Insurance Claims and the Statute of Limitations: What You Should Know

The term “statute of limitations” refers to the official timeframe during which you have the right to file a claim following an incident or discovery of a loss. Failure to comply with these deadlines can result in the forfeiture of that right.

However, multiple limitation periods can affect your claim. Let’s dig into how statutes of limitations function in California and what you can do to ensure your claim is honored on time.

Understanding the Statute of Limitations in California

Two general types of limitation periods apply to California insurance claims. The first type is the deadline to file a claim with your insurer after you’ve experienced a loss. This deadline will vary depending on the type of insurance claim you need to file and your specific policy. Here are some common types:

• Property Damage: For property damage claims, such as those related to real estate or personal property, the statute of limitations is generally three years from the date of the damage.
• Personal Injury: In the case of personal injury claims, claimants have two years from the date of the injury to file a claim.
• Professional Liability: Claims against professionals, such as malpractice claims, typically have a one-year statute of limitations from the date the claimant discovers or reasonably should have discovered the injury.
• Life Insurance: Life insurance claims must generally be filed within three years of the death of the insured, although this can vary based on the terms of the policy.

There are exceptions and special considerations to these general rules, though. In some cases, the statute of limitations doesn’t begin until the claimant discovers (or reasonably should have discovered) the damage or loss. This is particularly relevant in cases where the damage isn’t immediately apparent, such as certain types of medical malpractice or latent property damage.

Furthermore, if an insurer or the party responsible for the damage engages in fraud or conceals important information relevant to the claim, the statute of limitations may be extended. This extension allows the claimant time to file a claim from the date the fraud was discovered or should have been discovered.

Finally, if the claimant is a minor at the time of the incident, many jurisdictions will extend the statute of limitations. Typically, the clock starts running once the minor reaches the age of majority.

Filing an Insurance Claim Correctly

To ensure that a claim is filed correctly and within the statutory timeframe, here’s what to do:

• Prompt Notification: Notify the insurance company as soon as possible after the incident. Delays in notification can lead to disputes over the timeliness of the claim.
• Documentation: Gather and maintain thorough documentation of the damage, injury, or loss. This includes police reports, medical records, repair estimates, and any correspondence with the insurance company.
• Understand Policy Terms: Be familiar with the specific terms and deadlines outlined in the insurance policy. Policies may have particular notification requirements or deadlines different from the statutory limitations.
• Seek Legal Advice: Consult with an insurance attorney, especially in complex cases or when there is a dispute with the insurance company. An attorney can help navigate the legal intricacies and ensure that the claim is filed correctly.
• Monitor Deadlines: Keep track of all relevant deadlines, including the statute of limitations, to ensure that all claims and necessary legal actions are filed on time.

Deadlines for Bad Faith Insurance Claims

The other statute of limitations that can impact an insurance claim is the deadline for filing a bad faith insurance claim. If your insurer denies or underpays your claim or refuses to defend you according to your policy, then it may be acting in bad faith. In that case, you may be able to take legal action against the insurer to hold them accountable for violating your policy.

There are two types of bad faith claims in California, each of which has its own deadline:

• Tort cases have a two-year limitation period that begins on the date you were denied coverage.
• Breach of contract cases have a four-year limitation period from the date of denial of coverage.

It is just as important to file your bad faith claim within the limitation period as it is to file your original insurance claim on time. Failing to do so can prevent you from receiving the compensation you’re owed under your policy and state law.

What to Do If Your Insurer Is Acting in Bad Faith

If you suspect that your insurer is acting in bad faith, it is important to take appropriate steps to protect your rights and interests before your limitation period runs out. Here’s how to respond to this stressful situation:

• Review Your Policy: Carefully review your insurance policy to understand the coverage, limitations, and procedures. This will help you ascertain whether the insurer’s actions may indeed constitute bad faith.
• Document Everything: Keep detailed records of all interactions with the insurance company, including dates of communication, names of representatives you spoke with, and a summary of the conversations. Also, keep all written correspondence, including emails and letters.
• Seek Legal Advice: Consult with an attorney who specializes in insurance law. They can provide guidance on the strength of your case and the best course of action. An attorney can also help you understand your rights under your state’s insurance laws and regulations.
• Take Legal Action: Consider mediation or arbitration as a means to resolve the dispute. Otherwise, if your attorney advises it, you can file a civil lawsuit against the insurer for bad faith.

Legal Help for Complex Insurance Deadline Disputes

Adhering to the statute of limitations in California is essential for the successful filing of an insurance claim. Understanding these timeframes, along with proper preparation and legal advice, can significantly increase the likelihood of a favorable outcome, especially if the deadline for filing your claim is in dispute.

At Oksenendler Law, P.C., we can help you with your insurance problems, especially if your insurer is acting in bad faith. Learn more about how we can help you by scheduling your consultation today.