How Much Time Does a Policyholder Have to File the Proof of Loss?

Read the insurance policy to determine how much time is allowed to file a proof of loss. It varies from policy to policy. Some policies provide a specific date after the loss. Some policies provide a specific date after a proof of loss is demanded by the insurer. One final caveat to this rule is that some states have rules and regulations regarding proofs of loss. These often state when the insurer must provide forms and when they must be demanded by the insurer. But the first place to find a time to file the proof of loss is within the policy.

The post, “What Happens If a Proof of Loss Is Filed Late? Can The Policyholder Collect?” had a comment that is not correct:

It should be noted that a POL in claims other than flood, is a requested document from the insurance carrier. If the insurer does not request one then the insured is not required to provide one. The policy time restraint of 30 days is from the time the insured receives the written request to provide the carrier with the POL.

I corrected the commentator, noting:

There is one important note–many policies have a time limit to file a proof of loss and there is no requirement that the insurer demand it.

For example, the Illinois Standard Fire Insurance policy says this:

‘and within sixty days after the loss, unless such time is extended in writing by this Company, the insured shall render to this Company a proof of loss, signed and sworn to by the insured’

I know that you primarily practice in Florida, where one case allowed a policyholder to file a time required proof of loss almost five years after the loss, but many states are not that way.

A good discussion of proofs of loss and how they function differently than notices of loss is from the Supreme Court Of Rhode Island. ¹ The court noted:

Although both notice and proof-of-loss provisions serve a broad common purpose of informing an insurer of the loss for which a claim is made, the two are distinct…. The sole purpose of a notice-of-loss provision is to afford the insurer a Seasonable opportunity for investigation to protect its interests…. The purpose of a proof of loss, on the other hand, is to afford the insurer an Adequate opportunity to protect its interests by facilitating its investigation….

…Pickering required that an automobile insurer show prejudice resulting from an untimely notice of loss. Such prejudice would result from an insurer’s inability to conduct any investigation until the time that notice of loss is provided. Without notice of loss, an insurer can conduct no investigation at all. In contrast, an insured’s untimely compliance with a proof-of-loss provision may adversely affect the adequacy, but not the existence, of an insurer’s opportunity to investigate a claim. The Supreme Court of Wisconsin has noted, ‘There is no great hurry there (to furnish a proof of loss), such as there is when loss occurs and the insurer must be notified so that it may proceed * * *.’ Britz v. American Insurance Co. of Newark, N. J., 2 Wis.2d 192, 202, 86 N.W.2d 18, 23 (1957). We therefore conclude that logic and reason impel a showing of prejudice, even more forcefully, before a declaration of forfeiture may be based upon an insured’s untimely compliance with a proof-of-loss provision.

The Supreme Court of Rhode Island did not follow the rule requiring forfeiture of all policy benefits by a late filed proof of loss, although noting that some states do:

When construing a standard-form fire insurance policy, we are guided by the construction of such policies which other jurisdictions have adopted…. Courts construing provisions substantially identical to those here in issue, however, have perceived different meanings. Some courts have construed the language so that, in effect, an insured’s late filing of a proof of loss results in forfeiture of the claim…. Other courts, instead of discerning an intent to create a forfeiture, have held that an insured’s failure to submit a timely proof of loss, in effect, merely postpones the maturity of the claim….

We adhere to the rule that where the law prescribes a forfeiture by a clear and explicit directive, the court cannot say there shall be none. Housing Authority of Newport v. Massey, 114 R.I. 492, 496, 335 A.2d 914, 916 (1975)… After reviewing the standard-form fire insurance policy, we find no clear and explicit legislative declaration that an insured’s failure to submit a timely proof-of-loss statement results in a forfeiture of an insured’s right to recover…

The defendants have argued that the proof-of-loss provision, read in conjunction with the clause regarding maintenance of suit, works such a forfeiture. We disagree; we do not read these provisions as an explicit and clear mandate of forfeiture….Nor is there anything in the provisions governing suit that clearly indicates a legislative intention that a claim be forfeited if proofs of loss are not filed within sixty days after the fire….The provision then at issue in the standard-form fire insurance policy requiring that suit be brought within one year of the loss was clear and explicit. For these reasons we do not find that our Legislature has mandated a forfeiture when an insured has not strictly complied with the sixty-day proof-of-loss provision.

The law regarding proof of loss and compliance varies from state to state. Use the search function in this blog to help your research regarding state requirements. I found nearly 150 different posts regarding proofs of loss when doing a quick search for “proof of loss requirements.” Shaun Marker made an excellent five-part series on Proof Of Loss Requirements In New York State. He made the following important comment:

Those who handle first-party property insurance claims everyday understand the importance of the proof of loss. Imagine attempting to handle your own first-party property insurance claim and not realizing what potential pitfalls there can be in the claims process. One of these potential pitfalls is timely submitting a proof of loss according to the policy and state law. A proof of loss is a standardized form on which the insured gives information about a claim and the property insured. The general purpose of proof requirements is ‘to afford the insurer an adequate opportunity for investigation, to prevent fraud and imposition upon it, and to enable it to form an intelligent estimate of its rights and liabilities before it is obligated to pay.’

…

The proof of loss is a very important document in the property insurance claim process. It is very important to submit the proof of loss timely to the insurer to avoid jeopardizing the ability to recover benefits. While the New York statute and case law regarding proofs of loss allow policyholders to furnish proofs by mailing them on the sixtieth day following the insurer’s request, it is obviously better to submit it much earlier, if possible.

After the loss, policyholders, public adjusters, and involved restoration contractors should read the entire policy. A significant part of the policy is the Duties After Loss section. The proof of loss requirements and the time for filing a proof of loss are usually found within the Duties After Loss section.

Thought For The Day

It’s the little details that are vital. Little things make big things happen.

¹ Siravo v. Great American Ins. Co., 122 R.I. 538, 410 A.2d 116 (R.I. 1980).