insurance poilcy limit For attorneys, claimants, and insurance professionals alike, determining these limits can shape negotiation strategies, settlement expectations, and even the overall litigation approach.
Conducting a legal policy limit search isn’t always straightforward. Insurers are often reluctant to disclose their limits voluntarily, and laws governing disclosure vary from state to state. However, with the right combination of legal tools, communication techniques, and investigative resources, it’s possible to uncover or compel disclosure of this vital information.
This article explores how to effectively conduct a policy limit search in insurance claims—legally, ethically, and strategically.
Understanding What Policy Limits Mean
A Legal Policy Limit Search is the cap on what an insurance company will pay for a covered loss. For example:
In auto liability insurance, a policy may have limits of $100,000 per person and $300,000 per accident.
In homeowner’s insurance, there may be separate limits for dwelling, personal property, and liability.
In commercial policies, general liability, professional liability, and umbrella coverage each carry distinct limits.
These limits determine the insurer’s exposure and can affect how aggressively they defend or settle a claim. If damages clearly exceed the policy limits, it can motivate an insurer to settle within those limits to avoid potential bad faith liability.
Why Conducting a Policy Limit Search Is Important
Before entering negotiations or deciding to file a lawsuit, it’s essential to know the available coverage. Conducting a policy limit search allows claimants or attorneys to:
Assess Settlement Potential: Knowing limits helps gauge how much compensation may realistically be recovered.
Avoid Over-Litigation: If the at-fault party’s coverage is low, pursuing lengthy litigation may not be cost-effective.
Evaluate Bad Faith Risks: If an insurer refuses to disclose limits or fails to settle within them when warranted, it may open itself to bad faith exposure.
Identify Additional Coverage: A search can reveal umbrella policies, excess policies, or secondary coverage that increase available recovery.
Step 1: Request Disclosure from the Insurer
The most direct approach is often the best place to start—ask the insurer to disclose the limits. Attorneys representing claimants should send a written policy limit demand letter to the insurance adjuster handling the claim.
A proper letter should:
Identify the claimant and insured parties.
Describe the incident and claim.
Clearly request disclosure of all applicable insurance coverage and limits.
Cite relevant state laws or regulations that compel disclosure (if applicable).
In some states, insurers are legally required to disclose limits upon written request. For example:
California Insurance Code §791.13 mandates disclosure under certain privacy exceptions.
Florida Statute §627.4137 requires insurers to provide policy details within 30 days of a written request.
New York Insurance Law §3420(f)(2) allows disclosure in motor vehicle accident cases.
If your jurisdiction does not mandate disclosure, you can still request it voluntarily. Many insurers will disclose limits early in the process to encourage efficient settlement discussions.
Step 2: Utilize Statutory or Regulatory Tools
Each state has its own insurance regulations governing what information insurers must release. Some states require disclosure of limits for third-party claimants, while others protect such information unless a lawsuit has been filed.
For example:
Georgia: O.C.G.A. §33-3-28 requires insurers to disclose policy limits upon written request, accompanied by specific details about the accident and injuries.
Nevada: NRS 686A.310 makes it an unfair claims practice to withhold information about coverage when requested by an insured or claimant.
Illinois: While no direct statute mandates disclosure, discovery rules may compel it once litigation begins.
Attorneys should review state-specific laws or Department of Insurance bulletins for precise guidance. When applicable, referencing these statutes in your correspondence adds legal weight to your request.
Step 3: Conduct a Public Records and Database Search
Even if an insurer refuses to disclose voluntarily, useful information can often be gathered from public records and industry databases.
Key sources include:
DMV and Accident Reports: Some states’ motor vehicle departments include insurance carrier information on accident reports. While limits are not listed, knowing the insurer helps narrow the inquiry.
Court Filings: If the insured has been involved in prior litigation, court records may reference insurance policies or settlements.
Secretary of State Filings: For commercial entities, public business filings may list insurers or certificates of insurance.
Third-Party Databases: Some private investigative services specialize in insurance data searches, such as ISO ClaimSearch or proprietary policy-tracking systems used by law firms and claims professionals.
Always ensure any database or service used complies with privacy and consumer protection laws, such as the Fair Credit Reporting Act (FCRA).
Step 4: Leverage Discovery Tools in Litigation
If pre-litigation methods fail, formal discovery procedures become your next option. Once a lawsuit is filed, most jurisdictions require the defendant—or their insurer—to disclose applicable insurance policies.
Under Federal Rule of Civil Procedure 26(a)(1)(A)(iv), parties must provide:
“Any insurance agreement under which an insurance business may be liable to satisfy all or part of a possible judgment.”
This rule applies automatically, without a separate discovery request, and includes both policy documents and coverage limits.
In state courts, similar rules apply. Many states have adopted their own versions of Rule 26, obligating defendants to produce policy information early in litigation. Attorneys can also serve targeted interrogatories or requests for production specifically asking for:
The name of each insurer.
Policy numbers.
Effective and expiration dates.
Each applicable coverage limit.
Step 5: Investigate for Umbrella or Excess Policies
Standard policy limit searches often overlook excess or umbrella policies, which can significantly increase available recovery. These policies sit “on top” of underlying coverage and may only come into play after the primary limits are exhausted.
To uncover them:
Ask the insurer directly if additional coverage applies.
Include questions about excess policies in discovery requests.
Review financial disclosures, especially for businesses or high-net-worth individuals.
Search prior claim history or asset reports, which may indicate the presence of higher coverage tiers.
Failing to identify excess coverage can result in undervaluing a claim or missing potential sources of recovery.
Step 6: Use Subpoenas and Depositions if Necessary
When insurers remain uncooperative, subpoenas and depositions may compel disclosure. For example, a subpoena duces tecum can be issued to the insurer to produce policy documents. In depositions, you can question the insured or adjuster directly about existing coverage.
Be mindful, however, that courts may limit such discovery to prevent harassment or protect confidential information. Always demonstrate that the request is relevant, proportional, and necessary for the claim.
Step 7: Maintain Ethical and Confidentiality Standards
While pursuing policy limit information, claimants and attorneys must comply with ethical and legal standards.
Avoid using deceptive tactics or misrepresentations when communicating with insurers.
Protect sensitive information obtained through discovery, as insurance policies can contain private or proprietary data.
Ensure all correspondence is professional and compliant with applicable privacy statutes.
Remember, insurers are more likely to cooperate when they trust that information will be handled responsibly.
Conclusion: Combining Strategy and Persistence
A Legal Policy Limit Search is both a legal process and a strategic negotiation tool. It requires persistence, familiarity with state laws, and a careful balance between assertiveness and professionalism.
By systematically:
- Requesting disclosure in writing,
- Citing legal authority,
- Leveraging public records and databases, and
- Using formal discovery tools when needed,
you can usually obtain the information necessary to evaluate and resolve an insurance claim efficiently.
Ultimately, knowing the policy limits early empowers both sides to negotiate more transparently, avoid unnecessary litigation, and ensure fair outcomes under the law.
