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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.

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