Jonathan Bukowski | Property Insurance Coverage Law Blog | October 16, 2018
During the recent Summer 2018 RMAPIA Conference, Larry Bache and I had an opportunity to discuss regulations and remedies available to first party policyholders within the RMAPIA states. Continuing that discussion, this post will review the legal remedies available to Idaho policyholders enduring the frustration of a delayed or denied insurance claim. Fortunately, Idaho provides several remedies to assist policyholders in their efforts to recover insurance benefits due and owing under an insurance policy.
The typical scenario often involves the submission of an insurance claim following a destructive hail or wind storm. Despite gladly accepting premiums for the property, suddenly the insurance carrier refuses to provide benefits for repair of damaged property, forcing its insured to choose between accepting the denial or filing legal action for breach of the insurance contract. Idaho requires that a policyholder file its action for breach of contract within five years of the date of loss,1 and unlike several surrounding jurisdictions such as Wyoming and Colorado, Idaho does not allow an insurance carrier to shorten the five-year statute of limitation period.2
Idaho also provides the ability for policyholders to recover attorney fees in a lawsuit where a proof of loss is submitted and an insurer fails to pay the claim within thirty days.3 This is an important remedy where too often a policyholder cannot afford to the repair of the property, let alone the payment of attorney fees and costs to recover benefits due and owing under the policy.
While Idaho provides its policyholders with a potential recourse related to an insurance carrier’s mishandling of the claim, a policyholder must overcome several hurdles to prevail, including:
- demonstration that the insurance carrier intentionally and unreasonably denied payment;
- demonstration that the claim was not fairly debatable;
- demonstration that the denial was not the result of a good faith mistake; AND
- demonstration that the harm was not fully compensable by contract damages.
Finally, Idaho allows a policyholder to bring a claim for punitive damages where an insurance carrier has acted egregiously in the handling of the claim. While the claim cannot be made in the initial lawsuit, it can be asserted in a pretrial motion to amend where the policyholder can establish a reasonable likelihood of proving facts at trial sufficient to support an award of punitive damages.4 A policyholder must demonstrate by clear and convincing evidence, oppressive, fraudulent, wanton, malicious, or outrageous conduct of the insurance carrier in the handling of the claim.
If your Idaho property damage claim has been improperly denied or unreasonably delayed, consider speaking to an attorney experienced in handling property insurance claims to discuss the details of your claim and options available under the law.
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1 I.C. § 5–216.
2 I.C. § 29-110.
3 I.C. § 41-1839.
4 I.C. § 6–1604(2).