Texas requires that you have liability insurance on your car with a minimum coverage of $30,000. What is this?
You are in an accident and the police find you are at fault (for example: running a red light, rear-ending someone), and someone gets hurt. You can bet your bottom dollar the injured person will file a negligence claim against you. If you have insurance on your car, and you promptly notify your insurance company, they will step in and try to negotiate a settlement. If that can’t be arranged, and you are sued, the insurance company will assign an attorney of their choice to defend you. If the case can be settled within the policy limits, the insurance company will pay that, and if it goes to trial, the insurance company will pay a judgment up to the policy limits. Liability insurance protects you financially, within the terms of the policy.
Ah, the policy! You get a little card that you carry in your car. The card says you have insurance, but little else. What does the insurance cover? Your insurance agent will send you a one-page document listing the coverage type and policy limits. You still don’t know what the policy covers, and more importantly, what it does not cover. The insurance company will send you the policy. But wait, the policy is thirty pages, ¾ which involves what it WON’T cover. When was the last time you read your car insurance policy? Probably never, and if you tried, it would make your head spin. It is filled with exclusions, some examples being it does not cover drivers whom you did not permit to drive. It will not cover accidents where you use the car for commercial purposes like Doordash or Uber. Sometimes to get a lower rate, people agree to an exclusion for a teenage driver who lives in their house. Dozens more exclusions, limitations, and obligations can void or limit coverage.
The same principles of your auto liability insurance is found in other kinds of insurance, such as home and business policies. Yes, there is coverage for property loss, such as fire, wind, and theft, but they also have provisions that if a claim is made against you for various other types of claims such as slip and fall, damage of reputation, or damage to business opportunity, the policy requires the carrier to provide a defense and pay for a settlement or judgment for a covered loss., Note that the policy will list a very long and obscure list of what it won’t cover, or coverage limits. Even though an incident may be found to be excluded, it is common that at the beginning of the claim process, the carrier still has an obligation to offer a defense. This is important because the expense to defend a lawsuit (attorney fees and costs) can run into tens of thousands of dollars and is a valuable benefit in an insurance policy.
Bottom line, if a carrier denies your claim, says there is a limitation, or you failed to meet an obligation, whether it be an auto, home, or business policy, give the Law Office of Elliott Klein, LLC a call, and we will work it through.