13.7 Suit Against the Company

• Library: Insurance Law in Virginia (Virginia CLE) (2020 Ed.)

13.7 SUIT AGAINST THE COMPANY

13.701 Statutory Requirement. Section 38.2-2105(A) provides that

[e]xcept as provided in [section] 38.2-2107, each policy shall contain the following provisions, conditions, stipulations, and agreements:

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Suit. No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, and unless commenced within two years next after inception of the loss. ³⁶⁷

This two-year contractual limitation period for fire insurance policies is more generous to insureds than the one-year contractual limitation period authorized for insurance policies in general. ³⁶⁸

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Section 38.2-2107 permits an insurer to issue a simplified and readable policy of insurance that deviates in language from that required by section 38.2-2105 "if the deviating policy form is . . . in no respect less favorable to the insured than the standard policy form, and . . . approved by the [State Corporation] Commission prior to issuance." Coker v. State Farm Fire & Casualty Co. ³⁶⁹ involved a homeowners policy that contained a limitation provision deviating from the standard policy form. The provision stated that "[n]o action shall be brought unless there has been compliance with the policy provisions. The action must be started within two years after the date of the loss or damage." The insured argued that this language created additional rights for her, in that there could be two different accrual dates for causes of actions. She argued that her loss occurred on the date of the fire, but that her damage occurred later when State Farm denied her claims for additional payments. The court rejected this argument and ruled that the terms "loss" and "damage" are used interchangeably throughout the policy and have the same meaning.

13.702 Relationship to the Loss Payable Provision. In Ramsey v. Home Insurance Co., ³⁷⁰ the insured argued that the policy limitation period ³⁷¹ did not begin to run until 60 days after the proof of loss was received by the insurer, because the paragraph immediately preceding the limitation provision stated that the amount due by the insurer was not payable until the 60 days had expired. The Virginia Supreme Court rejected the argument and held that the policy limitation period began to run from the date of loss. The court stated that

[t]he limitation involved in the present case is not in the language of the insurance company. It is in the language of the General Assembly and expressed in words which the statute requires to be inserted in the policy, word for word, line for line, number for number. It says in plain, unambiguous words that no suit shall be sustainable unless it is commenced within twelve months next after the inception of the loss. It was enacted by the General Assembly after this court had twice said that time should be counted from the date of the fire. To employ the language of the Bowers

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case, if the legislature had intended to change the rule as thus laid down, it is reasonable to suppose that it would have done so in some clearer and plainer manner than by the inference which the insured here seeks to draw. ³⁷²

Where a fire insurance policy provides that a loss shall be payable 60 days after receipt by the insurer of a proof of loss and that an action on the policy must be commenced within the limitation period, failure to file the proof of loss until within 60 days of the...