One of the most critical steps in evaluating and settling a case is understanding the defendant’s insurance coverage. Policy limit verification is an essential practice that ensures attorneys and their clients are fully informed about the financial resources available to compensate for injuries.

Failing to verify insurance policy limits accurately can result in missed opportunities, under-compensation, or even exposure to liability if claims exceed available coverage. This article explores best practices for policy limit verification for personal injury attorneys, offering practical guidance to maximize recovery while mitigating risk.

Understanding Policy Limit Verification

Policy limit verification is the process of confirming the maximum amount an insurance company is obligated to pay under a liability policy. This involves determining the specific coverage available to a defendant, including general liability, auto liability, umbrella policies, and any other relevant insurance products. The goal is to identify the ceiling of potential recovery from the insurance company, enabling attorneys to make informed strategic decisions about settlement demands, litigation, or negotiation.

Verification of policy limits is particularly important in personal injury cases because many claims involve substantial damages, including medical expenses, lost wages, pain and suffering, and future care costs. Attorneys must ensure that any settlement demand does not exceed the defendant’s policy limits without exploring alternative recovery sources.

Why Policy Limit Verification Matters

Avoiding Undercompensation
Without verification, attorneys risk settling a case for less than the defendant’s available insurance coverage. Knowledge of policy limits allows plaintiffs to maximize compensation without unnecessary concessions.

Preventing Personal Liability
In some jurisdictions, if an attorney encourages a client to accept a settlement exceeding available insurance coverage, the client may hold the attorney partially responsible for unpaid claims. Proper verification helps mitigate such risks.

Informing Negotiation Strategies
Knowing the policy limits provides a clear framework for settlement negotiations. Attorneys can strategically demand amounts that align with the maximum recoverable under the policy, avoiding prolonged disputes or rejected offers.

Identifying Multiple Insurance Layers
Many defendants carry multiple policies, including primary and excess coverage. Verification ensures attorneys are aware of all applicable coverage layers, which can be crucial in high-value claims.

Best Practices for Policy Verification

1. Obtain Direct Confirmation from Insurers

The first and most reliable method of policy verification is obtaining direct confirmation from the insurance company. Attorneys should request a written statement or a “certification of coverage” that details:

Policy number

Policy period

Named insured and covered parties

Coverage limits for liability, medical payments, and other relevant endorsements

Deductibles and exclusions

Written confirmation provides legal evidence of coverage, which is especially useful if disputes arise during settlement or litigation.

2. Review the Insurance Policy in Detail

Beyond obtaining a summary from the insurer, personal injury attorneys should request and review the full insurance policy. This allows the attorney to:

Identify exclusions or limitations that may affect coverage

Verify the applicability of coverage to the incident in question

Assess any endorsements or riders that may increase or decrease limits

A thorough review ensures that settlement strategies are based on accurate information, minimizing the risk of surprises after the fact.

3. Investigate Multiple Policies

High-value defendants often carry multiple insurance policies, including umbrella or excess policies. Attorneys should:

Request evidence of all insurance policies applicable to the claim

Determine the hierarchy of coverage, including which policy serves as primary and which as excess

Verify aggregate limits, especially for umbrella policies

By considering all available coverage layers, attorneys can more accurately estimate the total potential recovery for their clients.

4. Consider Policy Limit Increases

Insurance policies are sometimes renewed with increased limits or purchased after an incident but before a claim is filed. Attorneys should:

Verify the policy period and effective dates

Confirm whether any endorsements, riders, or supplemental coverage applies to the incident

Being aware of potential policy increases or modifications can provide opportunities for higher recovery.

5. Document All Verification Efforts

Maintaining meticulous records of all verification communications is essential. Attorneys should:

Save emails, letters, and statements from insurers

Document phone conversations with dates, names, and a summary of discussions

Keep a chronological record of verification efforts

This documentation can serve as evidence of due diligence, protecting the attorney and client in case of disputes over settlement amounts or claims handling.

6. Use Professional Verification Services When Necessary

In complex cases, it may be beneficial to use professional insurance verification services. These services specialize in:

Contacting multiple insurers to confirm coverage

Reviewing policies and endorsements for potential gaps

Identifying excess and umbrella coverage

Such services can save time, reduce errors, and ensure comprehensive verification in cases involving multiple defendants or high-value claims.

7. Maintain Ongoing Communication

Insurance coverage may change during the course of litigation. Attorneys should maintain ongoing communication with insurers to:

Verify that coverage remains in effect

Monitor any changes in policy limits, endorsements, or exclusions

Ensure that any settlement offers align with current coverage

Proactive communication reduces the risk of surprises and helps attorneys adapt settlement strategies accordingly.

8. Incorporate Verification into Case Strategy

Policy verification should not be a standalone task but integrated into the overall case strategy. Attorneys should:

Align settlement demands with verified policy limits

Evaluate whether filing suit or negotiating is the most strategic option based on available coverage

Consider policy limits when assessing the likelihood of collecting damages beyond what the insurer may pay

Integrating verification into strategy ensures that attorneys maximize their clients’ recovery while mitigating financial and legal risks.

Conclusion

Policy limit verification is a critical practice for personal injury attorneys. Proper verification not only maximizes potential recovery for clients but also reduces liability risk for attorneys and supports informed negotiation and litigation strategies.

By obtaining direct confirmation from insurers, reviewing full policies, investigating multiple coverage layers, documenting verification efforts, and maintaining ongoing communication, attorneys can ensure that they are fully informed about the resources available to their clients.