If you’re dealing with an insurance claim, you may encounter terms like “First Notice of Loss,” “FNOL,” or just “Notice of Loss.” These terms all mean the same thing: the date when an insurance company first learns about a potential claim. This date is incredibly important. In fact, as we’ll see below, a First Notice of Loss is one of the most important milestones in the entire lifecycle of an insurance claim.
Given the importance of FNOL, we wanted to write an article that covers everything that policyholders and professionals should know about the topic. We start with the basics, then dive deeper into why FNOL matters, especially for policyholders and other insureds. We also take a look at the distinction between FNOL and “making” or “filing” a claim. We wrap it up by offering a few best practices for giving notice to an insurance company and starting your claim.
If you’re looking for more on practical tips and best practices, we strongly encourage you to read Scott’s post, Three Essential Moves When Filing Your Property Insurance Claim. With that, let’s get started.
What is a First Notice of Loss?
A First Notice of Loss (sometimes abbreviated as FNOL) is a term of art in the insurance industry that indicates the date when an insurance company or its agent first learns about a loss, injury, or other event that could trigger coverage obligations under one of its insurance policies.
From the perspective of an insurance company, the First Notice of Loss is more of an administrative description than anything else — it’s a date and time that’s recorded in its claim file as when it first received notice of a potential claim. The event marks the beginning of the claim and starts the claims process. Under this view, the only thing that matters is what’s in the claim file.
While the insurer’s perspective on FNOL is important to understand, it’s also incomplete in two important ways. First, sometimes the claim file is wrong. Insurance companies are subject to statutory and common-law duties to keep accurate records related to a claim. But mistakes and miscommunications happen. And unless you have proof to the contrary, the date that’s marked in the claim file as FNOL will be the definitive FNOL date for your claim regardless of when you actually gave notice. This is why it’s so important to take control of your claim and follow-up in writing to confirm when the First Notice of Loss occurred.
Second, the insurer’s process-oriented perspective on FNOL doesn’t squarely address the issue of whether the insured/policyholder has fulfilled its contractual obligation of providing notice. Every insurance policy requires an insured to immediately or promptly notify the insurer when a covered loss or occurrence happens. Until the insured fulfills this obligation, the insurer doesn’t have to lift a finger on the claim. The legal requirement of prompt notice is therefore integral to FNOL.
For these reasons, we think insureds and policyholders should think about FNOL slightly differently than the way an insurance company thinks about it. For insureds and policyholders, a First Notice of Loss is the date that you can prove is when you gave the insurer prompt notice of a claim as required by your insurance policy.
This definition helps you focus on the two essential components of FNOL: (1) fulfilling your policy’s prompt notice obligation and (2) creating an unchallengeable record of when that notice occurred. With this playbook in hand, we can examine best practices for giving your first notice of loss.
Best Practices for Giving First Notice of Loss
Filing a claim isn’t complicated. As we laid out above, the two big imperatives are moving quickly to notify the insurance company per your insurance policy and creating a water-tight record of when that notice happened.
Still, we want to highlight a few pro tips and pointers that will help your claim move faster and more smoothly. For the definitive guide on how to file a claim, we recommend our companion piece, Three Essential Moves When Filing Your Property Insurance Claim.
Give Notice ASAP
Virtually every insurance policy, no matter the type, contains a provision requiring an insured to give prompt or immediate notice of an event that might trigger coverage under the policy. In a homeowners or other property insurance policy, this requirement is one of the policyholder’s contractual duties after a loss to your insured property.
The actual language of the notice requirement will vary from policy to policy, but it’s typically short and sweet. For instance, in one standard homeowners policy (HO 00 03 05 11), the requirement is simply that the policyholder (or someone acting on behalf of the policyholder) “Give prompt notice to us or our agent.” Other policies may use the word “immediate” or similar words to convey the urgency of the notice.
What counts as “prompt” depends on the circumstances of the loss. For instance, if a hurricane forced you to evacuate your home, you may not be able to know whether your home suffered damage until days after the storm passes. The nature of the damage is also relevant. You might have a valid excuse for giving late notice for hidden or latent damages that you would not have if the damages were open and obvious.
General Rule of Thumb: Give Your FNOL ASAP, and At Least 30 Days from the Date of Loss
While it’s true that what counts as “prompt” or “immediate” notice will depend on the specific circumstances of the loss, that kind of case-by-case analysis is mushy and unhelpful as guidance for most policyholders. To make the concept of prompt notice more concrete and actionable, our general rule of thumb is that unless you’re certain your deductible will exceed your losses, you should notify your insurer about a loss as soon as possible and in no event later than 30 days from the date of loss.
