The world of insurance is complicated, no matter what variety you’re looking into buying. Unfortunately, with so many options, it can be easy to trip yourself up and choose a policy that doesn’t suit your needs. This is a major problem in all situations, but it is especially bad if you find yourself in a situation where you need to utilize your insurance policy, and it turns out that you aren’t covered. An insurance policy that doesn’t cover your claim can mean you have to pay for your court costs out of pocket, or even that you will get poorer representation in court because your insurance company will not defend you.
Luckily, our legal professionals have a lot of experience dealing with insurance policies, and they know what kinds of red flag language to watch out for. Before you commit to an insurance policy, make sure you’ve checked it for these problems, so you don’t get a nasty surprise should you ever need to use it.<--!more-->
1. “Full Coverage” Isn’t A Guarantee
One common mistake insurance customers make is assuming that “full coverage” means they are covered, no matter what happens. In this case, legal language and common usage are very different. As attorney Steven D. Pattee elaborates,
“I have heard clients say they purchased “full coverage” believing that it would cover anything without limits. Be certain to ask your insurance agent about your limits and any exclusions found in your policy.”
“Full coverage” does not mean you are fully covered. It is still important that you read your policy thoroughly, so you know when your coverage applies, and when you are not covered, and there are no nasty surprises down the road. And while you’re at it…
2. Know Your Exclusions
Insurance companies can deny coverage for a variety of reasons, called “exclusions,” all of which will be detailed in your policy. I’ts up to you to read your policy thoroughly, and find out what these exclusions are. Knowing your exclusions makes it easier for you to avoid behavior that gives your insurance company an out, so they can’t deny your claim on a technicality. It also helps you know how to write your claim so that it is not denied. Exclusions come in a wide variety of forms, but one of the most common is…
3. Intentional Conduct Exclusions
One of the central concepts behind insurance policies is that they are designed to protect you and your assets in case of accident. That means that the policies only cover you if the damage was unintentional. Attorney Ramsey Bahrawy explains,
“Insurance covers for negligent conduct but usually not intentional conduct.”
Whether or not an accident is your fault can affect your insurance payout, but if you did it on purpose, you may not get a payout at all. There are insurance policies that pay out even for intentional conduct, but they are rare.
4. Filing Time Limits
Finally, but perhaps most importantly, make sure you know what the time limit on your policy is for filing a claim. Attorney Judah Fuld hates seeing this happen to clients:
“The most unfortunate scenario plays out when coverage is denied for failure to file a claim within the required period. Each policy differs as to the filing period, but be sure to file immediately so as to avoid denied coverage based on a late claim.”
Even if your case is perfectly within the bounds of your policy, and you properly researched all your exclusions and wrote your claim correctly, not filing on time can disqualify your case completely. Know what the time limit on your policy is, and always file your claim as early as you possibly can. Don’t procrastinate on this. You’ll be glad for it later.