The failure to properly notify the insurance company presents a classic example of the need for sound legal advice. The typical insurance policy has a notice provision. The contract requires the insured individual or insured company to give timely notice of a claim. From the perspective of an insurance company, notice is important. Early investigation gives the adjuster the chance to find out the facts. The passage of time can be harmful to a claim. Not to mention, the insurance company needs to know about losses to set reserves and make suitable financial decisions.
For some, the questions seems quite simple. The insurance policy is a written contract. If the insurance policy says failure to properly notify the insurance company is a defense, then prompt notice should be given. If notice is not timely made, then there’s no coverage. The breach of the contract doesn’t always terminate the coverage. For example, let’s say the notice is one day late? The argument that failure to properly notify the insurance company should not end in denial of coverage carries some degree of logic. If you’re one day late on your mortgage payment, you don’t expect the loan will be called due. Having to pay the entire loan balance in full the next day would mean scrambling for a new loan. It really would seem unfair to lose the house over a payment one day late. You aren’t going to get a new loan overnight.
The issue of timing as a defense to coverage is all or nothing. If late notice is a complete defense, then the insurance policy...
