If you have ever been involved in an automobile accident, you probably have some idea of what happens when there is a liability claim made against you. A personal liability claim on your home insurance policy functions in a similar fashion and is handled by an insurance claims adjuster. The process may seem frightening, especially if lawyers and lawsuits are involved. But hopefully, by understanding the various steps involved, you will know what to expect and be prepared to deal with the claim.
The first step in dealing with a personal liability claim is to report it to your home insurance company. It’s very important to report the claim as soon as possible once you are aware of it. If you delay, some insurance policies will allow the insurance company to deny coverage. When reporting the claim, be sure to provide as much information as you can to the insurance company. The claims adjuster will need to conduct an investigation and having all the facts will help them properly evaluate the claim.
In most cases, the claims adjuster assigned to your claim will not be the person who took the loss report from you. Instead, the insurance company assigns the claim to an individual based on the type of claim and the claim adjuster’s expertise. Once the handling adjuster has received your claim, you will be contacted to provide your version of the facts. The adjuster may ask for your permission to record your statement. Your adjuster will also make contact with the party presenting the claim, known as the claimant, to secure their version of the incident.
Your adjuster may also use an outside investigator to visit the scene of the incident. If the incident took place at your home, you need to cooperate and allow your insurer’s investigator access to the location. Once the adjuster has all the facts to make a determination, he or she will then contact the claimant with the outcome. If the adjuster determines you are liable for the claim, the claimant will be contacted in an attempt to reach a monetary settlement. If you are found not liable, the adjuster will generally send the claimant a written denial letter.
At this stage in the claim, it’s possible the claimant will file a lawsuit against you. If the adjuster and the claimant are unable to reach an agreeable settlement, even when you are found to be liable, the claimant may hire an attorney to sue you. Likewise, even if the adjuster has denied the claim based on liability, it’s very likely the claimant will not accept the denial and instead will hire an attorney to sue you. In either event, if you are served with a lawsuit, you must immediately advise your claims adjuster. The adjuster will then hire an attorney (or use an attorney on the insurance company’s staff) to defend you against the lawsuit. You may be requested to provide additional information to aid in the defense and it is your obligation to cooperate if you want your insurance company to continue paying for your defense.
In most cases, the lawsuit does not reach a trial. It’s likely that the insurance company and the claimant (now known as a plaintiff) will reach a settlement to resolve the case before it gets to that stage. If, however, the case must go to trial, you will be required to be present in court as the defendant. A judgment rendered by the court will then be paid by the insurance company. You should keep in mind that jury verdicts can often be unpredictable and of a very high dollar value. Therefore, to protect yourself from the liability, you need to have sufficient liability limits on your home insurance policy. This is a good time to review your policy and determine if you have enough coverage. You may also want to consider an umbrella liability policy for increased liability limits regardless of where you live: Virginia Beach, Washington DC, Wichita, Los Angeles, Long Beach, etc.