If your losses are so small that they won’t exceed your deductible, and there’s no reason to think they could get bigger later (think hidden water damage), then you probably don’t want to file a claim, which means skipping FNOL altogether. And if it’s unclear whether your losses will exceed your deductible, you might take a few days to learn more about the scope of damages. But in all other cases, you should notify your insurer to start your claim ASAP!
This is a general rule, so exceptions may apply, but it’s a useful starting point when you’re thinking about giving notice to your insurer about a claim.
Don’t Wait to Gather all the Details
The types of events that lead to insurance claims are stressful and riddled with unknowns. Amidst this uncertainty, it’s very natural to want to wait until you have all the relevant information about the loss before filing a claim. Don’t. For starters, it might take months or even years until you can uncover the full facts on the nature of your loss. In addition, you’re not required to know or provide these details to your insurer in your first notice of loss. All the insurer needs is some basic understanding of the nature of the loss. Was it a fire? A theft? A hurricane? An accident? And what was damaged — your home? your car? you? A short and sweet statement that provides these essential bits of information, even if incomplete, is all you need to do to satisfy your policy’s prompt notice obligation and start the claim. There will almost certainly be follow-up to fill in the details — inspections, questions, interviews, etc. — but the amount of info needed just to give your FNOL a start a claim is extremely low.
A Cautionary Tale on Waiting Too Long — SiaSim v. Scottsdale
If you wait to gather all the details about a loss before giving FNOL, you risk getting nothing on your claim. That’s the lesson from a recent federal appeals case. The case, Siasim Colum., LLC v. Scottsdale Ins. Co. (11th Cir. 2022), stems from storm damage to a four-unit commercial property in Georgia. Within a week of the storm, tenants began complaining about water leaking into their units, and soon thereafter the property owner inspected the property and personally witnessed evidence of extensive water damage. Over the following months, he arranged a series of professional property inspections, each of which found new evidence of loss and damage. Despite knowing within a few weeks that the property had clearly suffered water damage, he waited more than six months to give his insurance company notice of the damage.
When asked why he waited so long to give his FNOL, the property owner explained: “[I]t took a lot of time to find out the extent of the damage, how bad it was. And it was multiple inspections that had to be done, and . . . . [w]e just didn’t know the extent of the damage and how much it was going to cost.” The 11th Circuit Court of Appeals had little difficulty concluding that this explanation didn’t excuse the property owner for notifying the insurer sooner about the loss. Noting that insureds “are not required to foresee every possible claim,” the appellate court found that “no reasonable jury could conclude that [the policyholder] acted reasonably: [the property owner] saw in his first inspection extensive water damage, and, within a month of the storm, a contractor recommended . . . repairs.” As a result, the court affirmed the dismissal of the case. In other words, because the property owner waited too long to notify the insurance company about the loss, the property owner got nothing on the claim, and the insurance company was completely absolved of having to pay a dime for repairs.
Create an Indisputable Record of the Notice
You not only need to quickly notify your insurer of a loss, you need to get credit for that quick notice. The most obvious way to do that is to create a written record of the notice. Within that written notice there are also important dos and don’ts that you should consider before submitted the notice.
Put the Notice in Writing
It’s far easier to prove FNOL when it’s in writing than when it’s done only over the phone. This doesn’t mean you can’t give your notice of the phone — in fact, sometimes storms may knock out the Internet in affected areas. But if you did give your notice over the phone, it’s critical to follow up in writing. You can do this with our free Notice of Loss Confirmation Letter. For more info on the confirmation letter and other suggested follow-up, see our companion article — specifically the section titled, Step 2: Seize Control with Written Follow-Up.
Stick to the Facts
Sticking to known facts is a good mantra for all communications related to your insurance claim, but it’s especially important for communications to the insurance company like a First Notice of Loss. Avoid the temptation to speculate — about what caused the loss, about the extent of the damage, really about anything.
Why? The simplest reason is that it’s just not needed for a First Notice of Loss. Why waste your time and slow down getting in your FNOL by guessing at things you’re not really sure of?
The more important reason, however, is that you could inadvertently undermine your own claim. To give a common example, let’s say you return to your home after an extended absence to find water damage has ruined walls and buckled floors. At this point, you should immediately notify your insurer (give your FNOL), but the only info you need to supply in that notice is that there’s water damage in your home. That’s it.
What happens unfortunately is that we can’t help but start to guess at the cause of that water damage, and to guess about loss causation — especially to your insurer — is to invite disaster to your claim on top of the actual disaster to your property. Using the water example above, you might have heard from your neighbors that sewage has been backing up the past few days, or that heavy rains caused flooding in the neighborhood. Without giving it too much thought, you might incorporate that theory in your FNOL, mentioning innocently that maybe the water came from recent flooding. The moment you do that, you can bye bye to getting any money on your claim because flood damage is always excluded from standard property insurance (sewage backup is also very often excluded or limited from standard coverage). So thanks to your innocent comment on flooding, you would promptly receive a very nice letter from your insurer flatly denying your claim. You can still try to rescue your claim, but now you’re fighting an uphill battle on your claim.
