{6:50 minutes to read} When you submit a claim for insurance benefits under your policy, there are certain things you, as the insured, are required to do. There are things the insurance company is required to do as well. Let’s discuss generally what some of those things are.
Notice of Claim
When you have an insurance claim, the first step is to tell the insurance about it—we call that giving them notice, or “notice of claim.”
Notice of claim is a prerequisite for any insurance company, under any circumstance, to begin to determine what action they will take regarding your claim. There can be very specific rules regarding how quickly you must provide a notice of claim, as well as the consequences of not providing notice of claim in a timely manner.
Method of Notification
The next step is to determine the best way of notifying your insurance company. Some automobile insurance companies, for example, have a hotline you can call, submit your claim information over the phone, and get a claim number. For others, it may be best to notify your broker. Or, sending a letter to notify your insurance company of the claim may be the best option.
The method of notification you choose depends on the nature of the claim and the type of policy that you have. Like we always advise, look to the notice provisions of your policy to see which methods of giving notice are required and what information must be included.
In another example, if you get sued, you have to notify the insurance company, send them the lawsuit, and ask for coverage. Otherwise, in states like New York, you could potentially forfeit coverage for the entire claim. These laws vary from state to state.
Proof of Loss
After giving notice to any type of claim, the insurance company will typically send you proof of loss forms to complete. Many states require these forms to be sent to you within a certain time frame. The proof of loss forms asks you to describe the nature and specifics of your loss.
If you have a fire claim, for example, they will want to know what damage was done to the structure, to the property, and to any personal items. They will ask the value of your personal items and whether or not they are salvageable or recoverable. They will then “adjust the loss” by looking at the claim, sending out evaluators, and then determining how much they will pay you for your loss, if anything.
If you are sued and don’t have a loss but have a liability claim, the insurance company should hire a lawyer to defend you and, hopefully, agree to indemnify you up to the limits of your policy.
As with providing notice, you also need to provide proof of loss in a timely manner. There are regulations and laws that specifically say that proof of loss must be provided within a certain time, or the timeframe may be dictated by your policy, all of which are enforceable.
Providing notice and proof of loss are two very important things you need to do for an insurance company to determine whether they are going to pay you.
Cooperation
The next step in the course of your loss with an insurance company is to cooperate. Cooperation means providing the information the insurance company requests in order for them to make their payout determination. One mistake that people—sometimes including lawyers—make in property damage claims is thinking that certain information requested by the insurance company is an invasion of privacy or improper. This might be information such as:
• tax returns,
• bank statements,
• details concerning a business that was operated on the premises, and
• details concerning what you were doing at your home.
These are legally authorized requests and it’s your obligation to cooperate if you want to get paid. You need to provide this financial information and detailed proof of your harm or injury if you want to get paid.
You also have to advise the insurance company if you’re involved in a circumstance where someone is making a claim against you. Also, do not pay the other party any money or give them anything to try to get them to not pursue a claim—you could be placing your claim and coverage at risk.
Examination Under Oath
The final thing that may come up during your claim is the insurance company asking you to appear and testify at what is called an Examination Under Oath, or EUO. An EUO is like a deposition. If they have questions or suspicions about your loss, an insurance company or its lawyers can send you a letter saying that you need to appear for Examination Under Oath and you need to provide X, Y, and Z information. If you refuse to appear at the EUO or cooperate during the EUO by answering their questions, it will void your claim in its entirety, and you won’t get paid.
Remember: When you have a loss for which you’re seeking insurance money, there are 3 critical things you need to do as the insured: Provide notice. Provide proof of loss. Cooperate.
Evan S. Schwartz
Founder of Schwartz, Conroy & Hack
800-745-1755
ESS@schwartzlawpc.com