When you file an insurance claim, your insurance company will almost always request a significant amount of information from you. Depending on the type of loss you have suffered, this type of information can typically include an estimate of your damages, an inventory if you had business or personal property coverage, and a litany of other documentation such as tax returns, leases, contracts, etc.  I’ve handled cases where there were literally dozens and dozens of separately numbered requests for documents.  You may also be requested to submit to a recorded statement or an examination under oath. How can they require this information from you and how far do you have to go to satisfy their requests?

The answer can be complicated but we should start with the language in your policy that mandates your cooperation: it is (creatively) referred to as…. Drumroll please… The Cooperation Clause. Here is a sample cooperation clause found in many policies:

Duties In The Event Of Loss Or Damage

You must see that the following are done in the event of loss or damage to Covered Property:

(5) At our request, give us complete inventories of the damaged and undamaged property, Include quantities, costs, values and amount of loss claimed.

(6) As often as may be reasonably required, permit us to inspect the property proving the loss or damage and examine your books and records.  Also permit us to take samples of damaged and undamaged property for inspection, testing and analysis, and permit us to make copies from your books and records.

(8) Cooperate with us in the investigation or settlement of the claim.

We may examine any insured under oath, while not in the presence of any other insured and at such times as may be reasonably required, about any matter relating to this insurance or the claim, including an insured’s books and records.

As you can see, the cooperation clause is quite broad and can encompass many different types of documents and information. But, does this allow your insurance company unfettered access to any information it requests? The short answer is no; requests must be material to the loss. In defining what is material, it is a fact intensive question that merits close scrutiny and knowledge of the insurance claims process.

For example, nearly 150 years ago, the U.S. Supreme Court upheld an insured’s refusal to provide information regarding settlements to an insurer.  See Ins. Cos. v. Weides, 81 U.S. 375, 20 L. Ed. 894, 1871 U.S. LEXIS 1003, 14 Wall. 375 (U.S. 1872).  In Weides, the insured had insurance with four insurance companies and they settled with all but one.  The remaining insurer demanded an examination under oath (for questions about an EUO, see my prior blog here), and the insured complied with the EUO but refused to provide information pertaining to settlements it had agreed to with the other insurers. The insured had settled with the other insurers at an average of $.54 on the dollar for the amount claimed and the current insurer desired to utilize this information in order to force the insured to settle for an amount less than what they were claiming with the current insurer.

The Court ruled that the insured was only required to answer questions that were material to the loss, and decided the questions regarding what the insured had agreed to with the other insurers was immaterial to the subject claim.  The Court had this to say:

Of course it is to be understood that the examination contemplated relates to matters pertinent to the loss. In these cases the plaintiffs did submit to an examination, but declined to answer questions respecting the amounts for which they had made settlements with other insuring companies. We are unable to perceive that the questions proposed had any legitimate bearing upon the inquiry, what was the actual loss sustained in consequence of the fire. If the plaintiffs had claims upon other insurers, and compromised with some of them for less than the sums insured, it is not a just inference that their claim against these insurers was exaggerated. A compromise proposed or accepted is not evidence of an admission of the amount of the debt. There was then no sufficient foundation laid for the instruction requested by the defendants, that if the jury should believe that the plaintiffs, or either of them, in the course of an examination on oath, under the policies, refused to answer any questions by which  the defendants could fairly estimate, or reasonably infer plaintiffs’ real loss in the insured property, and had not before the commencement of the actions answered the questions under oath, the verdict must be for the defendants.There was no evidence of refusal to answer such questions.

Ins. Cos. v. Weides, 81 U.S. 375, 20 L. Ed. 894, 1871 U.S. LEXIS 1003, 14 Wall. 375 (U.S. 1872) (emphasis added).

Most other cases around the country, including Tennessee, confirm that the insurer may only request documents and ask questions that are material to the loss.  However, many courts also recognize that the cooperation clause is broad so it is best to err on the side of caution when dealing with whether a request is material to the claim. Of course, every claim is unique and some questions may be material and the same question in the context of another claim may not be material.  It’s important to seek counsel from a qualified attorney if you feel you have a complicated issue regarding the materiality of an insurer’s inquiry.