Why is time of the essence with insurance claims?

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March 11, 2019
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Why is time of the essence with insurance claims?

property damage claims

There are numerous time frames for both the Insured and Insurer to abide by and there are risks and potential consequences on both sides if not followed. Below are a few important ones to remember and consider during the claims process.

Loss reporting:

When a loss happens to covered property, the Insured has a duty to timely report the claim to their agent or carrier, per policy conditions. You ask why is that so important? As soon as the Insured is aware, they have a legitimate claim, it is very important to call in their claim ASAP. If this is not done promptly, the claim may be prejudiced and for various reasons.

90-day rule:

After a loss is reported to the carrier or agent, the carrier has 90-days to pay or deny the claim, given there are no obstacles beyond their control. As an example, the carrier hires an engineering company who has not submitted their findings or report in a timely manner.

14-day rule:

Even though proper business etiquette is to return calls or emails within 24 hours, the department of financial services requires that communication replies from the carrier are due within 14-days.  

Proof of loss:

Possibly the single most important document the carrier could ask for, this form requires vital information including an amount representing the damages, interest in the property, policy limits, etc., all of which must be notarized and returned to the carrier usually within 60-days of the request.