By Julie Patel July 18, 2012 03:45 PM
State Farm policyholders with pending claims in Broward and Palm Beach counties could have a harder time getting reimbursed for repairs to their property.
In a ruling today, an appellate court sided with State Farm and a lower court’s decision that a claim filed by policyholders Sheila and William Kramer can be denied because they did not submit detailed documents under oath describing the damage and repair costs within 60 days of the damage – even though the insurer didn’t explicitly ask for them when the claim was reported.
Most insurers ask for the documents, called a proof of loss, when the claim is reported, according to several insurance experts.
“An insurer will typically – routinely – ask for a proof of loss,” Lynne McChristian, spokeswoman for the Insurance Information Institute, wrote in an email. “There must be something submitted in writing or through photographic evidence, as requested by the insurance agent or company. When someone makes a call to an insurer with a claim, they are asked for this information and/or sent an email or letter explaining what is needed.”
The Kramers filed a claim in May 2009, more than four years after they said their roof was damaged by hurricanes, according to court documents. They didn’t have any leaks until 2008, and didn’t realize the repair costs would be more than their deductible until 2009, according to the documents. In July 2009, State Farm wrote them to say they violated their agreement with the insurer because of the proof of loss requirement. Later that month, the Kramers filed a proof of loss.
State Farm’s ability to properly investigate and handle the Kramers’ claim was compromised for many reasons, including the fact that it took so long for them to file the claim, according to State Farm Spokeswoman Michal Connolly. “All claims are handled on an individual basis with their own unique circumstances, and this case was unusual given the extended length of time that passed prior to notification,” she said. In court documents, the insurer said the proof of loss requirement is noted in its policies.
“How many State Farm [customers] know what a proof of loss even is much less that they have…to submit one with in 60 days after a loss?” said Ryan Ratliff, an attorney in Coral Springs whose firm represents policyholders.
Ratliff said the opinion could theoretically allow State Farm to deny most claims filed by people who live in Broward and Palm Beach counties because they are within the jurisdiction of the court, the Fourth District Court of Appeal.
Florida courts have been divided on whether insurers can deny claims if they didn’t receive a proof of loss in time, even if they did ask for it, according to attorneys at Merlin Law Group in Tampa, which represents policyholders. If policyholders had a good reason for not submitting the documents, they might be excused.