Each insurance policy describes certain tasks that the policyholder must perform after a loss. However, the provision of prompt notification seems to be gaining traction among opportunistic insurance companies and their defenders who try to use this as a technical measure to avoid liability for an otherwise covered loss. 19659003] Tasks in case of loss or damage
You must see that the following is done in case of loss or damage to covered property:
b. Inform us about physical loss or physical injury. Include a description of the property involved.
The purpose of this clause is to allow insurers to investigate potential claims while memories are new and physical evidence is available. Whether the notice is "fast" depends on the specific facts and circumstances surrounding the report to an insurance company after an insured person has been informed of the loss. Where termination is determined late or not "promptly", New Mexico requires an insurance company to show that it has significantly damaged as a result of the late notice to avoid liability under the event of loss or Damage of the insurance. 1 The motive is that if an insurer is not required to show significant prejudice through an insurance breach, it would impair the insured's reasonable expectation that coverage will not be denied arbitrarily. 2 ]
Whether an insurance company was materially harmed by a premature reporting of a claim will be factual and claim specific. An insured person should be prepared to provide all available information that would necessarily help the insurer to fully investigate the damage, regardless of whether it occurs prematurely. Doing so will reduce the likelihood that an insurance company will try to avoid paying for a covered loss under the insurance through an unjustified technique.
Although New Mexico's significant prejudice rule provides decisive protection for policyholders, it is important to understand the difference between late reporting of a claim and the timing of a lawsuit or legal action against us within an insurance policy in New Mexico. Although an insurance company must exhibit significant prejudice in order to avoid late termination coverage, strict regulations apply in New Mexico. 3
1 Foundation Reserve Ins. Co. v. Esquibel 607 P.2d 1150, 1152 (N.M. 1980).
2 Roberts Oil Co. v. Transamerica Ins. Co. 833 P.2d 222, 228–29 (NM 1992).
3 See my previous post, New Mexico allows insurance to reduce statutory period to bring an action .