Wade Clark Mulcahy LLP

<span>In the recent case <a href="https://www.wcmlaw.com/wp-content/uploads/2021/08/Farage-v.-Associated-Insurance-Management-Corp..pdf">Farage v. Associated Insurance Management Corp.,</a></span><span> the New York County Supreme Court considered a</span><span> policyholder’s fire insurance claim for a multiunit rental property in Staten Island. </span><span> The policyholder brought suit in August 2020, 6 years from the day the property suffered a major fire loss which cost approximately $1.3 million dollars to restore.  The policyholder did not submit a claim, send an invoice, or otherwise do anything to notify the carrier it sought coverage until 2020.  Plaintiff sued for breach of contract against Tower and AmTrust including bad faith allegations seeking compensatory and punitive damages. The subject insurance policy contain</span><span>ed the typical</span><span> “legal action against us</span><span>” clause which </span><span>stated </span><span>“no one may bring a legal action against us under this insurance unles</span><span>s… the action is brought within two years after the date on which the direct physical loss or damage occurred.</span><span>”  Policyholder clearly violated the 2 year requirement.</span>

<span>Surprisingly, the policyholder alleged the two year time</span><span> period limitation was unenforceable because the property </span><span>could not reasonably be replaced within two years. </span><span>The Court conclusively held for the insurers holding that the plainti</span><span>ff failed to demonstrate sufficiently that she attempted to repair the property within the two years</span><span>, that the policyholder did nothing to protect </span><span>her rights as the suit limitation expire</span><span>d, and that she didn’t satisfy any of the notice requirements of the policy .  </span>

<span> </span><span>Needless to say, the Court’s upholding of the policy language and dismissal of the policyholder’s complaint was in accordance with long held decisions that insurance carriers can set reasonable time limitations within the policy that permit both parties to understand the rights and obligations of each.</span>

<span> </span><span>Should you have any questions, please feel free to contact <a href="mailto:tbracken@wcmlaw.com">Tom Bracken</a>.</span>