A continuing topic in our most recent blog posts has been obligations that insured property owners must comply with following a loss or damage to their insured property. One such obligation is the “duty to cooperate” with an insurance company in its investigation of a claim for property loss or damage.  This post-loss obligation is very broad as the term “cooperate” is not generally defined in insurance policies.  Similarly, insurance companies do not provide its insureds or the public with information concerning its investigation procedures and processes.

Claim investigations are necessary, however, because property insurance statutes in Florida require insurance companies to properly investigate an insured’s claim prior to making a coverage determination. Therefore, an insured must make a good faith effort to cooperate with the insurance company’s investigation in order to obtain a favorable coverage determination which results in payment for the claim. Compliance with this obligation must be balanced, however, against a prudent and thoughtful analysis and determination of the scope of information that the insured is required to provide to the insurance company.

Most often, a claim investigation involves an inspection of the insured property, the insured’s examination under oath, a review of the insured’s records and documents, and a review of a sworn statement in proof of loss.  In addition, depending on the loss or damage being claimed, an insurance company may hire one of more consulting experts to perform additional inspections of the damaged property and provide a report of the observations and findings.

Situations may arise that would prevent an insured from cooperating with a claim investigation procedure.  For example, it is possible that an insured is not available on the date the insurance company requests an inspection, or an insured is no longer in possession of documents or records being requested by the insurance company. These are not proper reasons for denial of a claim. In contrast, purposeful delay of an inspection and willful refusal to produce documents upon request are both prime examples of an insured’s failure to cooperate, and will most likely lead to denial of claim.

An insured should always consult with an experienced attorney immediately following an insured property loss or damage and prior to making the property available for inspection, producing documents or records to the insurance company, and submitting to an examination under oath. We also recommend that insured property owners review their insurance policy to become familiar with their insurance company’s required post-loss obligations and duties.