Court allows insurer to deny payment because owner didn't file formal proof of loss in 60 days
James Durall's home in Flint burned to the ground. When the adjuster inspected it the day after the fire, it was "in the basement" with only a chimney standing. By law, the insurer, Home-Owners, a division of Auto Owners, was obligated to provide Durall with a Proof Of Loss form withinn 30 days of the fire. By contract with Auto Owners, Durall was then obligated to return the formal proof of loss within 60 days. AutoOwners denied Durall's claim and refused to pay for the insurance he purchased because he was late filing the Proof of Loss.
The trial court upheld Home Owners' refusal to pay, and Durall appealed. He argued that he never received the statutory notice of the required proof of loss. He also pointed out that other mail sent by Home Owners to him in the month after the mail was returned to the insurer's mail room as "undeliverable"--not much of a surprise since his mail box was attached to the house and now in the charred embers of the basement.Durall also pointed out that he had provided the insurer with more than twenty pages of itemized inventory, a 28-page recorded interview under oath, complete access to his banking and employment records, and the substantial equivalent of the Proof of Loss. Unfortunately, Durall drew Judges Henry Saad and Kirsten Kelly and had zero chance of prevailing even before he filed his arguments. They upheld the dismissal of his claim. The dissenting judge pointed out that they were elevating the insured's contractual obligation to file a Proof of Loss above the insurer's statutory duty to provide the notice. The dissenter also noted that the insurer did not even provide any form of proof that it had actually mailed the required notice: the majority concluded that it did from the mere fact of the allegation, without requiring proof.