Reviving Stale Insurance Claims When the Contractual and Statutory Limitations Periods Have Run: If You Snooze, Do You Always Lose?


A plaintiff must bring a cause of action within the statutorily prescribed limitations period, which begins to run once the cause of action has accrued. Cal. CCP § 312; Norgart v. Upjohn Co., 21 Cal. 4th 383, 389 (1999). Thus, the failure to file suit within the applicable statute of limitations is an affirmative defense to stale claims, regardless of their merits. Norgart, supra, 21 Cal. 4th at 396; State Farm Fire & Cas. Co. v. Superior Court (Bolek), 210 Cal. App. 3d 604, 612 (1989).

In cases arising from the denial of insurance claims, California courts have recognized a narrow exception to this rule where the insured establishes that the insurer either neglected to advise the insured of any applicable contractual limitations periods on which the insurer relies to deny the claim, or affirmatively misled the insured as to his or her time to file suit. In those instances, the insurer may be equitably estopped from asserting that the action is timebarred. This article discusses the bases for this estoppel theory in first-party cases and the limited application of select insurance regulations (10 CCR §§ 2695.4(a) and 2695.7(f)) supporting it.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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