The policyholder subsequently rebuilt the sunroom.

Even though the policy states that the rebuilding of the structure has to be done within 180 days of the ACV payment, are there any exceptions to the 180-day rule that would allow the policyholder to be paid the depreciation?

— Kentucky Subscriber

Answer. Most policies do not have any language listing extenuating circumstances as reasons not to adhere to the policy conditions. A carrier may have internal procedures, but that is not in the policy language.

Unless the policy language specifically states something to the contrary, the carrier can stick to the stated language. If the insured notified the carrier of the situation and kept them posted throughout that could give the insured some standing, but if the insured didn't mention anything to the carrier and comes back years later I can't see why the carrier would provide the difference between ACV and replacement cost.

Question. We have a major homeowner loss where the owner was out of the country when the fire rendered the home a total loss.

Her agent (who also happened to be out of the country on his own vacation) was made aware of the loss two days later and notified the homeowner. He did not, however, notify the carrier. The carrier was not aware of the claim until our office was involved 14 days later.

The carrier has sent letters alluding to the verbiage regarding the “Duties after Loss” — which of course involves notifying the carrier in a timely fashion. Doesn't that fall on the direct writer agent and his E & O [errors and omissions] policy?

How could the carrier deny the claim when its own agent didn't report it?

— Kentucky Subscriber

Answer. If both the agent and the homeowner are out of the country, I hardly see how the carrier can say that 14 days after the loss isn't prompt notice. The ISO HO 00 03 requires prompt notice to the carrier or the agent; as the agent represents the carrier, in most cases that is going to be considered notice to the carrier, even though the carrier wasn't directly notified for two weeks.

As long as reasonable attempts to protect the property were made, I see no reason why the carrier would hesitate in paying this claim. People are allowed to take vacations, even insurance agents, and depending on what countries they were in internet access may not have been as readily available as it is in the United States.

Merriam Webster online defines prompt as “being ready and quick to act as occasion demands; performed readily or immediately.” Although 14 days isn't immediate, the loss certainly was reported readily. Should this go to court, I can't see a court finding for the carrier unless serious, extensive subsequent damage occurred within those 14 days.

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