Attorneys who handle insurance claims know that almost all insurance policies have a cooperation clause in them. This means that the insured has a duty under the policy to cooperate with the insurance company in its investigation of the claim. One of these duties is to file a proof of loss.
As discussed as early as the 1926, Texas Supreme Court opinion styled, Commercial Union Assurance Company v. Preston, policies sometimes require that the insured file a proof of loss, as a condition precedent to enforcement of the policy. This was restated in the 1954, Fort Worth Court of Appeals opinion styled, Whitehead v. National Casualty Company. A “proof of loss” is a statement to the company, stating, among other things, the cash value of each item of property lost or damaged by fire, and the amount of loss. Further, the company may require that the insured swear to the accuracy of the proof of loss.
A 1960, Fort Worth Court of Appeals opinion styled, International Service Insurance Company v. Brodie, says the policy provision requiring a proof of loss is for the insurer’s benefit and may be waived by the company. In the Brodie case, the insurance company was found to have waived the proof of loss requirement where it would only accept proof asking for amount its adjusters agreed to, although the insurer wanted more.
Compliance with the proof of loss requirement may be excused — for example when the failure to file a proof of loss does not affect the insurer’s exposure, or when the lack of a proof of loss is due to the beneficiary’s non-negligent ignorance of the requirement. This was the finding in the above mentioned Whitehead opinion.
The Texas Supreme Court in 1990, in the opinion styled, Viles v. Security National Insurance Company, pointed out that if the insurance company denies the claim before the time by which the insured must file a proof of loss, the insured is relieved of that requirement.
Another point to keep in mind is found in 28 Texas Administrative Code, Section 21.203(7). This section points out that it is an unfair claim settlement practice for an insurer to fail to provide promptly to an insured any forms the insurer requires as a prerequisite for claim settlement.