Continuing with our discussion regarding late notice and prejudice defenses asserted by insurers, when is a re-opened hurricane claim a “supplemental claim?” This issue often presents itself in the context of a demand for appraisal by the policyholder on a re-opened hurricane claim. Insurance carriers treat the re-opened claim as a “supplemental claim” because a certain amount of time has passed since its claim determination. What would the time criteria for a “supplemental claim” be: one month; one year; two years; three years; four years? The issue of time is not a factor in the test of whether a re-opened claim is in fact “supplemental.”
While there is not a Florida case directly on point with regard to what exactly is a “supplemental claim,” cases from other states shed some light on this issue. A “supplemental claim” is for new or additional damages not previously disclosed or adjusted in an insurance claim. See D.C. Concrete Mgmt, Inc. v. Mid-Century Ins. Co., 39 P.3d 1205 (Colo. App. 2001) (the initial claim was for theft of several items from a job site; while the supplemental claim was for new damage for lost profits never before claimed); Rossmanith v. Union Ins. Co. of Providence, 2001 WL 1451050 (Iowa App. 2001) (the initial claim was related to exterior and interior damage from a hailstorm; while the supplemental claim involved mold damages never before mentioned); Basuro v. 21st Century Ins. Co., 108 Cal. App. 4th 110, 114 (Cal. App. 2d Dist. 2003) (the initial claim was for damage related to the Northridge earthquake in 1994; there were supplemental claims for subsequent roof problems, asbestos damage and cracks in the foundation and moisture damage to the wood floors).
Most insurance policies do not mention or define “supplemental claim.” The question often arises in situations where the insurance carrier is simply attempting to mischaracterize the parties’ disagreement over the amount of loss as a “supplemental claim” in an effort to delay the resolution of the claim, particularly when the insurance carrier has already reached its claim determination and issued payment previously.
If the re-open claim seeks new damages never before claimed, then it may in fact be a “supplemental claim.” That situation is distinguishable from the situation where there is a re-open of a hurricane claim involving roof damage that was not adequately addressed initially or in which there could now be a simple disagreement over the amount of loss. This becomes important: Is the issue one concerning coverage for the loss or is it simply a disagreement over the amount of loss? For help in answering these fact specific questions, consult coverage counsel.