Our insured is above reproach. We have personally known him for 20 years. Does the insurer have the right to not pay this claim until they receive copies of original bills, or a note from some of the merchants stating the insured has purchased items from them in the past?

Illinois Subscriber

The policy does require that the insurer make payment to the insured within sixty days after receiving proof and “reaching an agreement” with him. Apparently, the insurer thinks it has not reached an agreement with your client.

The proof of loss requires that the insured submit an inventory of the lost or damaged personal property. Attached to that inventory, the policy calls for “bills, receipts, and related documents that justify the figures in the inventory.”

We understand that the insured has submitted the receipts from his new purchases. However, what the policy requires is evidence that he owned the tools.

We also understand that, from a practical point of view, very few people save such evidence. Insurers are also aware of this fact and will usually work with a client and an agent to arrive at an equitable settlement.

As the insured's agent, you need to point out again to the insurer that your client is above reproach and your long-standing relationship with him. If that doesn't work, perhaps the insured's only recourse will be legal action or to contact the Department of Insurance. While it may seem a harsh position, the insurer is technically within its rights to withhold payment, because they have not “reach[ed] an agreement” with the client.