This whole course has examined what the insured must prove, notify and preserve. There remains the side one rarely looks at: what the insurer owes, and within what time. A construction loss has a feature that makes this question urgent rather than theoretical. The works wait, the schedule runs, the contractors invoice their standing time, and each week of argument costs more than the one before. A fair settlement obtained after three years is not the same product as a fair settlement obtained in four months, and the difference is not one of comfort, it is quantifiable.
The first observation is that in ordinary property insurance the insurer is bound by no general statutory deadline to take a position or to pay. It must perform in good faith, it must reply, but the pace of the adjustment is not fixed by a text as it is in certain special regimes. The module on pre-financing structural defects described precisely one of those special regimes, with its deadlines for position and offer sanctioned as of right, and the contrast is instructive: where the legislature wanted a timetable, it wrote one and attached an automatic sanction to it. Elsewhere, the timetable is negotiated or litigated.
What the law does impose everywhere, by contrast, is the duty to perform the contract in good faith, and it is not decorative. An insurer that multiplies requests for documents already supplied, that leaves an expert report unanswered for months, that disputes without reasons, or that raises late a point it knew from the start, breaches that duty. The difficulty is that each of those behaviors, taken alone, looks like normal adjustment: it is their accumulation that characterizes them, and an accumulation is only demonstrated with a written record, which presupposes having built it as one went.
Two levers exist to turn that diffuse duty into concrete effect, and they work differently. A formal demand starts default interest running, which puts a cost on passing time and changes the value of silence for whoever is silent. An interim payment, obtained in summary proceedings, secures without waiting for the merits what is not seriously disputable, and it is worth applying for precisely because most files contain an undisputed share that the argument over the rest holds hostage. Both moves are procedural, they are made early, and they presuppose having given up the idea that claiming harms the relationship.
A structural imbalance that good faith does not correct must be named. The insurer has time, a dedicated department, lawyers and a low cost of capital. The insured, on a damaged site, has contractors to pay, a contractual schedule, sometimes penalties running, and cash tightening precisely because the loss occurred. Time does not cost the two parties the same, and that asymmetry is a parameter of the negotiation, not an accident. It explains why a settlement at seventy percent offered in the eighth month is frequently accepted when it would have been refused in the second, with nothing in the file having changed in between.
Joint expert determination, and the arbitration some policies provide for, are the mechanisms meant to unblock technical disagreements, and they call for careful reading. Going to a third-party expert costs time and money, and its opinion, depending on the wording, binds the parties or does not. A clause making the opinion binding closes the argument but removes the possibility of reopening it before a judge; a clause leaving it advisory keeps that possibility but brings no certainty. The choice is made at placement, on an imaginary loss, by people who do not imagine ever being on the wrong side of the disagreement.
The operational reading lies in a documentary discipline that costs nothing and is set up on day one. Date and number every submission and every request, which makes the accumulation demonstrable. Answer requests for documents fast and completely, which removes the most convenient argument. Quantify, from the outset, the share of the file that is not seriously disputable, since that is what founds an application for an interim payment. And write down, once, what each month of delay actually costs the project, in standing time, penalties and financing charges. That last figure changes the nature of the conversation, because it makes visible the cost the asymmetry of time was making one party alone carry.
A partial collapse occurs on March 3 on an insured site, damage estimated at 11 million euros. The insured notifies on March 6 and sends the preliminary expert report on April 28. The insurer requests further documents on May 19, then again on July 4, half of which were already in the April submission, then on September 20 disputes the application of a design defect exclusion which the April preliminary report already discussed. No dispute has ever touched 4.3 million corresponding to structural damage, whose accidental origin is not argued. The site is idle, the contractors invoice 210,000 euros a month, and the project owner bears 90,000 euros a month of penalties toward its operator. On November 12, the insurer offers 7.4 million in full settlement. What should be done?
One must first see what eight months cost, because that figure is written nowhere: 210,000 plus 90,000 makes 300,000 euros a month, that is 2.4 million by November 12, against the 3.6 million the settlement gives up. The cost of time is two thirds of the concession being asked for, and it is carried entirely by one of the two parties. That is what makes the November offer acceptable when the same offer in May would have been refused: it is not the file that moved, it is the position of the party waiting. Two errors are to be avoided in responding. The first is to plead bad faith as a whole: each behavior taken alone looks like normal adjustment, and it is their accumulation that characterizes them, so the July 4 request for documents already supplied and above all the September 20 dispute on a point known since April are worth dating and lining up rather than denouncing globally. The second is to wait for the merits. The 4.3 million of structural damage is not seriously disputable, so it is exactly the object of an application for an interim payment in summary proceedings, and a formal demand starts interest running on that share. The non-obvious point is that those two moves are not primarily about collecting: they remove the asymmetry of time that underpins the offer at sixty-seven percent, and they remove it without having decided anything about the design defect.
- 01Outside special regimes, no general statutory deadline binds the insurer: where the legislature wanted a timetable, it wrote and sanctioned one, as for pre-financing structural defects.
- 02Good faith is not decorative, but each behavior taken alone looks like normal adjustment: it is the accumulation that characterizes, and it is only demonstrated with a dated record built as one goes.
- 03Two procedural levers, early: a formal demand puts a cost on passing time, an interim payment in summary proceedings frees the not seriously disputable share that the argument over the rest holds hostage.
- 04Time does not cost the two parties the same, and that asymmetry is a parameter of the negotiation: an offer at seventy percent refused in the second month is accepted in the eighth with nothing in the file having moved.
- 05Quantifying once what a month of delay costs the project changes the nature of the conversation: it makes visible a cost the asymmetry was making one party alone carry.