Get noticed! Relaying loss to the insurance company
COMMUNICATION is vital for any type of relationship to work effectively and endure the test of time.
It allows for a smooth flow of information among the parties involved, enabling them to make the right decision.
A contract of insurance is one of those relations requiring constant communication of relevant information between the insured and the insurer.
At times, communication or lack of it can lead to undesirable outcomes such as delays in or denial of insurance claims, or worse, revocation or cancellation of insurance policies.
One of the important pieces of information regarding insurance that ought to be shared by the insured to the insurer is the loss that he or she has suffered resulting from the peril or danger covered by the contract of insurance.
In general, if a loss is suffered by an insured due to the danger or peril covered by the policy, the cycle of filing a claim usually begins with notifying the insurance company.
However, notifying the insurer about the loss is not mandatory for most types of insurance policies, unless expressly agreed upon by both the insured and insurer and printed accordingly in the insurance policy.
Both parties may also agree that if no notice was made and transmitted to the insurer within the period agreed upon, the right to claim against the insurance for the said loss will be extinguished.
In other words, no claim may be filed against the insurer for the loss.
On the other hand, there are cases when there is no need for a notice of loss, especially when a formal claim has been previously filed during the period of giving notice.
For fire insurance, Philippine insurance laws specifically require the insured to inform or notify the insurer if a loss has been incurred.
The persons entitled to benefit from the insurance, as in the case of a mortgagee, may also notify the insurer of the loss due to fire.
Otherwise, the insured or his beneficiaries may not recover from the loss due to fire.
In terms of the period within which the insured should inform the insurer of the loss suffered, the law is not very strict.
Although there is no exact period provided in the law that needs to be adhered to like the grace period for insurance premium payments, the law provides that the notice of loss, especially in fire insurance, should be communicated in writing to the insurer without unnecessary delay.
But how does one tell whether there was undue or unnecessary delay?
The situation itself, as well as the circumstances, will determine if an undue delay hindered the prompt notification of the loss.
For example, there was no unnecessary delay if the insured has suffered injuries and was confined in a hospital for a long time, which led to late notification of loss.
Another example would be when the ground floor of a house insured against flood due to natural calamities was engulfed with flood, destroying most parts of the house, and the insured together with his family was stranded in the second floor and had no way to communicate to the insurer the distress and loss they experienced.
If the insurance contract expressly contains the term “immediate,” the notice of loss is not expected to be communicated to the insurer right away or immediately after the loss, especially if it is impossible to do so.
Notice of loss should be conveyed to the insurer as soon as circumstances permitted the insured, in due diligence, to do so within a reasonable amount of time.
What is “reasonable” is usually interpreted in favor of the insured.
In terms of providing evidence of the loss to the insurer, preliminary proof of loss is not required to be submitted by the insured unless agreed upon with the insurer.
If agreed to, such evidence needs not be as complex and substantial as those required by the court or a quasi-judicial body like the Insurance Commission.
However, when a claim has been denied and the insured wants to file a case against the insurer, he must prove his cause of action in a more convincing manner, or in legal terms, by preponderance of evidence.
The adequacy of the notice and proof of loss depends on whether the insurer objects or not to the communication, documents or pieces of evidence presented.
If the insurer fails to object and specify any defects which the insured can remedy, such defects are deemed waived and may not be used to invalidate a claim.
Lastly, if there was a delay in the presentation of the notice and proof of loss by the insured, it should not affect its validity if the cause of delay was the insurer, there was no prompt objection on the part of the insurer, or there was an objection but not related to the delayed notice or proof of loss.
The author is the deputy commissioner for legal services of the Insurance Commission. He may be contacted at [email protected]
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