We often hear about an insurance company that acted in “bad faith”
to deny, or delay payment of, a claim. But you, too, have a legal duty
to “cooperate” with your own insurance company when you present
an insurance claim.
Note that your duty of cooperation
is not required when you are presenting a claim to an insurance company who represents
the at-fault party. In that situation, you will be dealing with the insurance
company of the person who caused your injuries or damages. That is an
adverse situation—like a war. You are not required to “cooperate”
with an insurance company that does not insure you.
But every insurance policy, whether it is a homeowners’ policy, an
auto policy or a policy for medical or health benefits, contains a written
requirement that its policyholder must “cooperate” with the
insurance company in the presentation and evaluation of the claim—or
else the insurance company can deny
all coverage. In other words, if you fail to cooperate with your own insurance
company, the insurance company can act as if the insurance policy never
existed—even when you have fully and completely paid for it!
What kind of “cooperation” is required?
In the case of an
auto accident where you ask your own insurance company to pay medical expenses, or to
pay for an
uninsured driver that hit you, you will be asked to sign an authorization for the release
of all of your medical information (both related and unrelated to the
injury at issue). Many people do not want to sign an authorization that
would completely open up their medical history to their insurance company.
While some auto insurance companies may allow you to provide a more restricted
authorization with a claim, many do not. Insurance companies want to have
the option to access all prior medical history of their policyholder.
Insurance companies want to find out if their policyholder had the same
or similar medical issues before—thereby giving the insurance company
a basis to limit or deny your medical or injury claim.
In the case of an auto accident, your own insurance company may also ask
you to provide a list of all your medical providers, not only providers
that have treated you for the auto injuries, but also your primary care
doctor and prior medical providers that treated you before for the same
or similar injuries, conditions or complaints. Likewise, your insurance
company may ask you to fill out a questionnaire to give details about
the car accident and your injuries.
While you are never required to provide this kind of detailed and private
information and authorization to an insurance company for the driver that
hit you, you are required to cooperate with your own insurance company
when you are making a claim for benefits under your own insurance policy.
If you do not provide the requested authorizations and information to
your own insurance company, your insurance company will send you a letter
advising you that you have breached your insurance contract and that there
will be no benefits paid under the insurance contract. This letter will
come by certified mail and may be called a “reservation of rights”
letter. Once the insurance company sends that letter, it will stop asking
you for the information and will simply close out your claim as if it
was never presented.
Even if you seek legal counsel after you receive the reservation of rights
letter, the insurance company does not have to re-open your claim after
they are contacted by your attorney. If your failure to cooperate has
“prejudiced” your insurance company in some way (e.g. evidence
is forever lost), courts have held that they are within their legal and
contractual rights to rely on their denial of coverage under the policy.
Most insurance companies, however, want to resolve claims and to avoid
controversy with their policyholders—and avoid the involvement of
the Colorado Division of Insurance. Your attorney can advocate for you
with your insurance company to streamline, and sometimes limit, the requests
for information or other issues that have come between you and your insurance
company. Experienced attorneys know which insurance requests you must
answer and which ones can be negotiated or modified.
Contact Clawson & Clawson LLP
Handling insurance company requests for information can be a minefield
and may not be something you feel comfortable handling on your own. If
you have concerns about what your own insurance company is asking you
to provide, seek counsel from experienced insurance attorneys. Don’t
wait until your insurance coverage has been cut off. If you are getting
threatening letters from your insurance company seek legal counsel as
soon as possible. Experienced attorneys, such as those at Clawson &
Clawson LLP, can discuss the scope of the insurance requests with you
and can explain whether the requests are reasonable or unreasonable and
provide options to you as to how to proceed with your claim.