Insurance companies may have found a new way to eliminate a part of all property owner insurance claims. Most insurance policies contain a stated deadline to complete repairs in order to fully recover the insurance policy benefits. Often half or more of the total insurance claim recovery depends on meeting the deadline to complete repairs. This deadline is usually set at one year or two years from the date of Loss.
Historically, when a property owner and insurance company dispute what repairs are necessary to restore damaged property, the insurance company will provide a fair amount of time to complete repairs after the dispute over which repairs to make is resolved. However, State Farm has recently taken the position that an insured disputing what repairs to make does not extend the deadline to complete repairs. Accordingly, property owners can lose recovery rights while they are in the process of disputing and establishing the proper repairs to make. According to State Farm, their two-year repair completion deadline applies even if the property owner proves that State Farm provided for the wrong repairs for the entire two-year period following the Loss!
The Minnesota District Courts have gone both ways on this issue, some holding that properly and successfully disputing what repairs to make extends the deadline to make the repairs, while other courts have held that the repair completion deadline applies regardless of the dispute over what repairs to make.
This issue will affect all property owners in Minnesota. Property owners cannot proceed with repairs when the proper repairs to make and how much insurance will ultimately pay for repairs are unknown. Accordingly, if State Farm’s new application of the repair completion deadline stands, insureds will need to resolve the disputed scope of repairs through either litigation or the appraisal process (if available), such that they will still have time to complete the repairs within the policy deadline. This is likely impossible to meet in many situations, especially if appraisal is not available or if the repair completion deadline is one year from the date of Loss.
There are multiple cases up at the Court of Appeals on this issue. I will be arguing this issue before the Court of Appeals on May 14, 2026. The Court of Appeals will likely make rulings on this issue in July or August.
Check in with Hellmuth & Johnson’s Thought Leadership page for updates about this issue. Contact Anthony Remick at aremick@hjlawfirm.com for more information.
