Expert Commentary

Defuse Anger To Secure an Insured's Cooperation

Insurance policies require that the insured cooperate with the insurer in the defense of a liability case. But sometimes friction between the insured and the adjuster can disrupt the endeavor. When that happens, an adjuster should take steps to defuse the situation and regain the insured's cooperation, rather than use it as a reason to deny coverage.

May 2010

In Global Liberty Ins. Co. v. Ubini, 18 Misc. 3d 1141A, 859 N.Y.S.2d 894 (Sup. Ct. Nassau Cty. 2008), a cabbie was involved in an accident in which another driver was injured. He notified his broker, who notified the insurer within a couple of days. At some point, the cabbie sought coverage under his business auto policy.

Thirteen months later, the adjuster sent a special investigator (a retired police officer) to the cabbie's residence to get additional information. Arriving unannounced, the investigator knocked on the front door. When the cabbie answered, the investigator told him he needed to speak with him about the accident. The cabbie was reluctant to talk because he did not know who the investigator represented. In response, the investigator called the cabbie "stupid" and told him if he didn't cooperate he would be sued. He demanded to take a statement right there.

At this point, their accounts differed as to what happened. According to the investigator, the cabbie got angry and began throwing punches at him. He testified that he drew his gun, aimed it at the cabbie in self-defense, and backed down the stairs. According to the cabbie, the investigator put a gun to his ribs and said, "I will shoot you, and you will spend your life in a nursing home." Later, the cabbie called the police, but the investigator was apparently not arrested.

Following the altercation, the cabbie called his broker and found out that the investigator had been sent by the adjuster. He called the adjuster and left a very angry voicemail, claiming the adjuster sent someone to "assassinate" him. The call concluded by the cabbie saying the adjuster should "go #### himself."

Even though his investigator filed a report stating that he pulled a gun on the cabbie, and even though the cabbie left an angry voicemail about the incident, the adjuster did not do anything to defuse the situation. He sent a standard reservation of rights letter, which did not mention the altercation. The letter instructed the cabbie to contact the adjuster to provide details of the accident. When the cabbie ignored the letter, the adjuster denied coverage for lack of cooperation, then filed this action seeking a declaration that the insurer had no duty to defend the cabbie in the underlying liability case.

But the court held that it was the insurance company that breached its duties under the policy, not the cabbie. Under New York law, an insurer claiming that a policyholder breached his contractual obligation to cooperate must first prove that it acted diligently in seeking such cooperation, and that its efforts were reasonably calculated to secure it.

Here, it was readily apparent that the procedures employed by the investigator "were not of the kind designed to secure the cooperation of anyone." He acted in an "erratic, unusual, and shocking [manner]." After becoming aware of the incident, the adjuster's failure to address the situation demonstrated that the insurer did not act diligently in seeking the cabbie's cooperation. Therefore, court held that the claim denial was "improper and unfounded," and it ordered the insurer to assume the defense.


Chances are that an investigator will probably not go so far as to pull a gun on the insured. Still, less serious disputes can lead to anger and outraged feelings that impede the working relationship between the insured and the adjuster. Before denying coverage for lack of cooperation, an adjuster should address the problem, assuage the insured, if necessary, and make a diligent effort to regain the insured's cooperation.

Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.

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