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Why do I have to cooperate with my insurance company?

On Behalf of | Dec 23, 2021 | Delayed And Denied Insurance Claims | 0 comments

Most insurance companies have language in their policies which require a person who makes a claim to cooperate with the insurance company.

In the language of the insurance business, these requirements are referred to as a duty of cooperation. A policyholder who neglects this duty could face significant consequences, including claim delays, claim denials and, in some cases, the cancellation of coverage.

At the most basic level, cooperating would for example include letting an insurance adjuster inspect damaged property. An Austin resident making a claim may also have to submit receipts or other documentation of his expenses.

In principle, it makes sense for Texans to work with their insurance carriers after a claim. After all, it is often the customer that has the best information about the facts surrounding a loss.

Likewise, customers serve as a valuable source of information if the carrier wants to mount a defense to a liability claim or wants to pursue someone whom the insurance company feels is responsible for the loss.

The duty to cooperate does not give an insurance company a free pass

However, the duty to cooperate does not mean that the insurance company can make unreasonable demands on their own customer.

For example, certain requests for personal or financial information may be outside the scope of what an insurance carrier really needs to know in order to pursue a claim.  An insurance carrier has no right to use unreasonable information requests as an excuse to delay or deny or claim payment.

A person should make sure she understands her rights before just agreeing to every demand or suggestion of the insurance carrier.

Examinations under oath raise special issues

As part of the duty to cooperate, an insurance company may ask a policyholder to submit to an examination under oath.

Much like a deposition, and examination under oath will require a person to testify under penalty for perjury about his claim and answer the questions of his insurance company’s lawyers. Too often, these lawyers might use the opportunity to make a person’s legitimate claim look fraudulent or exaggerated.

While the language of a policy may allow an insurance company to ask for a sworn examination, the policyholder may seek out legal assistance when responding.