The point here is not to avoid telling your insurer factual information, especially when they request that information from you. You have a duty to reasonably cooperate on your claim, and if a flood truly did cause water damage, that’s awful, but it isn’t included standard property insurance. The real point in the scenario above is that you don’t actually know what caused the water damage. Maybe a major storm passed through, causing both flooding to your neighborhood (which is covered only if you have flood insurance) and wind-driven rain to enter your home (which likely is covered by standard homeowners or property insurance). So it’s in everyone’s interest, but especially yours, to stick to the facts and avoid speculation when communicating with your insurer.
Why Does a First Notice of Loss Matter?
We’re spending a lot of time of First Notice of Loss, but as you’ll see below, there are good reasons for doing that.
FNOL is a Duty under Your Policy
We’ve already covered that prompt or immediate notice is one of your duties under the terms of your insurance policy. But what’s the consequence for failing to fulfill this duty? What happens if you don’t give prompt notice?
Here too your policy should answer that question. Almost uniformly, the answer is that if you fail to fulfill any of the explicit duties after a loss outlined in your policy (including prompt FNOL), then your insurer is completely absolved of its duty to provide coverage for that loss — even if the loss is otherwise covered under the policy. Here’s an example of that language from a standard homeowners policy:
Duties After LossHO 00 03 05 11 (emphasis added)
In case of a loss to covered property, we have no duty to provide coverage under this policy if
the failure to comply with the following duties is prejudicial to us. These duties must be performed
either by you, an “insured” seeking coverage, or a representative of either . . . .
We saw this provision in action in the Siasim case. In that case, the court was giving effect to a clause like the one cited above. These clauses, sometimes described as creating a condition precedent, establish that your insurer doesn’t have to lift a finger in paying your claim if you fail to fulfill a duty like giving prompt notice. So don’t risk your claim — give your FNOL as soon as possible.
FNOL Starts the Claim Process
We’ve alluded to this, but from your insurer’s perspective, a First Notice of Loss is when the claim begins. It’s of course true that the event underlying a claim — a house fire, a car accident, an injury at your business — occurs before the FNOL. But these events don’t actually trigger an insurance claim — it’s the notice to the insurance company about the event that triggers the claim. Once this FNOL trigger occurs, the insurance company begins its claims process and the clock starts on statutory deadlines in many states. So the sooner you give FNOL and start a claim, the sooner the insurance company can begin working your claim and pay you what’s owed.
FNOL Can Trigger Legal Deadlines
Every state regulates insurance claims, and many states have laws on the book requiring insurance companies to respond to your claim within specific deadlines or timeframes. For many of the states that have these specific claim deadlines, FNOL usually one of the triggers for those deadlines.
For instance, in Texas, most insurers must begin investigating a claim within 15 calendar days of receiving a written notice of loss. Texas Ins. Code § 542.056. And in Florida, an insurance company must pay or deny a property insurance claim within 60 days of receiving your written FNOL, absent special circumstances. Section 627.70131(7)(a), Florida Statutes.
These are hugely helpful deadlines for policyholders, but they don’t go into effect until you actually give your FNOL (and note that in Texas, the FNOL needs to be in writing). So if you want to get the law on your side in helping move your claim forward, get that FNOL in to your insurer as soon as you can.
Notice of Loss vs. Making a Claim
We get this question a lot: Is a First Notice of Loss the same as “making” or “filing” a claim? In theory, notifying your insurer about a loss is distinct from filing or making a claim. But in practice, the two events are intertwined and difficult to separate. Below we’ll explore why policyholders and insureds are sometimes hesitant to actually file a claim, and what they can try to do about it. The short answer is, unfortunately, not much. In most cases, it’s best to proceed as though you want to give notice and start your claim.
The Typical Situation: Giving Notice and Making a Claim at the Same Time
In most cases, First Notice of Loss, making a claim, and filing a claim all mean the same thing, namely notifying the insurance company about a loss so the insurance company can start the claims process. This holds true when the policyholder or insured wants to both (a) notify the insurer about a loss and (b) start the claims process to get paid for the loss. This is also the position that insureds and policyholders find themselves in most of the time.
Practically, this is what insurers usually assume you want to do when you give FNOL. When you give your initial notice of a loss, yes you are fulfilling your contractual obligation to give prompt notice, but you’re also triggering the claims process within the insurance company. So your default expectation when giving FNOL is that it will both fulfill your policy duty and also start the claims process.
