Have you suffered loss or damage but only reported it to your insurer after some time? A late notification of loss is one of the most common reasons for insurers to deny a claim. Many policyholders are not fully aware of the strict deadlines set out in the policy terms and conditions. When you are confronted with a denial, this can have major financial consequences. However, it is important to know that an insurer may not simply penalize every late notification with a complete refusal of coverage.
In this article we discuss the legal framework around the duty to notify (meldingsplicht), the consequences of a late notification, and the steps you can take if your insurer refuses to pay out. We explain what your rights are and how a specialized attorney can assist you in proceedings against your insurer.
What exactly does the duty to notify entail?
When you take out insurance, you enter into an agreement with the insurer. Part of this agreement is the statutory and contractual duty to notify. This means that you are obliged to report a loss event to the insurer as soon as possible.
The exact period for this is usually stated in the general terms and conditions of your policy. Some insurers apply a period of a few days. Others apply fourteen days or even a month. The purpose of this duty to notify is to enable the insurer to investigate the loss in a timely manner.
The sooner the insurer is informed, the better it can establish the cause and circumstances of the loss and limit further loss. If you exceed this period, we speak of a late notification of loss. This can hinder the insurer in its investigation and is often used to reject the claim in whole or in part. Therefore act immediately and inform your insurer, even if you do not yet have all details or evidence to hand. A preliminary notification is often sufficient to comply with the deadline.
The statutory framework regarding a late notification of loss
The legislature has laid down specific rules regarding the duty to notify in insurance in the Dutch Civil Code (Burgerlijk Wetboek, “BW”) (Article 7:941). Under the law, the policyholder must report the occurrence of the insured risk (the loss) to the insurer as soon as is reasonably possible. What is “reasonably possible” depends on the specific circumstances of the case.
For example, if you are seriously injured in hospital after an accident, you cannot be expected to call the insurer immediately. In such cases, a late notification of loss is often excusable.
The law further provides that an insurer may not refuse coverage solely because the notification was made too late. The insurer must demonstrate that the delay has prejudiced its reasonable interests. This means the insurer must prove that, due to the late notification, it can no longer properly investigate the loss or that the loss has worsened due to the delay. Only if the insurer can show this may it reduce the payment or, in the extreme case, refuse it. This affords important protection for you as the insured.
When is an insurer prejudiced in its interests?
As noted, an insurer may only reject a claim due to a late notification of loss if its reasonable interests have been prejudiced. In practice, this means that because of the delay the insurer can no longer conduct a proper investigation into the cause or the extent of the loss.
Suppose your car is stolen and you do not report it until a month later. The insurer has then missed the opportunity to secure traces immediately after the theft or to hear witnesses. In that case, the insurer is clearly prejudiced in its interests.
Another example is water damage in your home. If you report this only weeks later and the damage has meanwhile worsened significantly due to mold growth, the insurer may argue that it could have limited the loss if you had reported earlier. In such situations the insurer will not indemnify the additional loss that arose due to the delay.
However, if the late notification has had no effect whatsoever on the investigation or the extent of the loss, the insurer may not simply reject the claim. It is for the insurer to specify concretely and to prove that and how its interests have been prejudiced.
Consequences of failing to comply with the duty to notify
The consequences of a late notification of loss can vary, depending on the extent to which the insurer has been prejudiced. In the most favorable case for the insurer, it may decide to reject the claim in full. This usually occurs when, due to the delay, the insurer can no longer establish the cause and circumstances of the loss at all. Another possible consequence is a partial rejection of the claim. This arises where the insurer can demonstrate that the loss has worsened due to the delay. The insurer will then only indemnify the part of the loss that would also have arisen if the notification had been made in time.
In addition, in exceptional cases a late notification can lead the insurer to accuse you of fraud, for example if it suspects that you have used the delay to manipulate evidence or distort the circumstances. If you are accused of fraud, this can lead to fraud investigation by the insurer and possibly an entry in the incidents register. This has far-reaching consequences for your ability to take out insurance in the future, and can even result in a listing with Stichting CIS.
Exceptions: when is reporting late permissible?
