After a major storm, property owners sometimes discover damage but wait months or even years before formally reporting a claim to their insurer. Insurance policies typically require “prompt” notice, and a late report can put coverage at risk.
But losing coverage is not automatic just because notice was late. Florida law generally asks a second question: was the insurance company actually harmed by the delay? And who has to prove that harm can depend on the exact words the insurer chose to put in its own policy.
That distinction — between presuming harm and proving it — was central to a recent decision from Florida’s Second District Court of Appeal, SFR Services, LLC v. American Coastal Insurance Co. The case arose from a condominium association’s Hurricane Irma claim reported roughly 1,053 days after the storm.
Key Takeaway
When an insurance policy says the company has “no duty to provide coverage” only if late notice is prejudicial, the court read that language to require the insurer to prove prejudice rather than presume it.
The question is more specific:
- Was the notice prompt?
- If not, does the insurer have to prove it was harmed, or is harm assumed?
What happened in this case?
Hurricane Irma made landfall in September 2017. A condominium owners association reported storm damage to its insurer nearly three years later, then assigned its policy benefits to a repair company that sued for breach of contract after the insurer did not pay for all claimed damage.
The insurer asked the trial court for summary judgment, arguing the notice was not prompt as a matter of law and that the long delay — along with repairs done before the claim was reported — prejudiced its ability to investigate. The trial court agreed and ruled for the insurer.
Was the notice “prompt”?
The appeals court explained that whether an insured gave timely notice is usually a question for a jury, but a court can decide it when the undisputed evidence points only one way. It also noted that words like “prompt” do not require instant notice; notice becomes necessary when an event should lead a reasonable person to believe a claim would arise.
Here, the record showed displaced and damaged roof tiles and shingles right after the storm, and meeting minutes from two months later noting roof leaks likely caused by wind-driven rain. On those undisputed facts, the court agreed the association did not provide prompt notice.
Who has to prove the insurer was harmed?
Under Florida’s two-step framework, if notice is not prompt, the analysis moves to whether the insurer was prejudiced by the delay. The dispute here was about the burden of proof for that second step.
The policy said the insurer had “no duty to provide coverage” if the failure to comply with listed duties — including prompt notice and cooperation — was prejudicial to the insurer. The court concluded that this language placed the burden on the insurer to prove prejudice and removed any automatic presumption of prejudice for late notice.
Presumption vs. proof
A presumption of prejudice would assume the insurer was harmed and require the policyholder to disprove it. Requiring proof instead means the insurer must come forward with evidence that the delay actually hurt its investigation.
The court reasoned that because prompt notice sat alongside other duties that carry no common-law presumption, all under the same conditional language, the policy treated them the same. Reading a presumption into one duty but not the others, the court said, would improperly rewrite the contract. It certified conflict with a Third District decision that reached the opposite conclusion.
Why did the summary judgment get reversed?
The court found the trial judge had effectively applied a presumption of prejudice and, separately, had improperly weighed the evidence. The policyholder’s engineering expert described inspecting unrepaired roof areas, using weather and pressure data, and ruling out a different later hurricane based on the storm’s angle.
The court explained that judges do not make credibility calls or weigh competing evidence at the summary judgment stage. Because the expert’s opinion rested on personal observation and scientific analysis that was not shown to be unreliable, the court held it created a factual dispute — and even under a presumption, the evidence was enough to overcome it. Prejudice from late notice, the court noted, generally means the insurer lost the chance to investigate the cause and extent of the damage.
What about the late-accepted settlement offer?
Separately, the policyholder tried to accept the insurer’s presuit settlement offer, but only after summary judgment had already been entered against it. The court affirmed the trial court’s decision striking that acceptance, holding that on these facts the acceptance came too late once judgment had been entered.
So the outcome was mixed: the court affirmed the ruling on the settlement offer, reversed the summary judgment on notice and prejudice, and sent the case back for further proceedings.
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