A Video Explaining the Private Limitation of Action Provision of a First Party Property Policy

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The phrase, “inception of the loss” in the standard fire insurance policy has been interpreted to mean the occurrence of the casualty or event insured against must, if a claim is denied, a suit must be filed within one or two years of the date of the inception of the loss. The law is clear that in most situations the limitation period will be enforced.

The Sixth Circuit held that a one-year limitations period after the inception of loss or damage in an insurance contract did not conflict with Kentucky law and was reasonable. [Smith v. Allstate Ins. Co., 403 F.3d 401, 402-04 (6th Cir. 2005); Miller v. Seneca Specialty Ins. Co. (W.D. Ky., 2019)]

The inception of loss means “the time when the loss was first incurred or began to accrue.” [Tucker v. State Farm Mut. Auto Ins., 2002 UT 54, ¶¶ 13-14, 53 P.3d 947].

An insured’s belated discovery of potential coverage is irrelevant to the inception of loss date. [Abari v. State Farm Fire & Casualty Co. 205 Cal.App.3d 530, 535 Cal. Rptr. 565 (Ct. App. 1988)]

ZALMA OPINION

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Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders.

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He is available at http://www.zalma.com and [email protected]. Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award. Over the last 53 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.