Jennifer Pratts v. State Farm & Casualty Company

A federal court in Pennsylvania finds the date of loss is an objective fact and reaffirms the loss date has nothing to do with insureds’ state of mind.

“General State Authority is illustrative of Pennsylvania law on this issue.  In that case, the insureds purchased an insurance policy that covered a building.  The policy contained a limitations period that required that suit be brought within twelve months from the inception of the loss.  Gen. State Auth., 346 A.2d at 267.  The insureds’ building burned down on January 2, 1969.  The insureds did not learn of the destruction of the building, however, until more than two years later on May 10, 1971. Id.  It argued that the limitations period should be computed from the date it first became aware of the loss. Id. at 268. The court disagreed. It reasoned that the policy’s limitation period ran from the “inception of the loss” which has nothing to do with the state of mind of the insured. Id. The loss occurs whether or not the insured knows of it. Id. The date of the loss is an objective fact, and the limitations period is triggered by that date. Id.”