When handling personal injury, wrongful death, or property damage claims, one of the most critical early steps for attorneys is determining the policy limits of the at-fault party’s insurance coverage. Without this information, it’s nearly impossible to evaluate the case’s true settlement potential, negotiate effectively, or advise the client accurately.
Policy limit verification, the process of confirming the exact amount of insurance coverage available—requires diligence, persistence, and a solid understanding of insurance law and procedure. Below is a step-by-step guide for attorneys to efficiently and ethically obtain and verify policy limits.
1. Understand Why Policy Limit Verification Matters
Before diving into the process, it’s essential to understand why verifying Policy limit verification is so crucial. Policy limits determine the maximum amount an insurer will pay under a given policy. Knowing these limits allows attorneys to:
Evaluate whether a case is worth pursuing or litigating.
Develop a realistic settlement strategy.
Identify potential underinsured or uninsured exposures.
Explore alternative sources of recovery (e.g., umbrella policies, employer policies, or personal assets).
Failing to confirm policy limits early in a case can lead to undervaluing a claim, accepting an inadequate settlement, or missing opportunities to pursue additional coverage.
2. Request Policy Information Promptly
The first practical step is to formally request insurance information from the opposing party or their insurer.
Most states have statutes or regulations requiring insurers or insured parties to disclose policy details upon reasonable request, especially in personal injury claims. For example, California Insurance Code § 791.13, Florida Statute § 627.4137, and New York Insurance Law § 3420(f) all require insurers to provide policy limits upon written request.
Your request should be:
In writing (preferably by certified mail or email with delivery confirmation).
Specific about the information you need.
Professional and compliant with applicable laws.
Example of a Policy Limit Request Letter:
Dear [Claims Adjuster/Defense Counsel],
Pursuant to [relevant statute or rule], please provide the following information for your insured, [Defendant’s Name]:
The name of each insurer providing coverage.
The policy number(s) and effective dates.
The amount of coverage per occurrence and in the aggregate.
Copies of all applicable insurance policies, including declarations pages, endorsements, and any umbrella or excess coverage.
The name and contact information of the insured and claims representative.
Kindly provide this information within [10 or 14] days as required by law.
Sincerely,
[Attorney Name]
Sending this letter promptly—ideally soon after representation begins—sets a professional tone and ensures you comply with time-sensitive disclosure rules.
3. Follow Up Diligently and Document Everything
Insurance companies may delay or provide incomplete information. Follow-up is often necessary. Maintain a paper trail of all communications—letters, emails, and phone calls. If the insurer fails to respond, a polite but firm reminder citing applicable statutes or ethical obligations can help.
If noncompliance persists, you may consider filing a motion to compel disclosure during discovery or using other litigation tools to obtain the information. Some states impose penalties or sanctions for failure to disclose policy limits when requested.
Thorough documentation also protects you in case of disputes over timing or accuracy of disclosures.
4. Obtain and Review the Policy Documents
Once the insurer provides the requested documents, review them carefully—never rely solely on a verbal confirmation of policy limits. Insurers sometimes disclose only the declarations page, which summarizes coverage amounts but may omit critical details like exclusions, endorsements, or additional insureds.
Key sections to review include:
Declarations Page: Outlines the policy type, insured parties, limits, and effective dates.
Insuring Agreement: Defines what the insurer agrees to cover.
Exclusions: Lists scenarios or types of damages that are not covered.
Endorsements and Riders: Modify coverage, sometimes adding or reducing limits.
Umbrella or Excess Policies: Provide additional coverage above the primary policy.
Cross-check the documents to ensure consistency between what the insurer states and what the policy language confirms. Discrepancies can have major implications for settlement negotiations.
5. Verify Additional or Secondary Coverage
Many defendants have multiple layers of coverage, such as:
Umbrella or excess liability policies that provide coverage above the primary policy.
Employer or commercial general liability policies if the insured was acting within the scope of employment.
Homeowner’s or renter’s policies that may cover certain personal injury claims.
Third-party contractual indemnification agreements that shift liability to another entity.
During your investigation, look for clues indicating these additional coverages. For instance, if the insured was driving for work at the time of an accident, their employer’s policy may apply. Subpoenas, interrogatories, and deposition questions can help uncover hidden or overlapping policies.
6. Confirm the Authenticity of the Information
Verification isn’t complete until you confirm the authenticity of the information provided. Some insurers might provide summaries rather than official policy documents, and errors can occur in manual reporting.
To verify:
Compare the policy documents to certificates of insurance or official insurer correspondence.
Contact the insurance carrier directly (not just the adjuster) to confirm the coverage details.
Check the state insurance department’s database, if available, to ensure the insurer is licensed and the policy active during the incident.
If the insurer refuses to verify in writing, document your attempts—these records can be crucial in future bad faith or discovery motions.
7. Analyze Policy Limits in Context
After verifying the policy limits, evaluate them against the expected damages in your case. Consider:
The severity and permanency of injuries.
Economic losses (medical expenses, lost income, etc.).
Non-economic damages (pain and suffering).
Comparative liability or potential defenses.
If damages are likely to exceed the policy limits, you may explore:
Bad faith claims if the insurer fails to settle within limits.
Direct actions against the insured for amounts exceeding coverage.
Stacking policies if permitted under state law.
Uninsured/Underinsured Motorist (UM/UIM) coverage from your client’s own insurer.
A thorough policy limit analysis shapes your negotiation strategy and ensures you don’t leave money on the table.
8. Use Discovery Strategically if Disclosure Is Withheld
If the insurer refuses to disclose policy limits voluntarily, formal discovery can force disclosure. Common discovery tools include:
Interrogatories requesting details about all applicable insurance coverage.
Requests for Production seeking copies of insurance policies.
Depositions of the insured or claims representatives.
Under Rule 26(a)(1)(A)(iv) of the Federal Rules of Civil Procedure, parties must disclose “any insurance agreement under which an insurance business may be liable” to satisfy all or part of a judgment. Most state procedural rules contain similar provisions.
Using discovery efficiently ensures compliance and prevents insurers from concealing available coverage.
9. Keep Clients Informed Throughout the Process
Transparency with clients is critical. Clients should understand what policy limit verification entails, how long it may take, and how it affects their case’s potential value. Provide updates when policy information is received, and explain how the coverage impacts strategy—especially if the policy limits are insufficient to cover anticipated damages.
Well-informed clients are more likely to trust your judgment when deciding whether to settle or proceed with litigation.
10. Maintain Ethical and Professional Standards
Finally, always conduct policy limit verification ethically. Avoid misrepresentation or undue pressure on insurers or opposing parties. Ensure all communications are truthful and documented. Many bar associations view misuse of policy information or failure to safeguard confidential documents as professional misconduct.
Conclusion
Policy limit verification is more than a procedural task—it’s a cornerstone of effective legal strategy in personal injury and insurance litigation. By systematically requesting, verifying, and analyzing policy information, attorneys can uncover critical coverage details that shape the entire trajectory of a case.
Following a structured approach—like the ten-step process outlined here—ensures that attorneys not only comply with legal and ethical standards but also maximize recovery potential for their clients. In today’s complex insurance landscape, thorough policy limit verification isn’t optional—it’s essential for successful advocacy.
