Attorneys Christian A. Cavallo and Thomas M. Wester from Goldberg Segalla’s Global Insurance Services group wrote in Law360 about recent legislation passed in New Jersey requiring insurers to disclose their policy limits to third-party claimants without a lawsuit being filed.
They begin the article by defining that the statute “… requires automobile insurers to disclose policy limits in response to a written request for that information from a licensed New Jersey attorney representing an injured claimant — even if the claimant has not yet filed suit against the insured.”
Certain requirements must be met for the insurer to be obligated to provide policy limits. The request for policy limits must be written from an attorney licensed in New Jersey, and that said attorney must represent “… an individual who has suffered bodily injury or death alleged to be caused by an accident with an insured under an insurance policy issued by the insurer, entity or business.” Additionally, the request for the policy limits requires the name and address of the insured, date and time of the accident, and an accident report if available.
The article also explores potential impacts of this new legislation, such as the expectation there will be more settlements without a proportional rise in lawsuits and possible increased frequency of insurers receiving “time limit demands.” The latter, they explain, “… consist of the claimant demanding the insurer pay the full policy limits to settle claims against the insured by a unilaterally set deadline, or the claimant will file a lawsuit against the insured, pursue an excess judgment against the insured, and then seek to recover the full amount of the judgment — even the portions of the judgment in excess of the policy limits — from the insurer under a bad faith failure-to-settle theory.”
“Going forward, during these presuit negotiations, insurers will need to guard against any putative claims of bad faith, and, to the extent possible, identify meritorious claims capable of early resolution in an effort to avoid expensive and time-consuming litigation at a later date,” Chris and Tom concluded.
Goldberg Segalla is one of the premier law firms advising and representing the global insurance and reinsurance industry. Our Global Insurance Services practice group is among the largest in the United States and exists to serve insurers, reinsurers, and all others operating in the insurance arena.