Legislation Creates New Obligations for Insurance Companies to Disclose Policy Limits

New legislation is set to take effect October 1, 2011, which will directly affect tort claims concerning motor vehicle accidents.  The new legislation will allow a claimant, after filing a written tort claim, to obtain from the insurer documentation of the applicable limits of coverage in any insurance agreement under which the insurer may be liable to either satisfy all of part of the claim or indemnify or reimburse for payments made to satisfy the claim.

Before obtaining such documentation, however, the claimant must provide in writing several items to the insurer:

(1) The date of the vehicle accident;

(2) The name and last known address of the alleged tortfeasor;

(3) A copy of the vehicle accident report, if available;

(4) The insurer’s claim number, if available;

(5) The claimant’s health care bills and documentation of the claimant’s loss of income, if any,                                     resulting from the vehicle accident; and

(6) The records of health care treatment for the claimant’s injuries caused by the vehicle accident.

Furthermore, if the amount of health care bills and loss of income is at least $12,500, the insurer must disclose in writing the applicable limits of coverage in each written agreement under which the insurer may be liable.

There are separate and distinct requirements in the case of claims made by the estate of an individual or a beneficiary of the individual resulting from the death of the individual in a vehicle accident.  Under these types of claims the documentation may be obtained if the claimant provides in writing to the insurer:

(1) The date of the motor vehicle accident;

(2) The name and last known address of the alleged tortfeasor;

(3) A copy of the vehicle accident report, if available;

(4) The insurer’s claim number, if available;

(5) A copy of the decedent’s death certificate issued in the State or another jurisdiction;

(6) A copy of the letters of administration issued to appoint the personal representative of the decedent’s estate in the State or a substantially similar document issued by another jurisdiction;

(7) The name of each beneficiary of the decedent, if available;

(8) The relationship to the decedent of each known beneficiary of the decedent;

(9) The amount of economic damages, if any, claimed by each known beneficiary of the decedent, including any amount claimed based on future loss of earnings of the decedent;

(10) The health care bills for health care treatment, if any, of the decedent resulting from the vehicle accident;

(11) The records of health care treatment for injuries to the decedent caused by the vehicle accident; and

(12) Documentation of the decedent’s past loss of income, if any, resulting from the vehicle accident.

             Under either type of claim, the insurer has thirty days after the date of the request to provide in writing the documentation, regardless of whether or not the insurer contests the applicability of coverage to a claim.

The legislation also states that an insurer, its employees, or its agents may not be civilly or criminally liable for the disclosure of such documentation.  Further, documentation disclosed under this section will not constitute an admission or waiver and will not be admissible as evidence at trial.

The legislation, passed as House Bill 921 and Senate Bill 599, will be added to Title 10 of the Courts and Judicial Proceedings Article, as Sections 10-1101 – 10-1105 of “Subtitle 11. Pre-litigation Discovery.”

Article contributed by Andy Nichols