06 Oct Claim Handling Essentials Part 1 – Get the Policy
To many it may seem like an obvious step, but you would be surprised how often I get a file containing only part of, or even none of, the insurance policy. As an insurance attorney, there is nothing more valuable for me to have when evaluating a claim than the policy and the same should go for contractors and public adjusters. After-all, at its core, an insurance claim is a contractual dispute. In this sense, trying to navigate a claim without the contract is the equivalent of a quarterback being thrust into action without fully knowing the playbook. Sure, it is possible to cross the goal-line once or twice without having a firm grasp of the offense, but after a while the limited understanding will prevent him from moving the chains. In our line of work, the policy essentially provides us with our playbook. With it, we can properly read our coverages and evaluate the value of any given claim. Without it, the odds of getting stuffed become infinitely greater.
The good news is that you dont have to be a lawyer to understand what coverages a given insurance policy affords. What you do need, however, is to have a copy of it. Once you do, these are but a few examples of the critical information you will have:
- What is the suit limitation provision? I will be covering this topic in the next part of this series, but knowing whether the policy contains a one or two-year suit limitation provision is vital in understanding the amount of time you have to get the claim resolved before turning it over to an attorney.
- What are the policy limits and is there a co-insurance provision? I will also save the topic of co-insurance for a later blog post, but it is critical to know whether the policy has such a provision. If it does, you must be careful in how you present the claim so as not to incur significant reductions in the amount you are able to recover.
- Does the policy afford replacement cost (RCV) coverage?
- Does the policy afford ordinance and law coverage?
- Does the policy contain a cosmetic damage exclusion?
- If you are handling a commercial claim, what kind of business interruption coverage is there?
Having a firm grasp of these coverage questions at the outset of a claim could make all the difference in your decision as to whether to take it on. It will also allow you to formulate the best plan of attack if you do so. If these coverages are working against you, it maybe that the best course of action is to simply get the claim documented and then turn it over to an attorney. Which brings me to my next point . . .
For an attorney, having the policy when we get a claim is critical. When I get a claim, I want to be able to press the issue with the carrier right away by presenting a full package that includes every category of recoverable damages. Without the policy I am hamstrung in my ability to do this. Moreover, sometimes, the most effective thing I can do when I get a claim is to immediately file suit. Doing so allows me to cut out an unhelpful or biased public adjuster and work with an attorney who may see the claim more reasonably, or with whom I have a prior working relationship. But without the insurance policy this becomes much more difficult. A complaint for breach of contract must include a true and accurate copy of the contract it is based on. If I don’t have the policy, I will have to wait to get it from either the insurance company or the client.
Perhaps most importantly, having the policy will provide you with the limitations period for filing a lawsuit, which I will discuss in part 2 of this series.