Alabama Court Finds that Insured’s Claim is Barred by Late Notice


In American Western Home Ins. Co. v. Reese, 2011 U.S. Dist. LEXIS 122805 (October 20, 2011), the U.S. District Court for the Southern District of Alabama held that coverage for a Hurricane Katrina damage claim was barred by the insured's untimely notice.

American Western Home Insurance Company issued a commercial property policy to Crest Motel for the policy period January 13, 2005 to January 13, 2006. On August 29, 2005, the motel sustained damage as a result of high winds during Hurricane Katrina. Crest made a claim to American Western, and American Western paid Crest $25,081 in November 2005. Over four years later, on October 7, 2009, Crest sent a proof of loss to American Western claiming $274,463.38 in additional damages purportedly caused by the hurricane.

American Western filed a complaint for a declaratory judgment, contending that the supplemental claim was not covered due to the insured's late notice. The court agreed and granted American Western's motion for summary judgment.

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