Protect Yourself From A Liability Claim - An Ounce of Prevention

The overwhelming majority of automobile owners and homeowners have policies of insurance designed to insulate and protect them from personal injury claims. But when an accident occurs, they frequently make the same big, costly mistake. They fail to timely report the claim. The end result is that their insurance carrier denies coverage.

I see it happen much too often. People are afraid to report accidents to their insurance companies when they occur. They are afraid that their premiums will increase, and figure why take that risk when they are not even sure the other party is injured or will sue.

Whether it's an automobile accident, or a roofer losing balance and falling off the top of your home, not reporting a claim can be much more costly in the long run than any increase in your insurance premiums.

Most policies of insurance require you to promptly report accidents when you know, or should reasonably know, that somebody has a claim against you. Insurance companies are in the business of making money. Many times, if you fail to report a claim in a timely manner, they will deny coverage.

Even if the claim is bogus and lacks merit, your carrier still has an obligation to defend you. They will hire and pay for your attorney. But if you fail to timely report a claim, the insurance company may refuse to defend you, which can cost you thousands of dollars in attorneys' fees.

In New York, the statute of limitations on a general negligence claim is three (3) years. That period can be even longer if the injured party is a minor, has a disability, or meets certain other criteria for tolling the statute. If you are sued two (2) years after an accident and failed to report it, don't expect cooperation from your insurance company.

Sadly, many general practice attorneys never even think to advise their clients to put their insurance company on notice. Then, when the case is referred to me, I not only have to put in an answer and defend the client on the accident claim, but also take whatever steps I can to persuade the insurance company to provide coverage or at least pay for the client's defense. Sometimes that means suing the insurance company, which is a less than desirable position to be in.

So if you are involved in an auto accident, or somebody gets injured on your property, think twice before deciding not to report it. And if you do, make sure you not only call, but also do it in writing.