Insurance attorneys know that a requirement of most insurance policies is that an insured give prompt notice to their insurance company of any claim. This is illustrated in a recent Western District of Texas, San Antonio Division opinion styled, Mark Sadovshy v. Nationwide Property and Casualty Insurance Company.
This lawsuit arises out of a hail and wind damage claim filed by Sadovshy against Nationwide. Sadovsky sued Nationwide for violations of the Texas Insurance Code and Breach of Contract. This case is being decided now on a Motion For Summary Judgment filed by Nationwide.
Nationwide claims it is entitled to summary judgment because Sadovsky failed to perform under the insurance contract by timely notifying Nationwide of his claim for damages.
Under Texas law, insurance policy notice requirements are interpreted as conditions precedent to coverage. A failure to comply with the notice requirement in a policy constitutes a breach of contract and relieves the insurance company of the obligation to defend or indemnify.
The policy at issue in this case required Sadovsky to give Nationwide prompt notice of a loss. When prompt notice is not defined in the policy, as here, Texas courts construe the phrase to mean that notice must be given within a reasonable time after the occurrence of the damage.
Whether notice is prompt is generally a question of fact and not subject to a motion for summary judgment, but if the facts are undisputed Texas courts may deem late notice unreasonable. This is especially true where the delay is totally unexplained and without excuse.
Here, Sadovsky originally provided a prompt notice filing a claim eight days after an April 12, 2016 storm. Nationwide paid this claim and closed the file. In the spring of 2017, Sadovsky saw neighbors installing new rooofs and had his roof e-inspected and found allegedly un-repaired hail damage.
Rather than giving prompt notice of this new discovery, Sadovsky waited until September 15, 2017 to communicate with Nationwide. Then, on October 4, 2017, sent a demand letter for damages. Neither Sadovsky or any of his witnesses could explain the delay.
In a case where prompt notice is not provided, the insurer must show they were prejudiced by the failure to provide such notice. Prejudice can happen when the failure to timely notify results in the insurer’s inability to investigate the circumstances of an occurrence to prepare adequately to adjust or defend the claim.
Here, the delay caused Nationwide to be unable to determine it the additional damage reported by Sadovsky resulted from the April 12, 2016 storm or was the result of a severe event that occurred in February of 2017.
The Court ruled in favor of Nationwide.
One must promptly report claims when they are discovered.