When Does the Time Limitation Period Begin To Run For A Lawsuit Against My Homeowners Insurance Company?

In a recent decision,¹ a federal court interpreting Pennsylvania law held that the discovery rule does not apply in insurance actions and the statute of limitations for an insured to bring suit against their insurance company begins to run on the date of loss and not the date the insured becomes aware of the loss.

In that case, after a pipe burst at a vacant property at an unknown time, the insured submitted a claim to their insurer. The insurance policy contained a contractual provision that shortened the statutory four-year limitations period for contract actions in Pennsylvania to “one year after the date of loss or damage.”² Dissatisfied with the insurance company’s handling of her claim, the insured filed suit against her insurance company exactly one year from the date she discovered the burst pipe and extensive damage to her property. Thus, according to the insured, the date of loss (and the start of the one-year limitation period) was the day she discovered the water damage at her property.

The court disagreed, ruling that the “date of loss” is an objective fact and does not refer to the insured or whether they had knowledge of the damage. Ultimately, the court found that the insured’s lawsuit was not timely filed because the evidence of record, including a water bill for 134,000 gallons of water used at the property in the cycle the month prior, confirmed that the “date of loss” was before the date the insured became aware of the water damage at her property. Consequently, the insured’s action was dismissed for failure to file suit within the limitation period in the insurance policy.

If you are unsure as to the limitation period to bring suit for your property damage claim, contact an experienced insurance professional to answer questions regarding your claim.
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¹Pratts v. State Farm Fire & Cas. Co., No. 3:16-CV-2385, 2019 WL 1952875 (M.D. Pa. May 2, 2019).
² Such contractual provisions shortening the period for an insured to file an action are permissible and enforceable under Pennsylvania law.