In the preceding posting, I wrote about making sure you comply with your property insurance policy’s post-loss policy obligations.  By failing to comply, you can render your policy ineffective meaning you are forfeiting otherwise valid insurance coverage, which was the situation discussed in the preceding posting.  As an insured, you should never want this to occur!

In another case, discussed here, the property insurance policy had a preferred contractor endorsement.  This means that instead of paying the insured insurance proceeds, the insurer could perform the repairs with its preferred contractor.   Typically, the insured will pay a discount on their premium for this preferred contractor endorsement.  The insurer elected to move forward with the repairs based on the preferred contractor endorsement but the insured performed the repairs on his own and then sold the house.  By doing this, the appellate court held the insured rendered his policy ineffective by breaching his own policy (and failing to allow this post-loss obligation to take place).  The explicit terms of the policy allowed the insurer to perform the repairs instead of paying the insured insurance proceeds.  The court could NOT rewrite the post-loss obligations in the policy by requiring the insurer to pay insurance proceeds when the insurer, per the preferred contractor endorsement, elected to perform the repairs.

Your insurance policy is a contract and will be treated as a contract.  Please make decisions with this in mind and consult counsel before taking positions that may be violative of your own contract and render your policy ineffective.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.