What if I Want To Give Notice Without Filing a Claim?
What if you’re unsure whether you want to actually make a claim? Can you notify your insurer about a loss without following through with a claim? What are the pros and cons of taking this approach? We’ll explore each of these issues below.
Why Policyholders Hesitate to File Claims
Let’s take a look at why someone might be hesitant to start the claims process.
Concern #1: My Losses Might Be Less than My Deductible
One reason is that your losses seem small, and the cost of repair or replacement might not exceed the applicable deductible. If it’s clear that your losses will not exceed your deductible, then you’re probably safe to skip the insurance process altogether and deal with repairs or replacement directly. But be careful: Sometimes the full scope of damage isn’t immediately obvious, especially when the incident involves water. Water and moisture trapped behind walls is hard to see but can ruin the structure of buildings. So unless your certain that your losses there’s a potential that your damages might exceed your deductible, you should probably proceed with starting a claim — you can always discontinue the claim later if you want.
Concern #2: Filing a Claim Could Increase My Insurance Rates
Many people also worry that filing a claim will cause their premiums to spike or their insurer to drop their coverage altogether. Insurance companies share information about the history of losses and claims in much the same way that banks share information about an individual’s credit history. Any time you start a claim with an insurance company, that claim and any associated information (for example, the amount of the payout) is recorded on shared databases like the Comprehensive Loss Underwriting Exchange (C.L.U.E.). Insurers use C.L.U.E. data to better assess the risk of future claims from a particular property or policyholder. The higher the risk, the higher the premiums or the chance that the insurer declines to offer insurance at all.
You should definitely give thought to how a claim could affect future rates, but don’t get too wrapped around the axle about it. You have insurance for a reason, and if your losses are significant, a jump in your rates is unlikely to cost you more than paying out of pocket to make repairs or purchase replacement goods losses.
In addition, not all claims affect rates in the same way. Insurance companies, for instance, will often tell you that making a claim because of natural disasters doesn’t significantly affect your rates or ability to secure coverage. Although it’s difficult to verify whether a statement like this is true, it would make sense given that catastrophes cause widespread damage regardless of the condition of the property or the attentiveness of the property owner. Even for non-catastrophe loss, C.L.U.E. reports should pick up important details like how much the insurer paid on a claim (including nothing), and whether an insured withdrew a claim — distinctions that should affect underwriting risk and ultimately your insurance rates. In fact, you have the right to request a copy of your C.L.U.E. report and even supplement the report with your own comments.
You can also try to make “an inquiry” with your insurer about whether your policy covers a loss without that inquiry appearing on your C.L.U.E. report. Some states specifically prohibit insurance company from making adverse underwriting decisions based solely on a policyholder making an inquiry about their policy. In California, for instance, insurance companies cannot deny or refuse to offer insurance just because someone inquires about the availability of coverage under a residential fire or property insurance policy — including the availability of coverage for a specific loss. Cal. Insurance Code § 791.12(c). But statutes like this are the exception not the rule. For the most part, there’s nothing
Giving Notice Without Starting the Claims Process Is Tricky
Is it possible to notify the carrier about a claim without triggering the claims process? The short answer is maybe.
Legally, you should be able to fulfill your contractual obligation to give notice of a loss without proceeding with a claim. As a federal court in Alabama recently noted, “The ‘duties after loss’ section of the Policy requires the insured to “give immediate notice” of loss to [the insurance company] or its agent, not to file a claim immediately.”
The practical reality of giving notice without filing a claim, however, is a trickier. As we noted above, the First Notice of Loss triggers an insurance company’s claims process. This is how it should be — you want your insurer to move fast in processing your claim. But that system also makes it difficult for insurance companies to receive notice without starting the claims process. This post from the Connecticut Department of Insurance summarizes the issue nicely:
The distinction between an inquiry and a claim is an important one. An inquiry is generally regarded as a call by a consumer to a company representative or agent to discuss terms of coverage including the extent of coverage on a specific loss. C.L.U.E. reports indicate losses by type. Consumers contacting their company or their agent to discuss an actual loss might be considered reporting a claim, even if the company does not end up making a claim payment. This is because when a loss occurs, the policy requires the company to take specific actions within specified time frames. Consumers should be specific as to whether they are filing a claim or only making an inquiry. . . . Many insurers are working on ways to inform their policyholders about the important distinction between a claim and an inquiry.Connecticut Department of Insurance.
So what’s the takeaway? Don’t worry too much about contacting your insurance company to start a claim. If you think you need to make a claim, give your FNOL and start the claim process. You can cancel the claim later if needed. Even if the fact of that claim makes its way to your insurance C.L.U.E. report, it’s probably not the end of the world. Remember, you pay for insurance for a reason. If you need to use it, you should.