The Importance Of Timely Notice When Making An Insurance Claim

Many insurance policies that might cover personal injury or wrongful death, truck accident, drunk driving, motorcycle accident, car accident , products liability, private nuisance, dog bite, or premises liability claims include a provision that requires the insured to provide timely notice of the possible claim to the insurance company. When such a notice provision is written as a condition precedent to policy coverage, the insured must show substantial compliance with the notice requirement. The general point of insurance policy notice provisions is to provide insurance companies with a fair and early opportunity to evaluate and perhaps defend against claims.

The timeliness of an insured's notice is not an easy question to answer in most cases. There is no bright-line time limit after which notice is always considered untimely. It depends upon the facts of the case; each case is unique and the timeliness of the insured's notice will hinge upon the circumstances.

An important factor for determining timeliness is whether the insurance company had any knowledge about the loss within a short time after the loss occurred. Waiting several months or a year or more to provide notice may result in forfeiture of the insured's rights. In one case, the Iowa Supreme Court rules that an insured had lost its insurance rights when it waited five years to give the insurance company notice of the loss.

If notice is required and the insured does not substantially comply with the notice requirement, then the insured must prove that failure to provide timely notice was excused, that the insurance company waived the requirement of timely notice, or that failure to provide timely notice did not prejudice the insurer. Normally, an insured’s substantial breach of a notice requirement is presumed prejudicial to the insurer. To rebut that presumption, the insured must prove that the insurer was not prejudiced.

Prejudice will often be found if the delay in notice hindered or eliminated the insurer's ability to view or inspect the scene. The Iowa Court of Appeals recently discussed this issue in B & F Jacobson Lumber & Hardware v. Acuity. The court held that the jury would have to decide whether the insurer was prejudiced by a possible delay in reporting a claim, even though the insured had not begun any repairs until after the lawsuit was filed.