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Simple English definitions for legal terms
notice-prejudice rule
Read a random definition: negligent entrustment
A quick definition of notice-prejudice rule:
The notice-prejudice rule is a rule that says an insurance company cannot deny a claim just because the person who has the insurance policy did not tell them about the claim right away. The insurance company can only deny the claim if they can prove that they were harmed by not being told about the claim sooner.
A more thorough explanation:
The notice-prejudice rule is a legal principle that prevents an insurance company from denying a claim based on late notice from the insured, unless the insurer can prove that it was harmed by the delay.
For example, let's say that a homeowner's insurance policy requires the insured to report any damage to the property within 30 days of the incident. If the insured fails to report the damage until 60 days later, the insurance company may try to deny the claim based on the late notice. However, if the insured can show that the delay did not harm the insurer's ability to investigate the claim or assess the damage, the notice-prejudice rule would prevent the denial.
The notice-prejudice rule is designed to protect insureds from losing coverage due to innocent mistakes or unforeseen circumstances that prevent them from reporting a claim in a timely manner. It also encourages insurers to promptly investigate claims and assess damages, rather than relying on technicalities to deny coverage.