The one-year or two-year deadlines to file an insurance claim in court can be extended, or tolled, by mutual agreement. The deadlines can also be waived. This article describes instances when an insurance company’s conduct waives the deadline to start a lawsuit arising from an insurance claim.
Let’s first start with the concepts behind a waiver. Minnesota law treats insurance policies as contracts. All the rights a party enjoys to a contract can be waived, or “let go”. That only happens when a party is fully aware of its rights and explicitly acts to waive those rights. If I have a contract with a vendor, and I am to pay the vendor within 15 days of invoicing, the vendor has a legal right enforce the 15-day deadline or waive it. Parties to a contract can always choose to “let go” of their rights.
These principles apply to the statute of limitations. The statute of limitations are provisions within an insurance policy. I have quoted one such a provision in this blog post. An insurance company has the right to enforce this provision, and it has the right to waive it, just like any provision in a contract.
Proving an insurance company has waived the statute of limitations provision in its insurance policy is not easy. That is why I advise clients to first obtain an extension, or toll, the statute of limitations. Yet waivers do occur. Minnesota courts look very closely at the conduct of the insurance company in the weeks before the statute of limitations expires to find a waiver.
Conduct that may be a waiver could include a promise to inspect the property after the statute of limitations expires, the promise to send an adjustment after the deadline expires, or appraisal of the scope of loss. If such promises are made without any reservation of the right to enforce the statute of limitations clause a property owner may be able to establish a waiver in court. Yet large, sophisticated insurance companies regularly send letters that reserve all rights under the policy. That will likely be interpreted to include the right to enforce the statute of limitations. Property owners trying to establish a waiver will need e-mails or statements from the insurer assuring the property owner the claim will continue after the deadline expires, with no qualification or reservation.
Clients will often ask me about conduct that shows an intent to continue the claim which occurs after the statute of limitations expires, That conduct has limited value. The case law in Minnesota squarely focuses on what happens before the statute of limitations expires because only then can a party knowingly relinquish a contractual right. While I would disagree with that understanding of the law there is authority for it. Property owners need to focus on what the insurer says or writes before the deadline expires.
The value I see in something an insurer wrote after the deadline expires is that it can be used to show what the insurance company was thinking before the deadline expired. For example, if an insurer verbally said the claim will continue one week before the statute of limitations expired, and then wrote an e-mail to that effect one week after the deadline expired, the e-mail can be used to show the insurer’s intent one week before.
Contract me if you need help assessing a possible waiver by an insurer of the statute of limitations at ed@beckmannlawfirm.com.
Ed