I was involved in a serious auto accident, and I was found to be at fault. My adjuster has asked whether it’s okay to disclose my policy limits to the attorney representing the other party. What do you think?
In California, if your insurance company receives a demand to disclose your policy limits, it is required to contact you and get your permission to release that information.
Some attorneys and insurers argue that withholding the limits discourages frivolous claims, since the other party will need to file suit to find out your limits. In the interim, this may give your insurance company a tactical advantage, since it forces the other party to negotiate and make a demand without knowing what limits are potentially available to address the damages being claimed.
On the flip side, disclosing the limits may encourage the other party to present a reasonable settlement demand, and reduces the need to engage in full-scale litigation in order to resolve a claim.
If you decide to disclose your limits, you’ll probably also need to disclose whether you have an excess liability or umbrella policy, as well as the limits of that policy. Intentional concealment of your excess limits is a misrepresentation, or a lie of omission, and is contrary to the principles of good faith and fair dealing.
Whether or not you choose to disclose your policy limits, keep in mind that the value of the case is not affected by the amount of insurance available to address the damages. In other words, just because you have a policy limit of $1,000,000 doesn’t mean that the other party’s damages are worth $1,000,000, or that your insurance company will agree to pay that amount.
If, after reading this, you’re still agonizing about whether to disclose your policy limits, it’s recommended that you talk to an attorney who is familiar with personal injury claims and can counsel you with your specific situation in mind.