Pitfalls for the Unwary Policyholder - The Dreaded Suit Limitation

Suit Limitation

Sometimes the policyholder is forced to file a lawsuit against the insurance company to obtain the benefits due under the policy. Most homeowners policies contain a provision requiring the policyholder to file suit within one year. In most states that 360 day period begins to run from the date of the loss, not the date of the denial or other wrongful conduct by the insurer. Failure to timely file suit is an absolute bar to coverage. Therefore, you must pay close attention this deadline and request an extension of time to file suit if time is running out. The Gorilla recommends that you add this very important date to your calendar at the outset of your loss.

White Waiver

In all states, when a policyholder is forced to sue its insurance company to obtain the benefits due under the policy, the law allows the jury to punish the insurer for its wrongful conduct known as “bad faith” by awarding damages to the policyholder in excess of the policy benefits. In many, many instances the bad faith damages far exceed the policy benefits. This is the hammer held by policyholders against insurer wrongful conduct in making low ball settlement offers to resolve the insured’s claim. Insurance companies will often ask the policyholder to sign a so-called “White Waiver” without explaining to the insured the consequences of the waiver. Adopted by insurance companies after a famous California case finding the insurer in bad faith for making a low-ball settlement offer, the insurance industry introduced the White Waiver to make low ball settlement offers without fear of that conduct being used as evidence against the insurers in a bad faith suit.

Before signing a White Waiver, the Gorilla recommends that you fully understand the consequences of so doing. It is not a right you should give up lightly.