Proof-of-Loss Form Critical to Filing a Damage Claim

If you ever have to file a homeowner's insurance claim, you'll likely be asked to fill out a sworn proof-of-loss document - and it's vital that you do this.

Two court decisions illustrate the importance of filing a sworn proof-of-loss document with your insurer to support a homeowners' claim.

In one case, James Durall, Jr. vs. Home-owners Insurance Company, the Michigan Court of Appeals ruled that a homeowner who had suffered a total fire loss was not entitled to coverage because he had failed to submit a sworn statement of proof of loss within 60 days of the claim.

In that case, a fire destroyed the home during the night of Oct. 31.

After Durall reported the claim to his insurance company, he received a letter from Home-owners Insurance Co. instructing him to review the terms of his policy and stating that he had to file a sworn statement in proof of loss as a result of the fire by Dec. 31. Yet Dural didn't file the proof of loss - through an attorney - until March 26 of the following year.

In the second case, Richard Palkimas vs. State Farm Fire and Casualty Company, the Connecticut Court of Appeals decided in favor of the insurer on similar grounds.

Palkimas had a homeowner's insurance policy when his property was damaged in September because contractors working on his home had used a toilet that had been blocked off, "resulting in a build-up of sewage and the breaking and rupturing of a sanitary pipe, as well as the spreading of sewage and fecal matter throughout the home."

In January the following year, while attempting to repair the damaged sanitary pipe, the plaintiff discovered that "freezing temperatures caused substantial damage to [his] home, including fracturing of the plaster walls and building structure."

Palkimas filed claims for the two losses, but never filed a proof of loss for those claims.

The insurer denied coverage for both claimed losses and damages, citing the plaintiff's failure to submit a proof of loss as required under the policy.

The state appeals court upheld a lower court's decision to throw the case out based on his failure to submit the proof of loss.
 
Claims-filing tips

• While many times the insurer will send the proof-of-loss form to the insured after a loss, you should not rely on them to do so. Regardless of whether or not the insurer sends the form, you will be bound to the language in the policy that requires the submission of the proof of loss within the 60-day time period.
• If you don't receive a proof of loss form, ask for one.
• If you request an extension, do not assume it has been granted unless the insurer agrees to it in writing. It is routine for insurers to agree to such extensions.
• Read your policy carefully. Courts continue to reaffirm the requirement that an insured is obligated to read their insurance policy and raise any questions within a reasonable period of time. However, the fact remains that many policyholders never read their policies and, even if they do, may not understand what they are reading or what questions to ask.
• Make sure you are thorough when filling out your proof-of-loss form. Remember that these forms are sworn statements and information that is inaccurate can provide a reason for the insurer to deny coverage due to a material misrepresentation.

 
The lesson
Every homeowner's policy requires the insured to sign and file a sworn statement in proof of loss, usually no later than 60 days of the time of the loss.
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If you fail to file a proof of loss as required by the policy, you essentially give up the right to sue your insurer for the claim if they refuse to pay.