Most property insurance coverage insurance policies have a one or two yr swimsuit limitation interval. Some states will lengthen this timeframe to convey a lawsuit for numerous causes. Nonetheless, I generally run throughout situations the place a public adjuster or policyholder thinks that the swimsuit limitation interval has no impression on the time to demand appraisal. This isn’t right, and a requirement for appraisal ought to all the time be made earlier than the swimsuit limitation interval runs.
A not too long ago determined case in Pennsylvania demonstrated this level. 1 The details of the case are as follows:
On July 18, 2021, a hearth broken the Houtzes’ property…On the time, the Houtzes had an lively insurance coverage coverage issued by State Farm…After the Houtzes submitted discover of the loss, State Farm accepted the loss was coated beneath the Houtzes’ coverage. From July 2021 to March 2023, the Houtzes and State Farm negotiated the insurance coverage declare, and State Farm issued funds beneath the coverage. On July 13, 2023, after a dispute arose relating to the loss quantity, the Houtzes demanded an appraisal of the loss quantity pursuant to the coverage’s appraisal provision. The subsequent day, State Farm denied the appraisal request as premature as a result of it was not made inside one yr after the date of the loss, in violation of the coverage’s swimsuit limitation provision. The swimsuit limitation provision, titled ‘Swimsuit In opposition to Us,’ states: ‘No motion will probably be introduced towards [State Farm] until there was full compliance with all the coverage provisions. Any motion by any occasion have to be began inside one yr after the date of loss or injury.’
A lawsuit was filed, and the court docket ultimately sided with State Farm on the breach of contract motion:
The Houtzes haven’t alleged any details suggesting State Farm waived the swimsuit limitation protection. As an alternative, the Amended Grievance suggests the other. In its July 2023 letter denying the Houtzes’ appraisal request, State Farm explicitly acknowledged it was not waiving any limitations or provisions, and likewise claimed it had reminded the Houtzes of the swimsuit limitation provision in ‘correspondence all through this declare and [as] early as [its] letter dated August 12, 2021.’ State Farm’s specific reliance on the swimsuit limitation provision for nearly two years doesn’t represent waiver, and the Amended Grievance contains no allegations on the contrary.
There are additionally no details pled to recommend State Farm induced the Houtzes to delay bringing this motion. The Houtzes declare had they identified State Farm ‘would take an unreasonable and unjustified place to refuse appraisal just because they have been past the swimsuit limitation, swimsuit would have been beforehand filed.’ As a result of the appraisal denial occurred lengthy after the one-year limitation interval expired, the implication is State Farm induced them to delay their appraisal request till after the one-year limitation. However the Grievance comprises no factual allegations to this impact. Certainly, the Houtzes allege nearly no details relating to State Farm’s conduct previous to its appraisal denial, and no details suggesting any inducement. The Houtzes solely allege they ‘continued to barter the declare’ and State Farm ‘was complying with its tasks.’ These details don’t plausibly recommend State Farm induced the Houtzes to delay this motion.
Of their response in opposition, the Houtzes argue State Farm ‘purposefully, and even inadvertently, wait[ed] till one yr ha[d] handed from the date’ of the fireplace to disclaim appraisal, as soon as State Farm ‘believed it was immune from swimsuit.’ The Courtroom is unpersuaded given the Houtzes’ personal allegations reveal the other. The Houtzes allege ‘[a] dispute rose as to the quantity of the loss.’ Am. Compl. As soon as the Houtzes demanded appraisal, State Farm acknowledged receipt of their demand and explicitly denied the demand beneath the swimsuit limitation provision at some point later. The Courtroom can not discover estoppel to use when the Houtzes haven’t offered any data—past their very own conclusory allegations—on how State Farm allegedly delayed this motion. As a result of the Houtzes haven’t alleged details plausibly suggesting waiver or estoppel, the swimsuit limitation provision is enforceable. Houtzes’ breach of contract declare is thus time-barred by the availability. Accordingly, Depend I will probably be dismissed.
The primary lesson is to demand the appraisal well timed and earlier than the swimsuit limitation interval runs. The second lesson to recollect is that many states require a lawsuit to be filed inside the swimsuit limitation interval, even when the matter is in appraisal. I famous this second lesson in When Does the Statute of Limitations Run After a Texas Appraisal:
Value determinations are a standard various technique to litigation for resolving property insurance coverage disputes. Nonetheless, the time to file swimsuit varies from state to state, even when an appraisal is invoked. Policyholders ought to be cautious that although an appraisal is invoked, some states nonetheless enable the time to convey swimsuit to run regardless of the continued appraisal. Statutes of limitation when an appraisal is concerned generally is a complicated and infrequently missed facet of a declare with disastrous outcomes if the problem shouldn’t be legally analyzed.
Swimsuit limitation durations and statutes of limitations might be tough to establish. If you’re not clear when the deadline to file swimsuit will happen, all the time search an opinion from a professional legal professional.
Thought For The Day
Targets aren’t sufficient. You want objectives plus deadlines: objectives large enough to get enthusiastic about and deadline to make you run. One isn’t a lot good with out the opposite, however collectively they are often large.
—Joe Griffith
1 Houtz v. State Farm hearth & Cas. Co., No. 23-3579, 2024 WL 2392982 (E.D. Penn. Could 23, 2024).