Insurers Prohibited from Using ‘Late Notice’ to Deny Homeowners’ Claims

Jon Topolewski
By: Jon Topolewski
PublishedJun 14, 2024
3 minute read

Policyholders who missed their homeowner’s insurance company’s filing deadline for a claim may have another shot at coverage.

On March 11, the Colorado Supreme Court’s opinion in Gregory v. Safeco Ins. Co. dealt a blow to insurance companies that have become a little too comfortable denying policyholder claims that are filed late. 

Specifically, the decision demystifies any legal ambiguities around claim filing deadlines for homeowners and insurers. 

The Notice-Prejudice Rule

The notice-prejudice rule adopted by the Colorado Supreme Court in this case asserts that an insurance company can’t deny a homeowner’s first-party, occurrence-based claim just because the homeowner was late to file it. The insurance company must demonstrate that the late notice caused it “prejudice”.

The decision was based on the fact that insurance contracts are often one-sided. More policyholders pay regular premiums and never see a payout than those who pay regular premiums and do. 

In theory, insurance is an industry that exists to help people recover from unfortunate circumstances. However, as I’ve explained before, insurance companies are for-profit businesses that make more money if they don’t have to pay your claim. Thus, claim denials based on a missed deadline have been extra convenient for this multi-trillion-dollar industry. 

Gregory v. Safeco Ins. Co. affirms that it’s unfair for insurers to benefit from an arbitrary technicality that they created in drafting the insurance policy.

A Brief History of Notice Prejudice in Colorado

This isn’t the first time the state’s high court has recognized notice prejudice for the insured. In fact, the Colorado Supreme Court has been trending toward extending consumer protections for insurance policyholders for some time. Notably, since the turn of the century:
  • The Colorado Supreme Court recognized the notice prejudice rule for uninsured motorists’ claims in Clementi v. Nationwide Mutual Fire Insurance Company, 16 P.3d 223 (Colo. 2001)
  • The Colorado Supreme Court extended the rule to apply to commercial general liability insurance through Friedland v. Travelers Indemnity Company, 105 P.3d 639 (Colo. 2005)

Protection for homeowners was the logical next step. 


If an insurance company can prove that the late notice hurt its ability to investigate the claim, or rather, prove prejudice, the homeowner’s claim can still be lawfully denied. 

I can’t think of many circumstances in which an insurance company could claim prejudice if a policyholder misses a filing deadline. I anticipate insurers will attempt to claim the following: 
  1. Loss of Evidence: If a significant amount of time passes before the claim is filed, an insurance company might find evidence of damage harder to verify. 
  2. Increased Repair Costs: Delaying repairs can make problems more expensive in the long run. Take roofs, for example. A small leak left unpatched could quickly devolve into a situation where the entire roof needs to be replaced. 

After all, the purpose of notice requirements is to ensure that insurance companies have enough time to investigate claims before evidence becomes stale. However, the high court’s decision puts the burden of proof on the insurance company to justify decisions not to honor a paying customer’s policy. 

The Gregory Case, A Win For Consumer Protections

Karyn Gregory was one of many homeowners whose roof took a beating in May 2017.  ail stones the size of golf balls pounded the Denver metro area, creating more than $2.3 billion in damage for the state. The event has been reported as Colorado’s costliest and most destructive hail storm ever. 

For Ms. Gregory, it wasn’t until 18 months later that she discovered the damage when she was preparing to sell her home, and a contractor brought the issue to her attention.  Ms. Gregory filed a claim more than five months after her insurance company’s 365-day notice period had expired. The insurance company, Safeco, denied her claim, calling it untimely. 

In response, Ms. Gregory filed a suit for bad faith, breach of insurance contract, and unreasonable denial of payment of her claim in violation of sections 10-3-1115 and 10-3-1116 of Colorado law. Safeco moved for summary judgment, and Karyn moved for a determination of a question of law

The district court and appeals courts both sided with Safeco, but the Colorado Supreme Court reversed the decision, challenging the fairness of insurers denying claims based on a technicality. 

Better Late Than Never

More protections for policyholders is typically a good thing. Insurers won’t be able to deny otherwise legitimate claims for such trivial reasons. Although Colorado is far from the first state to adopt the notice-prejudice rule, I believe the Colorado Supreme Court made the right call. 

Better late than never, right?

Was Your Home Insurance Claim Denied in Bad Faith?

Are you a homeowner who was late to report property damage to your insurance company and subsequently denied the protections stipulated in your policy? The good news is you might have a case. Give us a call at 303-688-0944 and get a start on your case assessment now. 

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