§ 3.5 Insured's Obligation to Give Notice of Claim and Cooperate

• Library: Insurance Bad Faith: A Primer on the Law in South Carolina (SCBar) (2022 Ed.)

§ 3.5 Insured's Obligation to Give Notice of Claim and Cooperate

While the insurer has a duty to investigate reasonably, the insured has a duty to give timely notice of a claim and cooperate with the insurer's investigation.⁴² If the insured's failure to give notice or cooperate causes prejudice to the insurer, then the insurer may deny coverage without being liable for bad faith.⁴³

In Shiftlet v. Allstate, the insured had submitted a claim for homeowner's coverage after a house fire. The insured refused to give the insurer access to certain financial records, and refused to complete an examination under oath (EUO), which was authorized by the terms of the insurance policy. The District Court held that the refusal to cooperate gave the insurer an...