In the world of property insurance, each side has certain obligations to the other. It is the fullfilling of these mutual obligations that allows the system to work. Here’s a handy list of each side’s obligations to the other, worth keeping in mind regardless of which side you side you’re on.
Most property insurance policies impose a number of duties on the insured via conditions in the policy. These include the obligations to:
- Give notice to the insurer as soon as possible after the loss;
- Take reasonable steps to secure and protect the property from further damage;
- Produce receipts, inventories, photographs, books and records, and other documentation on request by the insurer;
- If requested, complete and execute a sworn proof of loss within the time limits set forth in the policy; and
- If requested, submit to an examination under oath.
When a claim is presented, the insurer’s obligations include:
- Acknowledging receipt of the claim;
- Providing notice of coverages and benefits;
- Producing the policy and other documents related to the claim;
- Conducting a full and fair investigation;
- Communicating with the insured; and
- Promptly paying undisputed amounts due under the policy.
Insurance litigation arises when one or both sides fails to meet its duty. Many times this failure is simply due to ignorance. It always pays to know your duties and to comply with them. It’s also very useful to know the duties of the other side, so you can possibly exploit any lapses.
For everything you need to know about property insurance obligations, check out CEB’s new book California Property Insurance: Law and Litigation, chap 9. My discussion of this new book with its contibuting editor, Tim Sullivan, is up on YouTube.
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