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Colorado Insurance Blog

5 Real-Life Insurance Claims

Many agents will give you the same generic scenarios when discussing liability limits. Or worse, they won’t talk to you about the importance of liability coverage at all, or how an Umbrella Policy could really help.

It’s hard to imagine being responsible for hundreds of thousands of dollars in damages. Especially if you don’t see insurance claims on a daily basis.

We wanted to give you some actual examples of claims that have been filed through our agency in the past few years. These are just a few examples that show why it’s dangerous to have low liability limits. You may save a few dollars a month, or even a few hundred a year, but you could be on the hook for tens of thousands after a claim.

Here are 5 actual claims that have been filed through our agency:

Claim #1

What happened?

The insured had a dog watcher at his home and he was showing her how to feed the dog while he was away. When she bent down, the dog bit her face. This left her with permanent facial scars, decreased smile strength and slurred speech.

What was the result?

  • The claimant obtained an attorney and the attorney asked our client’s home insurance provider for $1.5 million. No payout has been issued as of the date this was written.
  • The home policy has a liability limit of $300K. That is the most his insurance policy will payout. The insurance company will provide a legal team to fight on his behalf, with the hopes of keeping the judgement against the client to $300K or below.
  • If the judgement goes over the $300K limit, the client will be responsible for paying the rest out of pocket.

Claim #2

What happened?

The insured rear-ended a vehicle that was stopping in traffic. The force pushed that vehicle into another vehicle that was already stopped.

What was the result?

  • At least one of the parties involved suffered injuries and obtained an attorney. The liability limits on the policy were $100K per person, $300K per accident and $100K for property damage.
  • The total payout was more than $121,000, including injuries and damage to the vehicles.
  • If our client had state minimum limits, they would have been left paying over $50K out of pocket. That could have resulted in their wages being garnished and a lien on their home.

Claim #3

What happened?

The insured ran a stop sign and hit the claimant vehicle that was turning left. There were 3 people in the other party’s vehicle that sustained injuries. 

What was the result?

  • Two years after the initial accident and after the claim was already closed, the insured was served a lawsuit by the 3 injured parties. One driver was suing for $133K in injuries, the other 2 were suing for $113K each. 
  • The insured’s liability limits were $100K per person and $300k per accident. The insurance company provided a legal team and fought to settle the claim within the policy limits.
  • In the end, the insurance company paid the maximum amount of $300K for the accident. The insurance company also paid out over $6K for property damage to the other party’s vehicle.
  • If the insurance company hadn’t reached a settlement, the client could’ve been on the hook for paying the rest out of pocket.
  • It’s good news for this client that everything was covered, but it doesn’t always end this way. Every situation is different and having an Umbrella Policy is a wise choice.

Claim #4

What happened?

The insured was turning left in a dual turning lane and changed lanes while turning. As a result, the insured hit the claimant’s vehicle. Despite the accident occurring at a slow speed, the claimant got injured and hired a lawyer. 

What was the result?

The insured’s liability limits were $100K per person and the insurance carrier paid out that full amount. They also paid over $6,700 for property damage to the claimant’s vehicle.

Tip: No matter how minor the accident, lawyers will most likely get involved. Make sure your liability limits make sense for your situation.

Claim #5

What happened?

The insured was smoking a cigarette and placed it into a planter to put it out. It wasn’t fully out when she left and started a fire that caught a gas line. The fire spread to 20 other units in the condo complex. Three people and several pets were injured.

What was the result?

  • It has been over 2 years since the fire and the insurance company has paid out over $135K to rebuild the insured’s condo.
  • Many of the other condo owners hired attorneys and the legal battle is ongoing.
  • The insured’s policy had a liability limit of $500K. That’s the most the insurance company will pay out if the insured is deemed liable for the damages.
  • If the judgement goes over the $500K limit, the client will be responsible for paying the rest out of pocket.

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