Proof of loss deadlines are always a little tricky when the case law is not clear. For the Maui wildfire victims with an insurance policy that requires a proof of loss to be filed within 60 days from the date of the loss, my suggestion is to be safe rather than sorry and obtain an indefinite extension to file a proof of loss.
The one reason I make this suggestion is a Hawaiian case1 that has the following troubling language:
The Creveling court further provided that ‘forfeiture clauses often include provisions such as filing a timely notice of claim and submitting proofs of loss, and are invoked to avoid liability for existing coverage.’…see also Potesta, 504 S.E.2d at 150 n. 16 (defining ‘technical ground’ to indicate ‘a ground that does not involve a coverage issue, such as the insured’s failure to timely submit the insurer a proof of loss form’).
The foregoing principles comport with this court’s decision in Best Place, wherein the subject policy required the insured to submit a proof of loss within sixty days of the claimed loss, which the insured failed to do. Id. at 123, 920 P.2d at 337. Although the insurer could have denied the insured’s claim at that point, it elected not to do so….Instead, the insurer ‘chose to implicitly waive that [sixty-day] provision as evidenced by its letter, which sought more information with respect to documents tending to establish the legitimacy of [the insured’s] claim.’…Consequently, this court held that the insurer’s post-deadline request for additional information constituted an implied waiver of any defense based on the sixty-day time limitation and that the insurer was precluded from introducing evidence of the insured’s breach of duty with regard to the proof of loss. Id.; see also Nestegg Fed. Credit Union v. Cumis Ins. Soc’y, Inc., 87 F.Supp.2d 144, 148 (N.D.N.Y.2000) (holding that, because the defense of failure to file a timely complaint existed at the time of the insurer’s disclaimer letter, and because it was not raised in the disclaimer letter, the insurer waived the forfeiture defense).
My concern is that the Hawaiian court referred to the proof of loss as a forfeiture clause. While the insurance companies may commit an unfair claims practice by demanding a formal proof of loss under certain circumstances, as noted in Claims Handling Requirements by State – Hawaii, there is no case directly on point. Some cases have found circumstances that constitute a waiver of the proof of loss, but why risk anything when my bet is that all insurers will simply grant an extension.
Many property insurance policies have a provision that requires a proof of loss to be provided only after it is demanded. However, some insurance policies have a 60-day after the date of loss provision to provide such proof. In all of my courses, I teach policyholders and public adjusters to carefully check the policy just to make certain they know which type of provision is in the policy.
Denise Hsu Sze is an attorney who once worked with our firm and obtained a bar license to practice law in Hawaii. If you are a policyholder on Maui and want an experienced property insurance lawyer who is licensed in Hawaii to provide advice about this situation or any other issue, my suggestion is that you call her at 808-727-0398.
Again, from experience in law and life, the easy way to avoid disaster is usually the best course of action unless there is a huge upside to do otherwise. If you are not certain what to do, call Denise for a legal opinion and guidance.
Thought For The Day
Our problems are man-made, therefore they may be solved by man. And man can be as big as he wants. No problem of human destiny is beyond human beings.
—John F. Kennedy