Policyholders pay good money for their insurance. But when a loss occurs or someone sues you, insurance coverage is not automatic. People who make insurance claims face several potential pitfalls that may prevent them from getting what they paid for.
One of the first mistakes policyholders sometimes make is failing to promptly notify the insurance company. Insurance policies typically require a policy holder to provide “prompt notice,” notice “as soon as possible,” or the like. It is important for policyholders to promptly notify insurance companies of potential claims because insurance companies may deny coverage based on a policyholder’s delay.
Sometimes policyholders are convinced not to pursue a claim after speaking with an insurance adjuster who tells them that their claim is not covered. It is important to realize that people who work for insurance do not have the policyholders’ best interests at heart. They may seem friendly and helpful, but their job is to do everything they can to avoid paying the claim. They can oversimplify the coverage issues, make misleading statements, and even misrepresent what is covered. Instead of relying on an informal phone conversation with someone who works for the insurance company, policyholders should submit a formal claim and get the insurance company’s acknowledgment of the claim and the coverage decision in writing.
Another mistake that can occur is blind reliance on an insurance company’s coverage decision. Often, there are complicated facts and complex coverage issues. For example, property damage may have been caused by several factors, some of which are covered and some of which are not. Or you may be sued by someone presenting several claims, some of which are covered and some of which are not. If you receive a reservation of rights letter or you believe that a coverage decision may be incorrect, an experienced insurance coverage attorney can review your insurance policy and ensure that you get what you paid for.
Of course, filing an insurance claim can lead to an increase in the premium that policyholders pay for future coverage. Even before you file a claim, an experienced insurance coverage attorney can help you determine what is covered, whether to file the claim, and how to navigate the insurance claim process.
Sam is a partner in Milgrom and Daskam’s litigation group. 303-900-3804 samuel.john@milgromlaw.com
