Can a Car Insurance Company Sue Me?

Are You Vulnerable to a Litigation with Insurance?

The short answer is yes. Someone can sue you for damages or injuries caused by a car accident. You can be sued even if you have insurance for any injuries or damages that result from a car accident. You don’t have to worry if you have insurance. Liability coverage covers the cost of legal representation. This coverage is also known by the names Personal Injury and Property Damage coverage.

Can Car Insurance Protect You From the Courts?

Your insurance will pay for legal expenses and help you if you are sued for a car crash. There are some exceptions, but most insurance policies will cover you. There are many reasons someone could sue you.

The Most Common Reasons to File a Car Accident Lawsuit

No insurance

Drivers who don’t have insurance in the event of an accident will be forced to sue you for damages. This is one of the most common scenarios.

Inadequate insurance

A lawsuit can be filed if you don’t have enough insurance. Many states have very low minimums of liability. $25,000 for bodily injury and $50,000 for property damage. With $52,900 being the average bodily injury claim, one can see how insurance coverage limits may not provide adequate protection. The other driver can sue to recover damages that exceed these limits.

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Too Long

Delays in the claims process is the third cause of lawsuits. Each state has a different statute of limitations. This is the time limit that a person can sue before it becomes too late. To put pressure on the insurance company, the driver who is aggrieved may file a lawsuit. This also suspends the statute of limitations. Sometimes drivers will sue for pre-emptive “just to be sure” even though their insurance will cover it.

Typical Scenario

Fault State

Many states have tort-based laws. These laws determine who is responsible for an accident and what happens to liability and compensation. Drivers may sue each other as they wish. Let’s say they get a favorable judgement against you. They may be able to recover lost wages, medical bills, property damage, mental and physical pain, and suffering. The policy limits will limit the amount of insurance that can be used to cover recovery costs. They can demand payment if you don’t have enough or adequate insurance. If payment is not received, they may garnish your wages.

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Fault determination

It is not difficult to determine fault in some accidents. The case can quickly get complicated for others. Further complicating matters is the possibility that different groups could have different opinions about fault. An insurer may differ from a court, while a police officer may be more inclined to give a different opinion.

Police may file a report on an accident at the scene or afterwards. The report could include details about who was at fault and who was cited. Insurers on both sides will assign an adjuster once a driver files a case.

Insurers will interview witnesses and examine vehicle damage. They may also check details regarding the insurance policies of any drivers involved. They might also refer to the police report, but they are not required to reach the same conclusion.

The court could also decide to sue you. Sometimes, courts will dismiss police reports and label them as hearsay. Sometimes, the courts will use the person who received the citations to determine fault.

No Fault State

Drivers in no-fault states can seek compensation from their insurance coverage. This makes fault non-issue. However, there is an exception. Drivers in some states that have no fault laws may be able to sue for additional compensation. The state determines whether the damage or injury must exceed a threshold. This limit can be set by states either verbally, or financially. Verbal refers to severe injury or death; monetary covers damages that exceed a specific dollar amount.

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What do I do if someone sues me for a car accident?

Talk to a Lawyer

Although it can be costly, it is worth speaking with a lawyer to discuss the details of your case. A lawyer who is familiar with the laws of your state will save you time and money in the long-term.

Can Insurance Cover a Car Accident Lawyer?

Yes, generally speaking. Your insurer has a duty to defend you in court. These exceptions are listed below.

Exceptions to your insurance policy not providing a lawyer

No Notice Of Accident

An accident may not be reported to the insurer within the prescribed time frame. This could result in the insurer being unable to defend. Look out for language in the policy about the obligation to notify the insurer within a specified time frame. Although these windows can be shortened to 5-10 days by some insurers, most have longer windows. These rules are generally exempted for those with exceptional circumstances. You would be eligible for some amnesty if you are seriously injured or in hospital.

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Car Accident

An insurer’s duty to defend can also be void if the policyholder intentionally causes the accident. Insurance covers only negligent acts, not intentional actions. They will not cover or provide legal protection if the insured can prove intent to cause an accident.

Damages Exceed Policy Limit

Last exception: Insurers will pay for damage that exceeds the policy limits. It is possible to cost more to repair a hole in someone’s home if you have $50,000 of property damage coverage. If that happens, you would have to pay the legal bills and damages after reaching $50,000. These rules can vary from one state to the next, so it is worth consulting a lawyer.

Common Myths

I can settle my personal injuries claim with the at fault driver’s insurer company, but still sue him for the accident.

No. No. This release will protect the other driver from any future claims.

My medical bills and lost wages must be covered by the insurance of the “at fault” driver.

No. No. The at-fault driver’s insurer is not obligated to pay ongoing medical bills and lost wages. They will only pay your medical bills or lost wages if the insurer settles the case. A jury may also decide against a driver for negligence.

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I can inform the jury that the other driver is insured if I go to court.

This is generally impossible, except in very limited circumstances. The jury is not usually informed that another driver has insurance.

I can sue the insurance company of the other driver if I don’t settle my claim with them.

It doesn’t work that way. The person responsible for the accident would be sued. The lawyer would be hired by their insurance company to protect them.

My property damage claim was paid after the insurance company accepted liability and fault. They will pay my bodily injury claim and are bound by it.

No. Your property damage claim may be covered by the other driver’s insurance. However, they may not approve your injury claim. Their payment for property damage doesn’t automatically cover bodily injury if they are taken to court.

My doctor told me that an accident could have caused injury. I must be compensated by the other driver or his insurance.

This isn’t always easy. Your doctor must at the very least state that the injury was “probably” or “likely” caused by the accident. This judgment may be challenged by the other insurance.

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If the car that was involved in the accident is not owned by the driver, then the owner of the vehicle responsible for the crash is liable.

This is not always true. In general, the owner must have been involved or negligent in allowing the driver their car.