One of the most important pieces of information is how much insurance coverage the at-fault party carries, the policy limit. Whether that limit is discoverable (i.e., whether a claimant or their attorney can legitimately ask for, and receive, disclosure of the policy limits before suit) varies significantly from state to state.
Below is an overview of what “policy limit discovery” means, why it matters, and a survey of how a few states handle it, illustrating the variation that attorneys and claimants must navigate.
What are policy-limit discovery / pre-suit disclosure laws?
“Policy limit discovery” or “pre-suit policy limit disclosure” refers to laws, statutes or rules that govern whether (and under what conditions) an insurer must reveal the liability limits of an insurance policy (and sometimes a full copy of the policy) to a third-party claimant (or their attorney) before a lawsuit is filed.
Key features vary widely, including:
Who may make the request (just the insured, the insurer, a third-party claimant, their attorney)
What is required in the request (accident date, insured name, claim details)
What the insurer must disclose (just limits, plus umbrella/excess policies, full policy documents)
Time-frame to respond (e.g., 30 days)
Confidentiality or admissibility of the disclosed information in trial
Whether disclosure constitutes an admission of liability
State enforcement mechanisms and penalties for non-compliance
Why it matters: If a claimant knows the policy limits early, it may influence settlement strategy (pressuring the insurer/insured to settle within limits). Policy Limit Discovery, From the insured/insurer side, nondisclosure might lead to exposure beyond policy limits or accusations of bad faith. For example, one source notes: “In some cases, a statute literally prohibits the revelation of policy limits at the pre-suit stage. For example, in California …”
Selected State Comparisons
Below are selected states showing contrasting approaches. This is not exhaustive — many states have no statute, or only case law, or very limited disclosure duties.
Colorado
In Colorado, the law is relatively strong in favour of disclosure. Under C.R.S. § 10-3-1117 (effective January 1, 2020), insurers writing commercial or personal auto policies must respond to a written request by a third-party claimant or their attorney with:
(1) the name of the insurer; (2) the name of each insured as appears on the declarations page; (3) the limits of liability coverage; and (4) a complete copy of the insurance policy including endorsements. This requirement helps claimants know early what the maximum coverage is, thus enabling settlement strategy around the policy limit.
New Jersey
In New Jersey, the law is comparatively new, enacted in 2022. Under N.J.S.A. 39:6B-1.1, an insurer who receives a written request from an attorney admitted in the state must provide written disclosure of all applicable insurance policies (including umbrella/excess) issued to the insured, no later than 30 days from receipt of the request.
The request must include (among other things) the attorney’s representation of a person injured, the name/address of the insured, date/time of the accident, accident report copy if available. Importantly, the statute says that disclosure “shall not constitute an admission that the alleged injury or damage is subject to the policy,” and that the disclosure is confidential and not admissible at trial just because it was made under this statute. This approach places disclosure duty on the insurer upon request, but only from an attorney (not necessarily the claimant directly) and subject to strict form requirements.
California
In California, the landscape is quite different. There is a strong privacy policy in its insurance code (Insurance Code § 791.13(a)) and under the Insurance Information and Privacy Protection Act. One commentary notes that “the terms of an insurance policy … require the insured’s written consent before revealing policy limits.” Thus, pre-suit disclosure of policy limits is effectively restricted unless the insured consents. This means a claimant may not have a statutory right pre-suit to demand limits.
Other states / the landscape generally
A helpful 50-state chart (via MWL-Law) covers which states require or allow pre-suit disclosure of liability policy limits in third-party claims. Many states do not impose statutory disclosure duties; some have case law; others only require disclosure during discovery after suit is filed. According to one source: “In some cases, a statute literally prohibits the revelation of policy limits at the pre-suit stage.”
Patterns and Key Differences
From these examples and broader research, several recurring themes and differences emerge:
Who may request:
Some states allow the claimant or their attorney to request disclosure (New Jersey: attorney only).
Others allow third-party claimants (Colorado) broadly.
Some states restrict disclosure unless the insured consents (California).
What must be disclosed:
Merely limits of liability coverage (Colorado, New Jersey).
Also umbrella/excess policy information in many jurisdictions (NJ requires umbrella/excess).
Full copies of the policy (Colorado requires).
In states without statute, only the declarations page or policy may be disclosed during litigation.
Time-frame and response:
30 days from receipt of a compliant request is common (NJ, Colorado).
Some statutes specify “within 30 days” after written request.
Penalties or consequences for non-compliance vary or may be lacking in some states.
Effect of disclosure:
Many statutes clarify that disclosure is not an admission of liability (NJ).
Confidentiality and nondisclosure of the disclosed info in trial may be specified (NJ).
The strategic effect: knowing the limit may pressure settlement before reaching or exceeding the limit.
No statutory duty or restrictive duty:
Many states leave disclosure entirely up to the insurer/insured until discovery in litigation.
States may even expressly prohibit pre-suit disclosure (implicitly or by case law).
Thus, claimants must carefully assess the applicable state law or practice.
Implications for Claimants, Insurers and Insureds
Claimants/Attorneys: In states with disclosure statutes, requesting policy limits early can inform strategy: how hard to push, whether settlement within the policy limit is feasible, etc. If limits are low, the claimant may accelerate litigation or pressure settlement before excess risk occurs. In states without such statutes, claimants face more uncertainty.
Insureds/Defendants/Insurers: Non-disclosure in a state where statute demands it could expose the insurer (and insured) to claims of bad faith or risk of the opposing party driving up expenses not knowing the limit. Transparent policy limit disclosure may reduce the risk of the claimant filing a high demands or hitting the limit without realizing it.
Jurisdictional risk: Because state laws differ so widely, when a claim crosses state lines (or involves parties insured in one state but claim in another) practitioners must verify which law applies: the insurer’s domicile, the state where the accident occurred, or where the insured is domiciled.
Strategic considerations: Disclosure of limits is just one piece — it doesn’t determine the liability or value of the claim. But knowing the maximum available may change the dynamics of negotiation and litigation. For insureds, low limits might create greater personal exposure if the claim exceeds the policy.
Why Focus on Policy Limits Discovery?
The trend toward disclosure laws reflects several pressures:
Transparency and fairness: Claimants argue they should know the maximum available before committing legal resources.
Settlement dynamics: When insurers know claimants know limits, they may settle earlier rather than risk going to trial and hitting the limit.
Litigation risk: Insurers face risk if the insured has minimal coverage and the claimant does not know the limit — large verdicts may exceed the limit and result in excess exposure.
Legislative evolution: As seen in New Jersey’s 2022 statute, states are increasingly adopting explicit pre-suit disclosure laws.
Conclusion
The landscape of policy-limit discovery laws by state is highly variable. While some states (like Colorado) impose fairly robust disclosure duties, others (like California) restrict or limit pre-suit disclosure, and many states fall somewhere in between or have no statute at all. For practitioners, insurers, claimants, and insureds alike, understanding the local law is crucial because the knowledge (or ignorance) of policy limits can significantly affect strategy, settlement leverage, and exposure.
