The Case of Homeowners, Hurricane Irma Damage and Their Homeowner Insurance Policy

By: Danny Hernandez

Mr. and Mrs. Policyholder had damages caused by Hurricane Irma. During the storm the Policyholders heard a lot of wind and rain. After the Hurricane they came out to check the property and noticed debris and trees down. However, they didn’t notice damage to their home, although they aren’t experts in construction.

Policyholders noticed a minor leak in 2018 and attempted to repair themselves as they believed it was just a minor issue. The leak stopped until 2020 when the issues got worse. At this point, the Policyholders realized this was a bigger problem than they anticipated, and they needed help. So, they hired a Roofing Company to make repairs to the roof and attic. After the repairs were completed, they were informed about a Public Adjuster and how they could help.

The Public Adjuster arrived at the Policyholders’ home and inspected the property. After the Public Adjuster had an opportunity to explain their rights and benefits based on the damages, they gave authority to have their claim filed with the insurance company.

The Policyholders provided the following to the Carrier: Roof Repair Receipts, Sworn Proof of Loss, Estimate for Repairs, Photographs of the Damages, and Mold Documents.  The Corporate Representative was deposed and stated the Carrier received all documents that they requested.

Once the insurance company was notified, they began their investigation, which we assert was subpar at best. The Carrier sent out a Field Adjuster to inspect the property and he was given a very limited assignment. He was tasked with just looking around and taking photos of the damage. He was not tasked to physically manipulate any roofing components to see if they were loose. He was not tasked to determine cause and origin and he admitted under oath that he was not qualified to determine cause and origin either.

The Field Adjuster did not have any specialized training in engineering, general contracting, or roofing. The Field Adjuster did confirm damage to the roofing system in the form of cracked and missing tiles throughout the roofing system, however, he was not able to independently conclude the cause of the damage.

The Field Adjuster also confirmed interior damage, however, he was not able to independently conclude the cause of the damage. The Field Adjuster never reviewed any documents that were provided, nor did he attempt to discuss anything with the Roofing Company that completed repairs. Notwithstanding the fact that the Field Adjuster could not conclude causation he failed to recommend an expert to perform any inspection and testing who could confirm the damages reported.

The subpar investigation continues with the assignment of the Desk Adjuster. Similar to the Field Adjuster, the Desk Adjuster was not tasked to determine cause and origin and he admitted under oath that he was not qualified to determine cause and origin either. The Desk Adjuster did not have any specialized training in engineering, general contracting, or roofing. The Desk Adjuster did not go to the property to inspect. 

Notwithstanding, the Desk Adjuster was tasked with making a coverage decision. Similarly, the Desk Adjuster did not have any conversations with anyone including their own Field Adjuster or the Roofer that completed repairs. The Desk Adjuster did confirm damage to the roofing system in the form of cracked and missing tiles throughout the roofing system, however, he was not able to independently conclude the cause of the damage. The Desk Adjuster also confirmed interior damage, however, he was not able to independently conclude the cause of the damage. Notwithstanding the fact that the Desk Adjuster could not conclude causation, he failed to recommend an expert to perform any inspection and testing who could confirm the damage reported.

The Carrier ultimately denied the Policyholders claim and the reason provided was that they were prejudiced by the late reporting of the loss. The Policyholder were then forced to file a lawsuit against the Carrier. The Carrier filed a Motion for Summary Judgment on the grounds that they were prejudiced by the late reporting of the loss. The Policyholders enlisted an expert engineer to inspection the property and determine cause and origin as the Carrier should have done. The Expert for the Policyholders was able to conclude that the Hurricane was in fact the cause of the damage reported.

The Policyholders responded to the Motion for Summary Judgment with the following caselaw: The correct test when an insurance company has alleged that the policyholder has failed to promptly notify of the damages and losses sustained involves a two-step analysis.

The first step requires a finding that the loss was reported untimely. If the insurance company proves that the notice was untimely, prejudice to the insurer is presumed and the insured has the ability to prove the insurer was not prejudiced. An insured can avoid such presumption of prejudice by presenting evidence that the insurer was not in fact prejudiced by non-compliance with the condition. The passage of calendar days is insufficient, in and of itself, to avoid indemnifying for the losses sustained. Most importantly a party cannot create its own prejudice and thereby benefit from it.

The Policyholder argued that even if Prejudice is presumed the Policyholders have rebutted the presumption by the evidence provided and the lack of evidence provided by the Carrier. The Carrier’s sole focus to prove their argument was the passage of time which is not permitted. Secondly, any prejudice that occurred in the investigation was the fault of the Carrier.

By putting their head in the proverbial sand, they have caused any and all prejudice. The Policyholders have also rebutted the presumption of prejudice by enlisting an expert who was able to provide an opinion as to cause and origin.

The Judge agreed with the Policyholders’ position and Denied the Carrier’s Motion for Summary Judgment.