You’ve had a house fire, been sued, or were in a car crash. You have insurance that should cover that loss. But you’ve been dealing with your insurer for a couple of years, and they aren’t paying everything they should. Is it too late to sue them?

The simple answer is no, you can always sue your insurer. The real question to ask is, is it too late to sue successfully? There are two main reasons it might be too late: statutes of limitation and so-called “suit limitation” provisions.

Statutes of limitation are statutes – laws – that require you to sue within a certain period of time. There are different statutes in every state, and different time limits for different causes of action. Generally, statutes of limitations tend to be longer when they apply to causes of action based on things that are written down. So for instance, in Indiana the limit for actions based on written contracts is ten years (Ind. Code § 34-11-4-11), while the limit for most tort actions, such as slip and falls or car crashes, is two years (Ind. Code § 34-11-2-4).

Some insurance policies also have what are called suit limitation provisions. These provisions act as the contractual equivalent of a statute of limitation. An example of one from a commercial property policy is:

LEGAL ACTION AGAINST US

No one may bring legal action against us under this Coverage Part unless:

1.   There has been full compliance with all of the terms of this Coverage Part; and

2.   The action is brought within 2 years after the date on which the direct physical loss or damage occurred.

So how do you know if it’s too late to sue successfully? Well, as with all legal questions, the answer is it depends. Here, what it depends on is the policy language, the applicable statute of limitation (because different kinds of cases have different limitation periods), and the facts of the case.

First, statutes of limitation. As noted above, there is a 10-year statute of limitation that applies to all claims arising out of a written contract, Ind. Code § 34-11-4-11, and that’s the one that applies to insurance policies if there isn’t an applicable suit limitation provision. State Farm Fire & Cas. Co. v. Riddell Nat’l Bank, 984 N.E.2d 655, 659 (Ind. Ct. App. 2013).

The precise statutory language is important. Section 34-11-4-11 says that a suit against an insurer “must be commenced within ten (10) years after the cause of action accrues.” A lot of liability claims arise from harms that began decades ago. For instance, an asbestos claim might arise from exposure that began in the 1970s or before, even though suit might not be brought until 2025. But a dispute over insurance coverage for an asbestos claim is not the same thing as an asbestos claim. If you’re trying to decide whether to bring suit against your insurer, it’s because of a dispute over coverage. The relevant question isn’t when the underlying harm happened, the relevant question is when your cause of action against your insurer accrued. In Strauser v. Westfield Ins. Co., 827 N.E.2d 1181, 1185 (Ind. Ct. App. 2005), the Indiana Court of Appeals held that a claim against a liability insurer accrued when the liability insurer denied coverage.

Suit limitation provisions are most common in property policies (though they can be found in liability policies and all kinds of other policies as well). Most such provisions, like the one quoted above, say you have to bring suit within 2 years of the damage occurring. But there are nuances here. First, sometimes the provisions have a different time limit than 2 years. In Riddle, the policy had a 1-year suit limitation provision. That provision conflicted with another statute, Indiana Code § 27-1-13-17, which says that an insurance policy “may not be issued, renewed, or delivered to any person in Indiana if the policy limits a policyholder’s right to bring an action against an insurer to a period of less than two (2) years from the date of loss.” The insurer in Riddle recognized that the 1-year suit limitation provision couldn’t apply, andargued that a 2-year limit should apply as the default. The court rejected that argument. It held that the default limitation for any contract – of insurance or anything else – was the 10-year statutory limitation in Ind. Code § 34-11-4-11. Since the 1-year suit limitation provision didn’t apply, the policy was read as if it had no suit limitation provision, and the 10-year default statutory limitation applied.

Sometimes a suit limitation provision won’t specify a number of years, but instead will be dependent on a statute of limitation. In Napier v. Am. Fam. Mut. Ins. Co., 179 N.E.3d 504 (Ind. Ct. App. 2021), the suit limitation provision for uninsured motorists coverage said, “We may not be sued under the Uninsured Motorist coverage on any claim that is barred by the tort statute of limitations.” The policyholder had sued more than 4 years after crashes with uninsured motorists. The policyholder argued that, since there is a 6-year statute of limitations applicable to fraud claims, and since fraud claims are a kind of tort claim, the 6-year statute should apply. The Court disagreed, since the statute applicable to car crashes is 2 years, and uninsured motorist coverage is coverage for car crashes.

Finally, it’s relatively easy for an insurer to waive a suit limitation provision. Indiana’s Supreme Court has said that suit limitation provisions, while valid, are “not a favorite of the law.” Huff v. Travelers Indem. Co., 363 N.E.2d 985, 991 (Ind. 1977). The test is “whether anything has been done in the relationship between the insurer and the insured which would cause the insured to reasonably believe the limitation period will not be insisted upon.” This is usually a fact question, which means a jury has to decide it. In Huff, the jury decided there had been waiver when the insurer requested further information about a loss after the limitation period had passed. 363 N.E.2d at 992. In another case, the Indiana Court of Appeals held that the purpose of suit limitation provisions is to “protect insurers from policy holders who voice no claim until the year has long since expired, promote early notification while evidence is available, and provide carriers with a basis for forming business judgments concerning claim reserves and premium rates.” Dunaway v. Allstate Ins. Co., 813 N.E.2d 376, 380 (Ind. Ct. App. 2004), quoting Summers v. Auto-Owners Ins. Co., 719 N.E.2d 412, 414-15 (Ind. Ct. App. 1999).

So, if you’ve been diligently working with your insurer, but haven’t been able to resolve the claim within the suit limitation period, you may nonetheless be successful in bringing a claim. But the insurer doesn’t have to tell you they’re going to rely on the suit limitation provision. Summers, 719 N.E.2d at 416-17.

Me and my colleagues at Plews Shadley Racher & Braun LLP would be happy to discuss your case with you if you have concerns about a statute of limitation or a suit limitation provision (or anything else related to insurance coverage). This is a complex area of law that affects policyholders from homeowners and motorists to multi-million dollar corporations, and we’ve handled cases on every rung of that ladder. We’d be happy to look at your case and will do everything to help you if we can.  

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