What should I include in a Notice of Claim letter to the Insurance Company?

Had an accident? A fire? Someone’s sued you? You need notify your insurance company. The repercussions of when you do this is a topic for a different post, but do it as soon as you can. What do you tell the insurer? There are differing opinions on this. In this post, I’ll let you know what I put into a notice of claim letter to insurance companies.

The short answer—it depends. It depends on the policy(ies) at issue, the type of claim, the type of policy, the coverage problems at issue, etc. If you’re really concerned, talk to an attorney.

That being said, here are some guidelines to include in your notice letter.

First, if you know the policy(ies) numbers that are implicated, you should include those. I suggest you also state “and any other applicable policies.”  You may not know initially which policies are actually triggered and at issue at the start.

Second, it is helpful to identify the person or entity covered under the policy. This, (along with the policy number(s)) assists the insurer figure out the policies that are at issue.

Third, you should include description of the claim. If you’ve been sued, I wouldn’t characterize the lawsuit. Doing so could impact the coverage analysis. Just inform the insurer that you’ve been sued and attach a copy of the complaint. If there’s been an accident, I’d follow the same guidance. Just say you’ve been in or had an accident. You can identify when, where, and the contact information of others involved. You can attach a police report if available. I wouldn’t address who you think was at fault.
 

I think it is a good idea in your notice to request a “Certified” copy of any applicable policies. In Indiana, insurers have an obligation to do provide you a copy. If they do not, they could lose their coverage defenses.

If you already have a lawyer, a contractor, etc. involved, let the insurer know who you’re using. Request the insurer to advise you if they suggest someone else. I’d also state that you’ll forward the insurer their bills. This helps minimize a potential subsequent argument that you didn’t use the right person/organization.

I would send this letter certified mail so that you have proof you sent it and when the insurer received it.

Finally, I would also send notice to your insurance agent/broker. Ask them to pass the notice letter along to any potential insurer. I’d also ask them for copies of the policies as well.

Good luck. As always, this is not legal advice.

The Types & Layers of Insurance Coverage

It’s important to understand the type of insurance you have—and need. Insurance comes in many shapes and forms. With this post, I hope to give you a primer on the general structure of insurance.

Policyholders need to know the difference between the types of coverage and the layers of coverage they have. The types of coverage companies typically have include general liability, property, automotive, and workmen’s compensation.  Other coverages are (but aren’t limited to) products liability, foreign liability, director’s and officer’s liability, and errors and omissions. 

As the phrase suggests, the “type of coverage” describes the things your policy will cover. For example, property coverage generally covers damage to your property. Liability coverage provides a defense and an indemnification for liabilities to third parties (think slip and fall). An automotive policy, not surprisingly, covers your vehicles.

While policyholders often have different types of coverage, they also likely have different layers of coverage. Policyholders commonly purchase layers of coverage.  By doing so, policyholders can often lower the total premium they would pay for the same amount of coverage under a single, high limit policy.

The layers of policies are often termed “primary,” “excess,” or “umbrella.” The primary policy is the first policy to respond. Once the primary policy’s limits are exhausted, the excess (or possibly the umbrella) policy will step in and continue to cover the claim. Umbrella policies are designed to serve as both a primary policy and an excess policy. The umbrella policy functions as high excess policy above the primary policies, while at the same time serving as a primary policy in those areas of coverage without a specific primary policy.

Really, the best way to explain the “types” and “layers” of coverage is to illustrate it.

This chart is an example of a company’s potential coverage in a single year. The types of coverage run along the x-axis, while the layers of coverage (and their amounts) are on the y-axis. Primary policies sit first, with the excess policies above them. The umbrella policy sits as the high excess policy for most types of coverage, but fills in the gap of coverage for the Foreign Liability.

If you have questions about any of this, feel free to contact me.