Insurance Company Will Have to Explain its Delay Tactics

Employers Mutual Casualty Company Unlawfully Delays Property Insurance Claim in DisputeOn May 16, 2010, a hailstorm struck the Oklahoma City area and damaged several commercial properties that were all owned by the same policyholder. His insurance company, Employers Mutual Casualty Company, or EMCC, inspected all the damage to the properties and estimated that it would cost him nearly $800,000 to repair all the damage from the hailstorm. As is common, however, EMCC paid less than half that amount and promised to pay the rest if and when the policyholder completed the repairs and submitted documentation proving how much he spent.

The policyholder did just that. He completed the repairs and submitted documentation of how much it cost. EMCC, however, was suspicious. EMCC wanted to re-inspect the properties and demanded more documentation. The policyholder cooperated, and he even submitted to an examination under oath by EMCC’s lawyers. But EMCC kept withholding payment and requesting more and more documentation. For a while at least. The policyholder’s insurance policy, like many policies, contained a provision requiring him to sue, if ever, within two years after the hailstorm. In this case, the second anniversary of the hailstorm was May 16, 2012. Once that date passed, EMCC refused to consider any more documents the policyholder submitted and refused to issue any further payments. EMCC told him in no uncertain terms that it was too late. With his back against the wall, the policyholder filed suit. EMCC asked the court to dismiss the lawsuit on the basis that it was filed too late because more than two years had passed since the hailstorm. The court denied EMCC’s request and held that “EMCC cannot through repeated inspections, document requests and/or continued negotiations delay action against it and then plead the delay it caused as an affirmative defense.” In other words, insurance companies cannot string their policyholders along, promising payment just as soon as the policyholder submits the magic document, then deny payment because too much time has passed. If your insurance claim has been denied on the basis that you waited too long or the claims handling process took too long, you should talk to a lawyer. You may still be entitled to benefits or damages under your policy.