SW Legal studies in Business

Insurer Need Not Make Payments When Insured Parties Fail to Cooperate

Court held that when a home owner refuses to cooperate with the homeowner’s insurance company in an investigation of a house likely burned by arson, the insurer has no duty to pay benefits due to a breach of contract, which requires cooperation under oath.

Topic Insurance
Key Words

Homeowner; Breach of Contract; Loss; Fire; Cooperation

C A S E   S U M M A R Y

The Miles’ home, insured by Great Northern, was substantially damaged by a fire. Miles was in bankruptcy. Authorities determined that the fire was intentionally set. Mr. Miles left home shortly before the fire was set and there was no sign of forced entry. While Miles was a “person of interest,” no charges were filed against him. Great Northern would be liable under the policy unless the Miles set the fire. Miles told Great Northern that various people wanted “to destroy” him, but he would not provide the names. Mrs. Miles, relying on advice of her husband, an attorney, refused to answer questions posed to her by Great Northern. A sworn proof of loss had to be provided within 60 days, but the Miles did not provide it for five months. Great Northern denied the claim because the Miles had not cooperated in the investigation and had filed the proof of loss beyond the due date. The Miles then said they would cooperate more in providing information requested. Great Northern then agreed to pay the $800,000 mortgage on the house and paid the Miles $250,000 for living expenses, but denied a request for about $800,000 for lost personal property. Miles sued for breach of contract and other claims. Great Northern sued the Miles for unjust enrichment and breach of contract for failure to follow procedures required by the policy. Parties moved for summary judgment.


The motion by the Miles is denied. When an insurer investigates a claim of loss, the insured has a duty to cooperate by submitting to an examination under oath and producing documents relevant to the claimed loss. The insurer reasonably determined that the insureds had breached their duty to cooperate with the investigation into the fire. Great Northern was not obligated to reconsider claims made after the 60 day proof of loss period when the Miles decided to produce some documents. Correcting the breach of the duty to cooperate came after the required period.

Citation Miles v. Great Northern Insurance Co., ---F.Supp.2d--- (2009 WL 2998529, D. Mass., 2009)

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