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

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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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