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A proof of loss requirement is valid and may be considered as a condition precedent to recovery. However, this technical policy requirement may be waived by the insurer either directly or through the acts of its agents.
The owners' brought an action against the insurer to recover on a fire insurance contract covering the owners' motel. The owners alleged that the adjuster was negligent. The insurer argued that the owners failed to file a timely proof of loss. The owners argued that the adjuster extended the time. The adjuster persuaded the owners to sign a non-waiver. Two months later, the adjuster accused them of not complying with the policy in substantiating the losses and presented a settlement offer that the owners refused. The adjuster gave the owners a letter with a blank proof of loss form and told them that he was extending the proof of loss. The district court granted a judgment in favor of the owners.
Under the facts and circumstances of this case, is the insurer deemed to have waived the proof of loss requirement?
The court affirmed the judgment against the insurer and reversed the judgment against the adjuster. There was no evidence of the adjuster's negligence. However, the owners were justified in relying on the adjuster's apparent authority to extend the proof of loss deadline. He obtained the owners' signatures on the non-waiver, took a statement about the fire, and explained the procedures to recover. He supplied the owners with inventory sheets and instructions to itemize the damaged property. The owners testified that, in their experience, an adjuster had always filled out a proof of loss, and the adjuster candidly admitted that the adjuster usually filled out the proof of loss with customers of the motel.