Where an insurance company is estopped by reason of the conduct of its agents to insist upon a strict compliance with the terms of a policy respecting notice of loss, the rights of the insured are to be considered as if such formalities had been duly observed. The holder of a fire insurance policy who has given due notice of a loss may sue upon the contract at any time within six years after his cause of action accrued, unless the insurers have notified him of their adjustment of the loss and that suit must be begun within six months.
YOUNG, J.
It is the purpose of chapter 170, Public Statutes, to do away with some of the abuses peculiar to the insurance business, and it is the office of section 6 of that chapter to compel the insured to notify insurers of a loss in time to enable them to investigate its cause. As this duty is imposed on the insured for the benefit of insurers, they not only may waive compliance with it, but may estop themselves to set up the insured's failure to comply with it as a defence to an action on the policy (Levi v. Insurance Co., 75 N.H. 551, 553), and that is what the superior court has found they did in this case. As there is evidence to warrant this finding, the case stands just as it would if the plaintiff had notified the defendants of the loss in accordance with the terms of the policy.
It was therefore the defendants' duty to adjust the loss within a reasonable time after the fire occurred. As they failed to perform that duty, this action was seasonably begun; for the only way in which insurers can limit the time within which an action may be begun is by adjusting the loss (P. S., c. 170, s. 7) and notifying the insured at the time they inform him of the amount at which the loss is adjusted that unless he begins suit within six months his right of action will be barred. P. S., c. 170, s. 11. In other words, unless the insurers adjust the loss and notify the insured of the adjustment and that he must begin his action within six months, the only limitation on his right to sue is the six years' statute of limitations. Section 10 of chapter 170 merely limits the time within which the insured must begin an action to recover more than the amount of the adjustment; but he can recover the amount at which the loss is adjusted at any time within six years unless the insurers notify him to the contrary when they inform him of the adjustment (s. 11). In short, neither section 10 nor section 11 applies; and the provision of the policy limiting the right of the insured to bring an action thereon to one year after the loss occurs is void. P. S., c. 170, s. 18.
Judgment for the plaintiff.
All concurred.