What Must be Done after Notice of a Claim is Received by the Insurer

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A first party property policy does not insure property: it insures a person, partnership, corporation or other entity against the risk of loss of the property. Before an insured can make a claim for indemnity under a policy of first party property insurance the insured must prove that there was damage to property the risk of loss of which was insured by the policy. The obligation imposed on the insured by the policy is often relatively easy to fulfill.

For example, in the case of a fire the charred building need only be shown to the insurer. Other situations may not be as easy to prove. Is a building overhanging a newly created cliff damaged? Has a church that is permeated with a gasoline odor sustained property damage? Was missing property stolen? Has a building showing signs it may collapse, subject to an insured peril called “collapse?”

Often, an insurer needs the wisdom of Solomon to reach a correct and fair result. The first party property adjuster is charged with the duty of helping the insured establish the existence or nonexistence of property damage due to a risk of loss insured against and not excluded and work to keep all of the promises made by the insurance policy.

When a first party property policy insures against the risk of physical loss to certain real or personal property, whether the policy is a named peril, all risk, special risk, or direct risk of physical loss policy, the insured must first prove there is damage to the property. An insured may also make claim for loss of use of the property that is the subject of the insurance.

The insured’s initial burden is to prove coverage. The burden then shifts to the insurer to prove the application of an exclusion to deny coverage. If it meets that burden, the burden shifts back to the insured to prove an exception to an exclusion. Insureds attempt to invoke the ensuing loss exception.

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Adapted from my book, Zalma on Insurance Claims, Part 104 Available as a paperback and Available as a Kindle Book

BARRY ZALMA:

The author: Barry Zalma, Esq., CFE, Consultant, Barry Zalma, Inc., 4441 Sepulveda Boulevard, CULVER CITY CA 90230-4847. 310-390-4455, [email protected], http://www.zalma.com, http://zalma.com/blog

(c) 2026 Barry Zalma & ClaimSchool, Inc.

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