If You Must Sue Us on Your Property Claim, You Must Do So Within ____ Years After the Loss

 Quiz time.

Question:

New York law permits property insurers to require that any suits brought against the insurer to recover for any property claims submitted under a property insurance policy must be commenced within how many years after the loss?

Answer:

TWO YEARS for losses caused by the peril of fire 🔥.
ONE YEAR (or less) for losses caused by perils other than fire, like 💨, 💧, ❄, or 💥. 

Be honest.  You didn't know that, did you?  

But indeed, the New York courts have repeatedly and consistently held that although the NY Standard Fire Policy, codified by New York Insurance Law § 3404(e), provides that... 

...[n]o suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, and unless commenced within twenty-four months next after inception of the loss,...

...that 24-month period is the minimum for only fire-caused losses.  Why?  Because § 3404(f)(1) provides that 

[s]ubject to the approval of the superintendent, a policy which insures solely against the peril of fire or which insures against the peril of fire in combination with other kinds of insurance either for a divisible or indivisible premium need not comply with the provisions of subsection (e) of this section, provided: (A) the policy contains, with respect to the peril of fire, terms and provisions no less favorable to the insured than those contained in the standard fire policy[.]

See?  So if a policy covering property in New York contains a "Suit Against Us" condition that provides for a shorter period--say, 12 months (one year)--that condition may still be enforced for nonfire losses without violating § 3404(e).  

Don't believe me?  Here's some New York case law that should convince you:

• Barbarovich v. Tower Group, Inc., 2014 NY Slip Op 32708 (Sup. Ct., Kings Co., 2014) (“The policy expressly limits the statute of limitations to one year. Although the standard fire policy in Insurance Law 3404(e) contains a statute of limitation of two years, that limitation applies only to fire insurance claims. The plaintiffs claim for recovery is based on damage caused by wind and rain. Since the policy at issue is a multi-peril policy and the claim is not based on fire damage, the one year statute of limitation is applicable.”)


• Dockweiler v. Allstate Ins. Co., 222 AD 2d 482 (2nd Dept. 1995)(“ Moreover, because the policy in question was a multiperil policy, it could have contained a shorter limitation period which might have been enforceable against nonfire loss claims [see, Insurance Law § 3404 (f)(1)]")


• Bargaintown D. C. v Bellefonte Ins. Co., 78 AD2d 206 (1st Dept. 1980), affd 54 N.Y.2d 700 (1981)(the statutorily mandated two-year limitations period for fire losses, contained in  subdivision (e) section 3404 of the Insurance Law, did not preclude the inclusion in the policy of a shorter limitations period for nonfire losses).

Yesterday I wrote up a coverage analysis and opinion for a client on first- and third-party claims stemming from a longstanding leak of home heating oil from an above-ground storage tank located in the basement of the insured rental dwelling located in upstate New York (aka anything north of the George Washington Bridge or what once was known as the Tappan Zee Bridge and is now known as the Governor Mario M. Cuomo Bridge if you grew up "downstate").  

The landlord's package policy in that matter included an endorsement that contained the following suit condition:

Suit Against Us

No suit to recover for any property claim may be brought against us unless: 

a. the terms of this policy have been fully complied with; and, 

b. the suit is commenced within 1 year after the loss. 

If any law of the state where the premises described in the Declarations are located makes this limitation invalid, then suit must begin within the shortest period permitted by the law.

No laws of New York State make make a limitations period of one year invalid for nonfire losses.  I provided the case law to my client (because it didn't believe me either at first), and it kept the one-year limitations period in the declination letter, quoted as is.