Insurance Carriers Must Disclose Policy Limits
Automobile insurance is a necessity. It’s better to have it, and not need it, than to need it, and not have it. You probably know how much coverage you have, as you’re the one paying for it. But after a collision, you need to know the extent of the at-fault driver’s insurance. This determines your potential compensation. It is also why insurance carriers must disclose policy limits to injured claimants.
Old Problem Meets New Law
As recently as 2019, auto insurers could conceal their drivers’ policy limits. Injured, non-at-fault parties faced a tough choice: accept a low offer or sue the at-fault driver, often leading to unnecessary legal congestion. A fair solution was overdue.
On January 1, 2020, a new Colorado law went into effect. The law — codified in Colorado Revised Statutes 10-3-1117 — helps insurance claimants get more compensation for accidents they didn’t cause.
How? By requiring insurance carriers to disclose, upon request, the policy limits of the at-fault drivers they insure. A policy limit is the most money an insurer will pay for a claim their contract covers.
The Old Problem
Getting insurance companies to offer appropriate compensation used to be a cat-and-mouse game.
In a typical scenario, as the lawyer, I’d contact the insurance company and say, “Hey, I have a client who is badly injured and needs surgery. The procedure is going to cost $150,000. They’re worried about how they’re going to pay for that. What are your policy limits?”
The insurer’s reply would be, “We’re not at liberty to disclose those limits. After your client has the surgery, we’ll evaluate the claim.”
So then we’d have no choice but to file a lawsuit to get that disclosure. Now, this sort of practice by insurance carriers is considered bad faith.
The Difficult Choice
Imagine you’re the client in the dilemma described above. You’ve been injured by a negligent driver and face $150,000 in surgery and medical expenses. The at-fault driver’s insurer wants to decide how much or how little to compensate you.
What do you do? You have to get the recommended surgery. You have no idea how much of the cost will come out of your own pocket.
Most people don’t have a lot of health insurance. Many who do are paying deductibles as high as $10,000 can’t afford that. They shouldn’t even have to worry about it, as they’ve been put in this position by someone else’s negligence.
A new law was needed to end this cat-and-mouse game with insurers.
How the 2020 Law Works
If you’ve been injured by a negligent driver, you can obtain that driver’s insurance policy details. You, or your attorney, must submit the written request to the driver’s insurer. Once the insurer receives the request, they have 30 days to provide:
- The name of the insurance company,
- The names of all drivers covered by the policy,
- The total amount the policy covers for liability claims, and
- A copy of the entire policy, including any additional coverage
The insurer must also disclose any relevant excess or umbrella insurance policies the driver holds. A personal umbrella policy (PUP) provides extra protection against major liability claims once one’s regular insurance limits are exceeded.
The Penalty for Delay
After 30 days, the insurer will owe $100 for each additional day of delay. For example: If it takes 40 days for the at-fault driver’s insurer — Geico, Progressive, State Farm, etc. — to comply with your request, they’ll owe you $1,000.
Under this law, non-compliant insurers are also responsible for reimbursing your attorney fees and court costs. It will literally cost you nothing to go after them for dragging their feet.
I have had cases where insurers waited almost a year before complying with the written request. That can come to more than $30,000 in fines.
Non-Disclosure Provision
Once you receive the requested information, you can only discuss it with your attorney.
Balancing the Scales
The 2020 law promotes transparency and fairness. It helps car crash victims understand the full extent of compensation they could receive. It also helps reduce unnecessary lawsuits that bog down the legal system. Prior to 2020, claimants had to file a lawsuit against the other driver to call an insurer’s bluff on policy limits.
Get the Compensation You Deserve
Don’t let a negligent driver’s insurance carrier jerk you around with delays and low-ball settlement offers. When an insurance carrier uses shady tactics to discourage you, fight back. If you’ve recently been hurt in an accident that wasn’t your fault, let them know you mean business. Call 303-688-0944 for a case review with an experienced insurance litigation attorney.