Insurance jargon can be difficult to follow, especially if you have never filed a claim against a policy. When an insurance company says that your liability has been reduced to nil, it is reasonable to question what this means in dollars and cents. Understanding the answer to this question will allow you to face your next claim with confidence.
Insurance
Paying for an insurance policy today is a payment toward financial security later when something goes wrong in your life. When something goes wrong, you expect the insurance company to pay your claim. For example, if you pay car insurance premiums for years and one day you are rear ended by an uninsured motorist, you expect the insurance company to pay to have your car repaired in exchange for your periodic payments.
Liability
Before the insurance company pays your claim, a claims adjuster may want to examine the damages and get a description of the accident. He may also want to determine if the cost to repair your vehicle is fair and reasonable based on where you live. Additionally, he may speak to witnesses and take a copy of the police report. Part of the reason for all of this documentation is to determine who is liable, or responsible, for the accident. If you are driving with inoperable taillights, he may determine that you share liability for the accident with the uninsured motorist. If this is the case, he may only approve your claim for a portion of the cost to repair your vehicle.
Nil
If the claims adjuster determines that you are partially responsible for the damage, you can present evidence to the contrary. For example, if a witness reports that your taillights were inoperable, you may present a receipt for the repair prior to the accident to show you took due diligence to ensure that your car was in proper working order. As a result, the adjuster may decide to change the partial liability decision to a liability reduced to nil decision. This means that the adjuster no longer finds you partially liable for the damage, and you are due the total cost of the car repairs.
Options
If a claims adjuster finds you partially liable for an insurance claim, ask about the appeals process. Most insurance companies do allow you to appeal a claim adjuster's decision. The policy may also contain guidelines concerning legal proceedings. Do not withhold policy payments until the case is settled unless you have another insurance policy in place. Accidents happen, and you do not want to find that you have no coverage due to lack of payment.
