The Eighth Circuit Court of Appeals ruled that a reasonable jury could find that an insurer breached its policy in Wood v. Foremost Ins. Co., No.06-1904, 2006 WL 3802168 (8th Cir. Dec. 28, 2006).

 

Douglas and Caroline Wood's roof was damaged by a tornado. They immediately filed a claim with their homeowners insurer, Foremost. The Woods claimed they promptly forwarded a roofing company estimate to Foremost, who refused it. Foremost alleged it did not receive an estimate until about six months after the loss, but the Woods said they submitted the same estimate three times following the first refusal.

 

Foremost inspected the property a few times and made several payments to the Woods over a period of eight months. Mr. Wood injured himself whiling putting a tarp on the unrepaired roof when snow was forecasted more than six months following the loss.

 

The Foremost policy promises, “We will make settlement within 30 days after we receive an acceptable proof of loss from you and the amount of loss is determined as provided in the policy.” “Acceptable proof of loss” is not a defined term in the policy, and the court said the lack of a definition makes this provision ambiguous as to when payment is due.

 

The court said that it assumed the insurer received the first estimate the Woods sent, ruled that the ambiguity regarding “acceptable proof of loss” was resolved against Foremost, and decided that “a reasonable jury could find that Foremost was obligated to settle within 30 days [after the receipt of the first estimate], which did not happen.” The court also concluded, “A reasonable jury could find that Foremost breached the policy.”

 

The lower court's grant of summary judgment for Foremost was reversed.