What happens when a claim is filed 180 days after the date of loss?

Coverage Q&A: The insured learned of hail damage more than six months after the event occurred.

How do insurers handle claims submitted more than 180 days after the date of loss? (Photo: Shutterstock)

Every claim is different, and some insurance policies can be difficult to interpret for unique situations. FC&S Expert Coverage Interpretation, the recognized authority on insurance coverage interpretation and analysis for the P&C industry, makes it simple to find credible answers to your complicated coverage questions. Analysis brought to you by our FC&S experts. 

Editor’s Note: This week’s question addresses what happens when a claim is made six months after the date of loss.

Question: Our insured learned of hail damage to the roof of a two-story wood shack some time after the event occurred. He notified his carrier, which then performed a weather assessment and found that a hail storm occurred more than 180 days before the claim was submitted.

The insured’s policy states: “Loss to a building insured under Coverages A or B is settled as follows: (5) You may disregard to replacement cost loss settlement provisions and make a claim under this policy for loss to buildings on an actual cash value basis. You may then make a claim for any additional liability in accordance with D.2.a. above if you notify us, within 180 days after the date of loss, of your intent to repair or replace the damaged building.”

Would the carrier have the right to limit the claim to no replacement cost value benefit even though the policyholder did not know he had hail damages until recently? It appears that the policyholder has met all duties to date.

— North Carolina Subscriber 

Analysis: The date of loss is critically important to a claim. Whether the loss occurred during the policy period in question is the first concern, but there are other concerns, as well. Did the insured know of the damage and neglect it until they had free time, or was the damage unknown until a subsequent loss occurred? To what extent are insureds supposed to monitor every aspect of the property to be sure they know of any damage as soon as it happens?

Answer: To learn the answer to this week’s coverage Q&A, please log into your FC&S Expert Coverage Interpretation account.

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