Who is liable for a bill that insurance doesn’t cover?

UPDATED: Jan 23, 2011

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Who is liable for a bill that insurance doesn’t cover?

My insurance agent made deal with a tree service to remove a fallen tree and garage that fell in my yard; he told them to send him the bill. I told the agent that I could not afford the bill of $2600 (I have a deductible of $2500). The agent told me not to worry about it. I don’t have a contract or anything in writing to say that I agreed to pay $2600. Insurance only paid me $500 which I paid the tree service. Am I stuck paying the rest of the bill out of my pocket or can they sue me (even though there was nothing in writing on the amount)? The agent made the deal; I wouldn’t have had them do it if I knew that insurance paid only $500. Agent is an independent insurance broker.

Asked on January 23, 2011 under Bankruptcy Law, Nebraska


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

IF the agent contracted with the service, then the agent (and/or the insurer, and/or his brokerage) is responsible. However, if you contracted with the service, then you are responsible. If you were the one who told the tree service to go ahead, then even if you did it based on the agent's's recommendation or assurances, then you're probably the one who contacted with them and who is responsible to pay them. That may still enable you to claim against the insurer, brokerage, or agent for the balance, on either contractual grounds or "promissory estoppel" grounds (you took an action to your detriment, incurrening a cost, based on their representation or promise); however, as a practical matter, it may be difficult to do this if you have nothing in writing and no evidence of any agreement or promise.

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