Discovering Insurance Policy Limits without Filing a Lawsuit in the Washington, DC Area

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In handling personal injury claims, there are many cases where justice and efficiency are best served when we know the amount of insurance coverage available.  This is especially true in cases when a person is seriously injured.   If an injured person’s medical expenses, out-of-pocket costs, and pain and suffering vastly exceed the amount of available insurance, the insurance company usually throws in the towel.  But the problem is that insurance companies don’t want to reveal the amount of money available to pay for a person’s injuries.  In fact, it is usually not until a lawsuit is filed that an injured person’s lawyer learns what the insurance policy’s limits are.

Fortunately, in the last few years, Washington, DC, Maryland, and Virginia have all passed laws allowing injured people and their lawyers to know the wrong doers insurance policy limits without having to file a lawsuit.  The three statutes promote the public policy that for people who are seriously injured, disputes will be resolved much more quickly when both parties know how much insurance coverage is available.  Here are the details on each statute:

Washington, D.C.

In DC, the law giving an injured person a right to know the insurance policy limits is DC Code § 31-2403.01.  This statute just went into effect in April of 2013, so it’s pretty much a brand new law.  (It is so new that, as of this date, it hasn’t been incorporated with the open-source DC Code yet.)  The law applies to people who were involved in vehicle accidents (either driving a vehicle or struck by a vehicle) and also to bicycle accidents (if you were riding a bicycle, or struck by a bicyclist).  The injured person or her attorney must provide certain details about the incident to the insurance company, including the date, name of the wrongdoer (tortfeasor in lawyer-speak), a copy of the accident report, the insurer’s claim number, documentation of bills or out-of-pocket expenses, and medical records.  Then, within 30 days, the insurer must reveal the policy limits available under all policies that may cover the person’s damages.  Even if the insurance company intends to contest the coverage or the person’s injuries, it must still reveal the policy limits. 

Maryland

The law in Maryland that provides an injured person with the right to discover the insurance limits is Maryland Courts and Judicial Proceedings §§ 10-1101, 1102, 1103, 1104, and 1105.  The law in Maryland is almost exactly the same as in DC.  In fact, if you read the statutes, it’s quite evident that DC just copied the text of the Maryland law for the most part (the Maryland law was enacted in 2011, so it came before DC’s).  However, there is one key difference that is quite significant.  In Maryland, the injured person’s medical expenses and lost income must add up to at least $12,500 before the insurer must disclose the insurance policy limits.  DC’s law does not include a threshold amount.   So this law only provides the right to know the policy limits to those who suffered significant injuries. 

Virginia

Virginia has substantially the same law on this topic as Maryland (although, Virginia was the first local jurisdiction to pass this law, way back in 2008).  Virginia Code § 8.01-417 provides that if an injured person has at least $12,500 in medical bills and lost wages, she can demand to know, and the insurer is required to disclose, the limits of liability under the insurance policy within 30 days of the demand.  Similar to the two laws above, the injured person must provide basic information about the accident and her injuries, including medical records and accident reports. 

Our office has used all three of these laws to require insurance companies to reveal the tortfeasor’s limits of liability.  Since these laws have been enacted in the last few years, there are still many insurance adjusters who are not aware of them.  At this time, these laws have not received any direct appellate court review or interpretation.  However, in reading over the statutory text, I predict that there will be future litigation in two areas: (a) consequences for insurers for failing to make adequate, complete, or timely disclosure, and (b) the extent and completeness of the information the injured person must provide in order to trigger the insurer’s duty to disclose.  For example, what happens when the insurer doesn’t respond within 30 days or when the insurer reveals an automobile policy, but not an additional umbrella policy?  Can a failure lead to a claim for bad faith?  With respect to the injured person’s request, if the information is insufficient or incomplete, when can the insurer deny disclosure?   Currently, these questions are unanswered.  We will definitely keep an eye on the courts to see if these disputes come up.  But in the meantime, these laws provide a sensible way to reduce the amount of time and effort needed to resolve injury claims without litigation.

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