An insurer’s decision to deny coverage for claims that are not promptly made, will be upheld unless there is strong, affirmative evidence that the delay resulted in no prejudice.

In Intracoastal Condo. Ass’n v. Lexington Ins. Co., 2015 U.S. App. LEXIS 293, the plaintiff condominium association filed a claim seeking $6,208,910 in damages against its insurer for damage sustained to its property by Hurricane Wilma. The plaintiff did not immediately file a claim with its insurer after Hurricane Wilma because the plaintiff believed the damage sustained to the property would not exceed the policy’s $100,0,000 deductible. However, the plaintiff discovered extensive damage four years and seven months after Hurricane Wilma and counsel for the plaintiff sent formal notice of its loss to the insurer. The insurer denied the claim for failure to provide prompt notice of the damage as required by the policy. The district court granted the defendant’s summary judgement finding that the plaintiff notice was not prompt as a matter of law. Finally, the district court concluded that the plaintiff had not rebutted the presumption of prejudice arising out of its late notice.

The plaintiff appealed and the Court of Appeals affirmed the district court’s decision finding that there is no dispute of fact that the plaintiff failed to give timely notice of its loss. The Court rejected the plaintiff’s claim that their mistaken belief that the damages did not exceed the deductible, excused their failure to provide timely notice to the insurer. The Court explained that this breach of the duty of notice results in a rebuttable presumption of prejudice to the insurer. The only information the plaintiff proffered to rebut the presumption of prejudice is that both parties’ experts gave opinions as to the causation. The Court held this was not enough to create a genuine issue of material fact to preclude the summary judgment. The Court stated the ability to offer testimony as to causation alone does not satisfy the purpose of prompt notice and therefore cannot vitiate the prejudice suffered by the insurer due to delayed investigation and mitigation.