10.2 Insured Duties, Proof of Loss & Insurer Obligations

Duties After Loss

Property policies impose reciprocal responsibilities. The insured must preserve the claim and evidence; the insurer must investigate and decide it fairly under the contract and law.

Prompt notice

Notice should identify the insured, policy if known, loss date and location, cause, damaged property, emergency conditions, and contact information. “Prompt” or “as soon as practicable” depends on circumstances. Do not wait for a complete estimate before reporting.

Late notice can impair inspection and causation evidence. Whether delay defeats coverage depends on wording and law, but prompt reporting is the safe practice.

Protect property

The insured must take reasonable steps to prevent further damage: board openings, shut off water, move vulnerable contents, or arrange emergency drying. Keep receipts and distinguish emergency mitigation from permanent repair.

Safety comes first. Do not enter an unsafe structure. If authorities require demolition, document the order and condition before removal when possible. Preserve samples and photographs so mitigation does not erase proof.

Inventory and inspection

Prepare a detailed inventory of damaged and undamaged property when requested. Include description, quantity, age, condition, ownership, value, and amount claimed. The insurer has contractual rights to inspect property and records. The insured should provide reasonable access and retain copies of submissions.

For business claims, useful records include ledgers, tax returns, sales reports, purchase invoices, leases, payroll, maintenance logs, and prior-loss files. Redact or protect irrelevant confidential material through appropriate channels rather than refusing every request.

Examination under oath

An examination under oath (EUO) is a formal policy investigation tool. The insured answers relevant questions under oath and may be required to produce documents. It differs from a deposition in litigation. A public adjuster can organize facts and attend if allowed, but cannot give legal advice; counsel should handle legal objections and representation.

Proof of loss

A proof of loss can require:

• time and cause;
• insured and other interests;
• policy and other insurance;
• changes in title, use, or occupancy;
• inventory and specifications;
• replacement and actual-cash values;
• amount claimed;
• sworn signature.

Use the deadline in the issued policy or a valid written request. Texas forms can differ; there is no single universal 91-day rule for every property contract. Request a written extension before expiration if documentation reasonably cannot be completed.

Insurer obligations

The insurer should acknowledge, investigate, request necessary information, evaluate coverage and amount, communicate its decision, and pay undisputed covered amounts as required. Texas unfair-claims rules prohibit specified conduct such as misrepresenting policy provisions, failing to attempt fair settlement when liability is reasonably clear, or refusing payment without reasonable investigation, subject to the governing statutes.

An insurer can request additional material when reasonably necessary. A request does not allow endless delay unrelated to the claim. The public adjuster should answer in an indexed package and ask the insurer to identify remaining issues.

Scenario

A pipe bursts in a closed store. The insured reports the next morning, hires extraction, photographs wet stock, preserves samples, and provides sales and purchase records. The insurer inspects and asks for an inventory and proof. This is ordinary cooperation. If the insured discards all stock before inspection and claims unsupported retail prices, proof becomes difficult. If the insurer ignores complete documentation without explanation, claim-practice concerns arise.

Claim log

Maintain date, sender, recipient, request, response, attachment, and next deadline. Confirm phone calls in writing. A clean log demonstrates cooperation and exposes actual delay without exaggeration.

Exam distinction

Insured duties are conditions of the claim; insurer obligations govern handling. Neither side’s imperfect conduct automatically resolves every coverage issue. Analyze the provision, materiality, prejudice, and remedy rather than choosing “claim always void” or “duty never matters.”

Run parallel duty and response timelines

After a loss, the insured commonly must give prompt notice, protect property from further damage, separate damaged from undamaged property, prepare an inventory, cooperate, show the property, provide records, submit to examination under oath when required, and furnish a signed sworn proof if requested. The actual form controls. Document compliance with dates, recipients, and copies rather than relying on memory.

The insurer’s obligations arise from the contract and applicable law: acknowledge or investigate as required, communicate information needs, make coverage decisions, and pay covered amounts according to governing standards. Do not transplant a deadline from one statute or policy into every claim. If information is incomplete, record exactly what is missing and why it matters.

Use two columns in the claim chronology—insured actions and insurer actions. A late proof may raise a condition issue, while an unreasonable or duplicative request may raise a different concern. Continue reasonable mitigation while a coverage dispute develops. Never fabricate a receipt, backdate a document, or alter a photograph. A complete chronology lets counsel or regulators evaluate both sides without confusing disagreement over amount with failure to perform a required duty.