The “Suit Against Us” provision is typically found in the “Conditions” section of a homeowners insurance policy. This provision explains to an insured when he or she can initiate a lawsuit against the insurance carrier. However, the timeline reflected in the provision may not be enforceable as certain states do not allow the insurance policy to conflict with the state’s Statute of Limitations for Breach of Contract Actions.
In Maryland, actions for breach of contract are generally governed by Maryland’s three-year statute of limitations.1 Any provision contained in any contract of insurance that shortens the three-year Statute of Limitations in Maryland is against public policy, illegal, and void.2 Also of importance is that the accrual of a breach of contract action takes place when the breach occurs.3
Contrast the above with the rules of the State of Delaware, which neighbors Maryland. Although Delaware’s Statute of Limitations for Breach of Contract actions is three years, “Suit Against Us” provisions in insurance policies which shorten the time reflected in the Statute of Limitations are enforceable in Delaware.4 The provisions can also limit the accrual of the action to the date of the loss.
It gets even more convoluted when you consider how other neighboring states govern the “Suit Against Us” provision and factor in issues such as writs of summons and equitable tolling. Merlin Law Group attorneys have previously blogged about the “Suit Against Us” provision for the States of New York, Pennsylvania, and New Jersey. The links are below:
New York:
https://www.propertyinsurancecoveragelaw.com/2019/04/articles/insurance/statute-of-limitations-how-much-time-do-i-have-to-file-a-complaint-against-my-insurance-company-for-breach-of-insurance-contract-in-new-york/#more-23146
https://www.propertyinsurancecoveragelaw.com/2013/10/articles/insurance/new-york-statute-of-limitations-can-be-contractually-shortened-to-as-little-as-one-year-from-date-of-loss/
Pennsylvania:
https://www.propertyinsurancecoveragelaw.com/2014/06/articles/insurance/breach-of-contract-bad-faith-statutes-of-limitation-in-pennsylvania-part-1/
New Jersey:
https://www.propertyinsurancecoveragelaw.com/2014/09/articles/insurance/equitable-tolling-of-the-statute-of-limitations-in-new-jersey/
https://www.propertyinsurancecoveragelaw.com/2013/05/articles/hurricane-sandy/statute-of-limitation-issues-in-new-jersey/
Considering the various rules depending on the State, I make it a personal practice to file an action within the time reflected in the policy. It is the best way to ensure that you won’t run into an issue. If you do find yourself with a question pertaining to a “Suit Against Us” provision, please give us a call.
___________________________________
1 Dual Inc. v. Lockheed Martin Corp., 383 Md. 151, 169, 857 A.2d 1095, 1105 (2004); Catholic Univ. of Am. v. Bragunier Masonry Contractors, Inc., 139 Md. App. 277, 297, 775 A.2d 458, 469 (2001), aff’d, 368 Md. 608, 796 A.2d 744 (2002).
2 Md. Code Ann. [Cts. & Jud. Proc] §12-104.
3 Commercial Union Ins. Co. v. Porter Hayden Co., 116 Md. App. 605, 657, 698 A.2d 1167 (Md. App. 1997).
4 Woodward v. Farm Family Cas. Ins. Co., 796 A.2d 638 (Del. 2002).
