Ins. Co. 725 F.2d 179, 183 [2d Cir. 1984]).
9 Id. at * 8 (citing Carlin v. Crum & Forster Ins. Co. 191 AD2d 373, 373, 595 NYS2d 420 [1st Dep’t 1993]).
10 Walker v. Tighe 142 AD3d 549, 551 (NY App. Div. 2d Dep. August 10, 2016) (citing Parmar v. Hermitage Ins. Co. 21 AD3d 538, 540-541, 800 NYS2d 726 ; Christophersen v. Allstate Ins. Co., 34 AD3d 515, 824 NYS2d 171 [N.Y. App. 2006]).