Most policies contain a post-loss condition requiring the insured to “[t]ake the following steps: (1) Protect the property from further damage; (2) Make reasonable and necessary repairs to protect the property; (3) Keep an accurate record of repair expense.” And most policies back that up with “reasonable repair” coverage like this:
In the event that covered property is damaged by the ‘Perils Insured Against,’ we will pay the reasonable cost incurred by you for necessary measures taken solely to protect against further damage. If the measures taken involve repair to other damaged property, we will pay for those measures only if that property is covered under this policy and the damage to that property is caused by the ‘Perils Insured Against.’
Ok, fair enough. But what about the subsequent challenges that insurers sometimes present to insureds? For example: “Oh, sorry, John Policyholder, we are going to deny your claim because our loss investigation was prejudiced by your performing emergency mitigation repairs. In other words, Mr. Policyholder, we could not assess your loss because we did not get to see the claimed damage in its original state.” As another example: “Oh, sorry, Jane Policyholder, you are not entitled to appraisal because you made emergency mitigation repairs.”
If the circumstances allow, contemporaneously report the claim and advise the carrier you will do your best to mitigate the loss between then and whenever the carrier’s field adjuster knocks on your door. And take a ton of photos and videos of the before, during, and the after! If a water line erupts in the middle of the night I think (with my master of the obvious thinking cap on) your first order of business is getting a plumber out to your property to do whatever he or she needs to do to stop the flow of water into your house. And take a ton of photos and videos of the before, during, and the after!
Sounds sensible, right? Yep, you are being a good policyholder – you are complying with your contractual duty to mitigate. When (and if) the insurer subsequently presents you with the above challenges, present the insurer with some counter-challenges. For example: “Please show me, John C. Examiner, where the policy says my compliance with a post-loss condition eliminates coverage.” As another example: “Please show me, Jane C. Examiner, where the policy says my compliance with a post-loss condition waives my contractual appraisal rights.”
The insurance company should play nicely after you present it with your counter-challenge. If the carrier does not, a judge may not take kindly to your being punished for complying with a post-loss condition … especially considering the insurance company wrote the policy that obliges you to mitigate and that says nothing about the insurer’s ability to avoid coverage or curtail your contractual rights due to your mitigation efforts.
To read previous posts in my series on insurance policy conditions, click here.
