The defense of late messages has increasingly been used as a technical defense to exclude coverage for covered losses caused by covered hazards. While some states have issued bulletins (targeting these strategies, 1 the determination of coverage will often depend on whether a particular state requires an insurance company to show that the early notice caused prejudice in the investigation of Although it seems as that the denial of coverage due to an act that has no material effect on the insurer would further the purpose of having insurance, several states still apply a traditional warning rule that does not require the showing of prejudice. 2
Fortunately, Montana's not that an early notice should always allow an insurance company to escape coverage where the reason behind the notice has not been frustrated, ie whether a lack of prejudice could have forced a different outcome. The Supreme Court of Montana has made it clear that an insured should not lose insurance coverage solely on the basis of a technical or insignificant breach before writing an insurance on time that does not cause the insurer any prejudice. 3
Any breach of a notice of provision should not excuse the insurer from its obligation to reimburse an insured. Whether an investigation carried out immediately after an incident would have revealed something significantly different from that revealed by the delayed investigation depends on the specific circumstances of each claim. Such considerations may include whether the insurer has lost the opportunity to investigate or locate witnesses; if better conclusions could have been drawn without delay in the notification, if an insurance company could reach a coverage decision, or if the repairs to the affected areas that took place in the meantime would complicate an evaluation of the extent of the damage.
In Montana, prejudice is central to determining whether coverage will be provided when there is concern about notice being given as soon as possible. An insured person should be prepared to provide all available information that can help the insurer to fully investigate the damage, regardless of premature notification. The likelihood of the insurer trying to avoid payment for late termination in Montana is reduced by showing that the outcome of the insurer's investigation would not have been different if the notice of loss had been received in time.
2 See, The Importance of Quickly Announcing Loss . Legal insurance blog for property insurance. February 10, 2018.
3 Estate of Gleason v. Central United Life Ins. Co. 350 pp.3d 349, 356 (Mont. 2015); Atlantic Cas. Ins. Co. v. Greytak 350 p.3d 63, 67 (Mont. 2015).