Prompt notice and whether an insurer must show it was harmed by a late one, the sworn proof of loss and the time allowed to submit it, the examination under oath and the duty to cooperate, appraisal of the amount when only the number is in dispute, actual cash value against replacement cost and the holdback, the suit limitation clause that shortens the ordinary period, denial letters and the reasons an insurer must give, and bad faith.
Actual cash value is commonly measured as the cost to repair, rebuild or replace less a fair deduction for physical depreciation, and California limits that deduction to components normally subject to repair during a structure's useful life. Replacement cost coverage pays the full cost, but the standard mechanism advances actual cash value first and releases the depreciation holdback when repairs are complete, within a period the policy or a statute sets.
A denial that turns out to be mistaken is a breach of contract. Bad faith requires more: conduct that was unreasonable, or a failure to attempt in good faith to settle where the insurer could and should have done so. Florida creates a statutory civil remedy conditioned on sixty days of written notice with an opportunity to cure, and provides that mere negligence alone is insufficient. Several states also impose interest on overdue payments.
Additional living expense coverage pays the increase in the cost of living while a residence is uninhabitable after a covered loss. California requires an insurer to give the claimant a list of items it believes may be covered, sets a floor of twenty-four months for losses connected with a declared state of emergency with extensions to thirty-six, requires two weeks where a civil authority order restricts access, and allows an advance of four months on a total loss.
State claims practices rules require a written decision within a stated period and a reasonable explanation of the basis in the policy or the law. Ohio bars denying a claim on a specific policy provision, condition or exclusion unless the denial refers to it, and requires a decision within twenty-one days of a properly executed proof of loss. Florida requires payment or denial within sixty days with a written explanation.
A public adjuster is licensed to prepare and negotiate a first-party claim on behalf of the insured for compensation. Florida caps the fee at ten percent for claims made in the year after a declared state of emergency and twenty percent otherwise, with a separate ceiling for reopened and supplemental claims, and requires a written contract with cancellation rights and a written estimate within sixty days. California requires a contract on a commissioner-approved form.
The appraisal clause applies when the parties agree the loss is covered and disagree about how much it is worth. Each side names a competent and disinterested appraiser within twenty days, the appraisers select an umpire, and an itemized written award signed by any two determines actual cash value and loss. California makes appraisal a request rather than a demand and bars compulsion after a declared disaster. Wisconsin tolls the suit limitation while appraisal runs.
First-party policies require notice of loss in terms like immediate or as soon as reasonably possible rather than by a fixed count of days. Most states will not enforce forfeiture for late notice unless the insurer shows prejudice, and Wisconsin codifies both the rule and a presumption that shifts after a year. New York's statutory prejudice requirement is written for liability policies. Florida imposes an outer statutory deadline for property claims.
Standard fire policy conditions require the insured to submit to examinations under oath as often as may be reasonably required and to produce books, bills, invoices and vouchers for examination. California adds statutory protections: notice of the determination to examine, a limit to information relevant and reasonably necessary, reasonable notice, time and place, the right to counsel, the right to record, and deposition-style objections.
The standard fire policy conditions require the insured to render a signed and sworn proof of loss within sixty days of the loss unless the insurer extends the time in writing, stating the time and origin of the loss, the interests of all parties, the value of each item and other insurance. Regulators require insurers to supply the forms and instructions, and bar denial merely because the proof was not on the insurer's usual form.
Standard fire policy forms bar suit unless commenced within a stated period after inception of the loss: twelve months in California, twenty-four in New York, two years in Minnesota. Wisconsin sets statutory periods and forbids a policy from shortening them, tolls the period while an appraisal is conducted, and bars suit until sixty days after proof of loss. Florida applies a five-year statutory period running from the date of loss.
Standard policy conditions require the insured to produce books of account, bills, invoices and other vouchers, or certified copies, at a reasonable time and place and to permit copies to be made. California limits the examination process to information relevant and reasonably necessary to investigate the claim. Ohio requires an insurer that treats the form of a submission as material to supply the specific documents and instructions itself.
