If you’ve ever been involved in a legal dispute, particularly if someone is trying to sue you, you probably wanted to get out of that situation as quickly and painlessly as possible.
Sounds all well and good, but if your insurance company is involved, then an investigation will have to be done, and that investigation could take a while. No chance for a quick resolution there.
You may wonder what would happen if you didn’t involve your insurance company. What if you just settle with the company trying to sue you and put an end to it? And then just go your merry way, right?
Well, not so fast. Settling your legal dispute by going around your insurance company has the potential to do more harm than good.
Read your insurance company’s fine print
There are provisions in some insurance policies that require you to let the insurance company know about any disputes that may involve you having to pay out money.
Under the insurance agreement, the insurance company is required to defend and indemnify you, the policy holder, for any losses you experience due to a claim.
The provisions are for your benefit because they make sure that the insurance company properly investigates the claim and weighs your options, including that of a settlement.
Consequence of settling without insurer involvement
What happens if you decide to not include the insurance company and try to settle the matter on your own? You are in breach of the insurance contract and the insurance company can therefore be released from any policy obligations.
So, as much as you’d like to make your legal situation go away as fast as possible, pump your brakes and allow the insurance company to complete an investigation and you’ll be better informed to make the best decision for you.
As always, remember that it’s a smart practice to make sure your insurance company is acting in good faith in all matters concerning you.