In Minnesota, for property damage claims involving fire, hail, wind, and other similar types of damage, to recover for the damage or loss, a suit or action must be brought within two years from when the damage or date of loss occurs (unless your policy states a different deadline). This is called the statute of limitations. The statute of limitations is the time frame set by legislation where affected parties need to take action to enforce rights or seek redress after injury or damage. Just submitting or reporting an insurance claim for property damage is not enough to meet the statute of limitations requirement. A lawsuit must be filed if the claim is not resolved within two years from the date of the property damages/loss or any claims are no longer valid. Property owners and homeowners’ associations with pending insurance claims must understand the ramifications of allowing a statute of limitations to run, without taking any action.
If you are in a position where you may be close to settling your claim with the insurance company, or there is an ongoing dispute with the insurance company about the cost of repairs or scope of damage to the property, action must be taken to preserve your rights prior to the expiration of the statute of limitations. The best option to preserve your rights is requesting the insurer enter into a tolling agreement. A tolling agreement is an agreement between a potential plaintiff (a property owner or homeowner association) and a potential defendant (an insurance company) by which the defendant agrees to extend the statutory limitations period for the plaintiff’s claim so that both parties will have more time to resolve their dispute without litigation. In many cases, insurance adjusters may be aware of the upcoming statute of limitations deadlines and may not be taking immediate action to resolve a claim. If the statute of limitations runs out, the insurer is not responsible for any additional action or payment on the claim, if payment has not already been made, or an agreement entered into. It is critical for property owners and homeowners’ associations with insurance claims to take action prior to the expiration of the statute of limitations to preserve their rights. If the insurance company is not willing to enter into a tolling agreement, then a lawsuit must be commenced prior to the expiration of the statute of limitations.
A tolling agreement is a good option as it provides an alternative to having to incur the time and expense of a lawsuit to preserve your rights. While insurers do not have to agree to toll or pause the statute of limitations for your claim, it is always worthwhile to see if they are agreeable. To make it convenient for the insurer, a draft should be provided to the insurer which may make them more agreeable. This also provides a framework for the agreement that can then be modified if any changes are requested.
The attorneys at Greenstein Sellers are experienced in representing property owners and homeowner associations in disputes with their insurance companies and regularly assist with negotiating claims, preparing tolling agreements, and commencing legal action to protect our clients’ rights. If you have any questions about a property insurance claim, please contact our office. Time may be of the essence.