Proof of loss requirements are becoming a more frequent topic of conversation, and questions regarding proofs of loss are frequently asked of members in our law firm. Proofs of loss are conditions precedent to recovery under virtually all property insurance policies. Unless waived or not demanded under some forms, proofs of loss should be filed.
Over the past several years, we have noticed a growing trend of adjusters and legal counsel for insurers asking for multiple proofs of loss. Many of these requests are months and sometimes years following the loss. The insurance company attorneys probably are trying to protect their clients and avoid interest penalties for delayed claims payments under many state statutes.
The FC&S Bulletins discussed the issue of multiple proofs of loss demands in its August 5, 2010, Question and Answer. The question posed was the following:
Our insured was asked to submit a proof of loss. They did and the adjuster rejected it on the grounds that he disputed the values. Additional discussions and estimates followed increasing the value of the claim over that which was noted on the 1st proof of loss.
The adjuster has asked the insured to submit a second proof of loss. The claim has become adversarial and the adjuster has threatened the insured with an EUO. Having complied with the initial request for a proof, does the carrier have the right to ask for additional proofs? How often and under what circumstances are multiple proofs of loss permitted to be requested by the carrier?
The current Business Owners form clearly contemplates one proof of loss because it says the insured, at the request of the insurer, must send "a" proof of loss. The old standard fire insurance policy, at line 35, required "a statement" of various items to be included for proof of claim. I have not seen a policy that requires proofs of loss to be filed, but I bet insurance company attorneys will argue and threaten that failure to complete them is a breach of the cooperation clause.
The answer provided by the FC&S is sound regarding this issue:
The policy has no language regarding the number of proofs of loss a carrier may ask for; the duties after a loss simply state that within 60 days of the carrier’s request the insured submit a signed, sworn proof of loss which to the best of his ability states the nature of the loss, date, values, inventory of damaged property, etc. If the adjuster disputes the values, I don’t see what another proof of loss is going to do; he’s trying to artificially force the insured to adjust his claim. An appraisal would be proper in this situation, as either party has the ability to request one if the carrier and the insured fail to agree on the amount of the loss. (emphasis added)
As ususal, I strongly suggest that all adjusters and those involved with property insurance subscribe to the FC&S Bulletins. It is a fantastic resource.