Although the main rule is that you must report loss in a timely manner, there are various exceptions in which a late notification of loss may not be held against you. The law and case law take special circumstances into account. A common exception is force majeure (overmacht). If, due to physical or psychological force majeure, such as a serious accident, a hospital admission or severe trauma, you were not able to report the loss in time, the insurer may not refuse the claim. You must, of course, be able to substantiate this force majeure, for example with medical statements.
Another exception is lack of knowledge of the loss. It may occur that you only discover later that loss has occurred. Think, for example, of hidden defects or a slowly developing leak. In that case the period for the duty to notify only starts to run at the moment you actually became aware of the loss.
Finally, lack of knowledge of the coverage can play a role. Sometimes people only later realize that a particular event falls under the coverage of their policy. Although insurers are often strict about this, in specific cases it can be a valid reason for a delayed notification.
The burden of proof in a dispute about the duty to notify
In a dispute about a late notification of loss, the allocation of the burden of proof is a crucial element. In principle, the burden of proof that the loss was reported in time lies with you, the insured. You must be able to demonstrate that you made the notification within the stipulated period or as soon as was reasonably possible. You can do this by means of a confirmation email, an acknowledgment of receipt from the insurer, or witness statements.
If it is established that the notification was made too late, the burden of proof shifts to the insurer. The insurer must then demonstrate that the delay has prejudiced its reasonable interests. As we saw earlier, the insurer must specify concretely what investigation it has missed or how the loss has worsened.
If the insurer cannot prove this, you in principle retain your right to payment. It is therefore of great importance that you do not simply accept a rejection on the grounds of a late notification. A specialized attorney can scrutinize the insurer’s arguments and assess whether it has in fact met its burden of proof.
What can you do if your claim has been rejected?
If your insurer rejects your claim due to a late notification of loss, it is important not to lose heart immediately. There are various steps you can take to challenge this decision. First of all, it is advisable to formally lodge an objection with the insurer. In your notice of objection you can set out your arguments. Explain why, in your view, the notification was not late, or why you believe the insurer has not been prejudiced in its interests. Be sure to enclose all your supporting documents, such as medical statements, photos and correspondence.
If the insurer maintains its position, you can consider filing a complaint with the Financial Services Complaints Institute (Kifid). Kifid offers a low-threshold procedure to resolve disputes between consumers and financial service providers. Do pay attention to the deadlines for filing a complaint with Kifid.
Should the procedure at Kifid also not lead to the desired result, or if your case is not suitable for Kifid, then going to court is an option. You can then initiate civil proceedings before the district court. In all cases it is strongly recommended that you be assisted by an experienced insurance law attorney who understands the complex subject matter and can optimally defend your interests.
Frequently asked questions
What is the statutory period for reporting loss?
There is no fixed statutory period in days. The law provides that you must report the loss “as soon as is reasonably possible.” What is reasonable depends on the circumstances. Your policy terms and conditions often do state a specific period, such as 14 days or a month. It is important to respect this period as far as possible to avoid disputes.
May the insurer reject my claim in full in case of a late notification?
No, the insurer may not reject your claim solely because the notification was made too late. The insurer must demonstrate that the delay has prejudiced its reasonable interests. Only if the insurer can prove this may it reduce the payment or, if it has been very seriously prejudiced, refuse it in full.
What if illness meant I could not report the loss in time?
If, due to force majeure, such as a serious illness or hospital admission, you were not able to report the loss in time, this is a valid exception. You will need to substantiate this force majeure, for example with a doctor’s statement. In that case the insurer may not use the late notification against you to reject the claim.
Read also
- When may an insurer refuse to pay out?
- Rejection of loss by the insurer – what can you do?
- Filing a complaint with Kifid – your rights, step-by-step plan and tips
Need help?
Has your insurer rejected your claim due to a late notification of loss and do you disagree? The specialized attorneys of Arslan & Arslan Advocaten are ready to assess your case and assist you in the dispute with your insurer. We have extensive experience in successfully challenging rejections. Contact us for a free initial consultation via our contact page and discover what we can do for you.