A recent Indiana Court of Appeals decision where Merlin Law Group’s Ed Eshoo was counsel for the policyholder provides a textbook example of how an insurance company’s conduct can waive strict policy requirements, even when attempting to preserve those rights through reservation letters. 1 The case offers valuable lessons for policyholders facing similar coverage disputes.

On April 7, 2020, a hailstorm damaged nine residential buildings at the Wildwood Court condominium complex. Wildwood filed a claim on June 3, 2020, and Property-Owners Insurance Company promptly began investigating. The insurer’s actions in the following weeks would prove critical to the court’s later waiver analysis.

The policy language required a sworn proof of loss to be filed within 60 days of the loss. The facts showed that the insurer:

  • Inspected the property just nine days after receiving notice of loss
  • Made an initial payment of $3,223.05 on June 23, 2020
  • Continued investigating and adjusting the claim for nearly two years
  • Made additional payments of $19,780.08 and $6,405.27 in late 2021 and early 2022

Only after Wildwood filed suit seeking full roof replacement did the insurer attempt to deny coverage entirely, arguing that Wildwood’s failure to submit a sworn proof of loss within 60 days voided all coverage. The court rejected this defense, finding the insurer had waived the requirement through its conduct.

The court emphasized several key factors resulting in the waiver:

  1. The insurer’s pattern of investigating and paying portions of the claim was inconsistent with enforcing strict proof of loss requirements.
  2. The insurer’s actions led Wildwood to reasonably believe they were disputing the scope of damages rather than coverage entirely.
  3. The primary purposes of the proof of loss requirement – fraud prevention and claim investigation – were satisfied through other means, as there was no suggestion of fraudulent conduct or lack of necessary claim information.

Practical Implications and Lessons 

This case reinforces that “slight acts and circumstances” can constitute a waiver of policy conditions.

Insurance companies cannot engage in extensive claims handling, make multiple payments, and then attempt to retroactively enforce technical policy requirements that would void coverage entirely.

The decision serves as an important reminder that courts will look beyond an insurer’s reservation of rights letters to examine the totality of their conduct. When insurers act inconsistently with their stated positions, courts are likely to find waiver of policy conditions that would otherwise bar coverage.

For policyholders, this case demonstrates the importance of documenting all claim-related communications and preserving evidence of the insurer’s conduct throughout the claims process. Such documentation can prove invaluable if the insurer later attempts to deny coverage based on technical policy requirements they previously appeared to waive through their actions.

Cheers to Ed Eshoo! This is another victory in a long string of wins for one of the strongest policyholder advocates in the country.

Thought For The Day 

A handful of men have become very rich by paying attention to details that most others ignored.
—Henry Ford

1 Property-Owners Ins. Co. v. Wildwood Court of Munster Condo. Assoc., No. 23A-PL-2873, 2024 WL 4579429 (Ind. Ct. App. Oct. 25, 2024).