Know your Insurance: Your Responsibilities under your policy

We continue our Know Your Insurance series with a new topic: Your Job.  People rely on their insurance to protect them when disaster strikes.  However, few people know what that they have certain responsibilities built in to their insurance contract (and the law) that must be kept in order to keep their insurance coverage after an incident occurs.  This article is designed to help you know some of the general responsibilities you have under any insurance policy.  In order to fully know your duties, it is best for you to read your insurance policy where it sets forth what you must do to keep coverage.

 1.       Timely report the loss to the insurance company.   You cannot wait months or years to tell the insurance company that a loss occurred.  Generally you have a duty to report your loss in a reasonable timeframe. A good general rule is to report a loss within a week to your insurance company.  You can report it to your insurance agent or through your insurance company’s claim center.  The last thing you want to do is lose your insurance coverage for a loss because you simply did not tell your company that it occurred in a reasonable time frame.  So when you have a loss and need to file a claim, report your loss quickly, and if possible, do it the same day the loss occurs.  This will protect your coverage.

2.       Mitigate your Damages.   People often fail to realize that they have a legal duty to mitigate their damages when a loss occurs.  “Mitigating your damages” means you are making  your damages less severe or cost less.  For example, if you have a car wreck and you have a broken leg that needs surgery to heal, you must mitigate your damages by having the surgery.  You cannot claim exorbitant amounts of pain and suffering because you had to walk on a broken leg.  You should have fixed your leg.  Similarly, if a storm causes roof damage to your home and you are aware that rain is leaking into your home, you have a duty to repair the roof to prevent further damage to your home such as mold.  If you fail to mitigate your damages, an insurance company can argue that you are not entitled to the full extent of your damages because your actions led to your damages being greater than were otherwise necessary.

 3.       Cooperate with your insurance company after a loss.   Generally, your insurance policy has a clause that states that you will cooperate with your insurance company when a claim is made.  While disagreements will arise with your insurance company, you still have a duty to work with them while your claim is being processed.  This duty also applies when a claim is made against you for a loss you may have caused (such as a car wreck that is your fault).  You have a duty to help your insurance company when it requests information relating to the claim and if it requests for you to take action.  Your insurance company can take away its coverage if you completely ignore it and refuse to cooperate with the claims process.  This does not mean you have to agree with the insurance company’s evaluation of your.  It simply means that you have to be a part of the claims process while the insurance company is undergoing its investigation.

 These general rules will help protect your insurance coverage when a loss occurs.  Follow these tips to help make sure that your insurance company can’t claim you’re not doing your part when you need them to do theirs.