Two major state supreme court decisions on insurance coverage for pandemic losses and a Colorado ruling on whether policyholders can be excused for making late homeowners claims are among the top property insurance decisions of 2024 so far.
Here, Law360 looks at seven rulings implicating property damage or policies:
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Colorado Extends Notice-Prejudice Rule to Homeowners Claims
A rule excusing some policyholders for filing late claims applies to first-party homeowners’ property policies, a divided Colorado Supreme Court held in March, reversing two insurers’ wins in a pair of coverage disputes over hail damage.
The ruling stands out for what some attorneys have described as a trend favoring policyholders that allows more flexibility for late claims if the insurers aren’t prejudiced in some way by the late filing. The 4-3 court decided, in part, that there were also public policy objectives of compensating injury victims to support their finding.
“We disagree with the contention that the notice deadlines of the occurrence policies at issue here were fundamental terms of those insurance contracts,” the court said. “So concluding effectively converts the policies at issue to claims-made policies.”
While the cases concerned hail damage, experts say the decision could affect late notice claims for any manner of property damage in a state with many disaster risks. Smoke-related damage in particular can be hard to identify in full following a disaster.
“It’s a hard line to have to bring suit within one year of the damage,” said Marc T. Ladd, an attorney with Cohen Ziffer Frenchman & McKenna who represents policyholders. “I would like to see in the next year, how many courts — especially ones that are closer to Colorado — might follow this same trend.”
Thomas Bush, an attorney with Smith Gambrell & Russell LLP who represents insurers and reinsurers, also noted that growing trend to expand notice-prejudice rules.
“Go back 100 years, these notice rules were applied rather strictly,” he said.
The cases are Gregory v. Safeco Insurance Co. of America, case number 2022SC399, and Runkel et al. v. Owners Insurance Co., case number 2022SC563, in the Colorado Supreme Court.
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