People in Grand Prairie, Fort Worth, Mansfield, Crowley, Burleson, Benbrook, Joshua, and other places in Tarrant and Johnson County need to understand the importance of notifying the company quickly when a potential claim arises.
The Fort Worth Court of Appeals issued an opinion in 2007 dealing with “notice” to an insurance company about a claim. This one is a little unusual but still illustrates the importance of notifying the insurance company about potential claims as soon as possible. The style of the case is, Allstate Insurance Company and Allstate Texas Lloyd’s v. John Hunter and Wife, Carmen Hunter. Here are some facts.
In the summer of 2002, the Hunters noticed a strange smell in their home. The Hunter’s HO-B homeowner’s policy with the Allstate companies expired in October 2002, and the Hunters replace it with an HO-A homeowner’s policy. The strange smell persisted, and in December 2002, the Hunters hired a company to conduct air sampling testing in their home. The results revealed no elevated mold content in the air and offered no explanation for the smell. In February 2003, a general contractor inspected the Hunter’s home. When the contractor entered the crawlspace under the home, he saw water damage and mold. The Hunters testified that this was the first time they knew of the mold damage or that the source of the odor that they had been smelling was mold. They made a claim with Allstate two days later.
The Allstate adjuster determined the claim should be treated under the HO-A policy and hired a plumber to inspect the home. The plumber’s report showed an ongoing water leak in the home. Because the HO-A policy only covered “sudden and accidental” plumbing leaks, the claim was denied.
The Hunters then requested Allstate to treat the claim under the HO-B policy. Allstate did so and again denied the claim based on the Hunter’s failure to comply with the condition of the HO-B policy requiring prompt notice of the claim. Allstate reasoned that if the claim had occurred under the prior HO-B policy, then the February notice of the claim was untimely.
This lawsuit resulted, for breach of contract, attorney fees, and violation of the Prompt Payment of Claims Act.
The Hunters won at trial but this court reversed the finding and rendered judgment that the Hunters take nothing.
In it’s analysis, this court said that the evidence was that the Hunters could not determine when the leak occurred and that the HO-A policy only covered sudden and accidental discharge from the plumbing system. Also that under the HO-A policy, the mold damage was not covered. And that the HO-B policy claim was untimely.
Concerning mold, the evidence indicated there are two triggers that exist as to the discovery of mold. One is a report of visible mold at the home and the other is a report of mold odors. The evidence showed that the evidence of mold odors first occurred in the summer of 2002, while the HO-B policy was in effect. When the Hunters noticed the odor, they called inspectors and and a contractor but did not notify Allstate of the potential claim for benefits.
In making its ruling, this court said the evidence did not establish that the damage to the Hunters home may have occurred prior to the policy change in October of 2002. Using the proper case law definition of “manifest” — that is, when the damage was capable of being easily perceived, recognized and understood — there is no evidence that the damage manifested prior to that date. In fact, the evidence established that despite searches by the Hunters and the air-testing experts, the damage to the Hunters home did not “manifest” until February 2003, when The contractor found it in the crawlspace under the Hunters home.
The Hunters argued that a damage manifests when it is capable of being perceived by one’s senses and that, consequently, the mold manifested the previous summer. The problem with that argument is that if the damage manifested itself on the date that the Hunters smelled it, then that is the date on which the Hunters duty to notify Allstate of the claim was triggered. They did not do so.
Having an experienced Insurance Law Attorney involved early in these claims is important. The attorney will need to know the facts that exist at the time and will need to be able to see and read any applicable policy of insurance.
Updated: