§ 36.2 Notice

• Library: Insurance Law in Oregon (OSBar) (2020 Ed.)

§ 36.2 NOTICE

§ 36.2-1 Generally

The insured must comply with the notice provisions contained in the insurance policy. Oregon law states that an insured bears the burden to establish conditions affording coverage, including the burden to show that the insured provided timely notice of damage. Ass'n of Unit Owners of Nestani v. State Farm Fire & Cas. Co., 670 F Supp 2d 1156, 1159, 1161 (D Or 2009), aff'd, 434 F App'x 579 (9th Cir 2011). The purpose of requiring the insured to give the insurer timely notice is to allow the insurer time to adequately investigate the potential claim and thus to protect itself and the insured. Lusch v. Aetna Cas. & Sur. Co., 272 Or 593, 597, 538 P2d 902 (1975); Sutton v. Fire Ins. Exch., 265 Or 322, 325, 509 P2d 418 (1973) ("The sole purpose of notice of loss is 'to enable the insurer to take proper action to protect its interest.'" (quoting John Alan Appleman & Jean Appleman, 5A Appleman on Insurance Law and Practice § 3481, at 428 (rev 1970))).

Virtually all insurance policies contain provisions for notice of loss. "'Notice of loss' is the more or less formal notice given an insurance company by insured or claimant under the policy of the occurrence of the loss insured against." 46A CJS Insurance § 1761, Westlaw (database updated Dec 2019).

In Oregon, ORS chapters 742 (property and casualty insurance) and 743 (health and life insurance) mandate that certain types of insurance policies contain provisions requiring notice of loss.

Fire insurance policies must contain a provision requiring immediate written notice to the company. ORS 742.230.

Individual health insurance policies must require written notice of a claim within 20 days after the occurrence or commencement of the loss, "or as soon thereafter as is reasonably possible." ORS 743.423(1). If the policy contains a loss-of-time benefit that may be payable for two years or more, the insurer may require written notice every six months, excluding the six months after the filing of proof of claim or the denial of liability by the insurer. ORS 743.423(2). A delay in filing a claim under this provision does not preclude the right of the insured to indemnity for the six-month period preceding the actual giving of notice. ORS 743.423(2).

Life insurance policies provide that payment of a claim will be made only on receipt of "due proof" of the death and of the interest of the claimant. ORS 743.192(1).

Group or blanket health insurance policies must contain a notice provision not less favorable than those for individual health insurance. ORS 743.537; see ORS 743.423(1).

Credit life and health insurance policies require that the claim be promptly reported to the insurer or the insurer's designated claim representative. ORS 743.380(1).

The casualty insurance notice requirement is incorporated into the definition of a hit-and-run vehicle. ORS 742.504(2)(b).

Although notice of loss and proof of loss are distinct requirements under the terms of many insurance policies, the Oregon Supreme Court seems to have combined the two concepts for the purpose of determining whether a policy-holder is entitled to recover attorney fees under ORS 742.061. In Dockins v. State Farm Ins. Co., 329 Or 20, 28, 985 P2d 796 (1999) (discussed in § 36.3-1), the court cited "notice of loss" language from Sutton, 265 Or at 325, in support of its analysis of the statute's "proof of loss" requirements.

PRACTICE TIP: When an insurer fails to resolve a claim (or to make a qualifying tender) within six months of submission of the proof of loss, the policyholder may recover attorney fees incurred in litigation. ORS 742.061. Under Dockins, 265 Or at 27, the insured need not wait until six months after providing notice and proof of loss to file the lawsuit because the filing of the lawsuit itself can satisfy the statute's proof-of-loss requirement and trigger the six-month claim-resolution period. Cases arising under ORS 742.061 and its predecessors take a pragmatic and functional, as opposed to strict and formalistic, approach in defining the term proof of loss. As explained by the Oregon Supreme Court:

[Proof of loss] refers to any "event or submission" that accomplishes the purpose of a proof of loss, that is, "to afford the insurer an adequate opportunity for investigation, to prevent fraud and imposition upon it, and to enable it to form an intelligent estimate of its rights and liabilities before it is obliged to pay." [Dockins, 329 Or at 28-29.] This court has emphasized that insurers "operate under a duty of inquiry." Parks v. Farmers Ins. Co., 347 Or 374, 381, 227 P3d 1127 (2009). If a submission, by itself, is ambiguous or insufficient to allow the insurer to estimate its obligations, it nevertheless will be deemed sufficient if it provides enough information to allow the insurer "to investigate and clarify uncertain claims." [Dockins, 329 Or at 29.]

Zimmerman v. Allstate Prop. & Cas. Ins. Co., 354 Or 271, 311 P3d 497 (2013); see also Hall v. Speer, 267 Or App 639, 641, 343 P3d 640 (2014). Note, however, that the policy's actual proof-of-loss requirements are likely to differ.

§ 36.2-2 Form of Notice

"In the absence of statutory or policy requirements, no particular form of notice is necessary." 46A CJS Insurance § 1777, Westlaw (database updated Dec 2019); see Parks v. Farmers Ins. Co. of Oregon, 347 Or 374, 376, 227 P3d 1127 (2009) (in the context of proof of loss under ORS 742.061, a phone call to the insurance...