FRIDAY, APRIL 30, 2021
Does Car Insurance Cover Lawsuits?
Car accidents can be nerve-wracking all on their own, but even more so if injuries are involved. If you cause injury to another driver, passenger or pedestrian while driving, you could face a lawsuit for compensation.
Why Car Insurance Lawsuits Happen
It is not uncommon for a party to file a lawsuit against you and your insurance company after an accident. For example, if you cause an accident, the other party submits information about their losses to your liability insurer. Your insurance company may pay some of their costs. They may elect to negotiate the value. Or they may simply not issue a payment if they refute the charges.
In states that are no-fault, a lawsuit can occur if there are serious losses involved in the accident. In this situation, the individual has to prove they suffered significantly due to your actions or inaction.
What Happens When They Do?
Your auto insurance company represents you in this process. It is their goal to ensure payment occurs when fair, but that they do not overpay for losses.
Most often, the insurance company’s adjusters work with the other party. They try to negotiate a settlement. If this does not happen, the other party may decide to file a claim in a court of law. In most cases, it does not get to this point. Settlements happen first.
If it does go to court, you may not need to be present. In some cases, you do, but you will usually have legal representation provided by your insurance company. The attorney represents you and the insurance company in the lawsuit. And, if the court awards a settlement or judgment, the insurance company pays it.
Keep in mind that all policies have limits. You have coverage in this way up to the amount of coverage listed on your auto insurance contract. This is one key reason why it is so important to have high-value liability insurance in place on your plan.
Your car insurance company works with you throughout the legal process.
Steps to Take After an Accident
After an accident, there are certain steps you should take in order to protect yourself and others involved:
Check yourself over for injuries. Even directly after an accident, you may not feel pain due to adrenaline. Once you are certain that you are not bleeding or severely injured, make sure your passengers and those in the other vehicle are safe as well.
Evaluate the Danger You May Still Be In
After an accident, you may still be in danger, especially if you’re in the middle of a busy highway or if your vehicle is smoking. If your vehicle is smoking or leaking, leave the vehicle immediately and put distance between it and yourself so that you can avoid a fire or explosion. Also be wary of cars not paying attention and passing by.
Exchange information with the driver of the other vehicle(s). You will want to exchange insurance information, first and last name, the vehicle’s license plate number.
Whether or not you are in pain, encourage everyone involved—including yourself—to seek medical attention. There are internal damages that you may be unaware of, including concussions.
Filing a police report can help you when it comes to determining fault and providing your insurance agent with information in order to file a claim.
Call Your Insurance Agent
After everyone is safe and taken care of, call your insurance agent to discuss the accident. Even if you don’t plan on filing a claim, it is important to keep your insurance agent up to date in case of a future lawsuit or claim.
What to Do If You Face a Lawsuit
After notifying your insurance provider, be sure to follow their instructions on how to handle what occurs. Most companies stay in touch with you throughout the process. This keeps you informed of what is happening. Be sure to provide them with all the information you have in the case, too.
Information they may need include:
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Information about the other driver’s vehicle (plates, make, model, etc.)
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Police report if one was filed
Don’t contact the party suing you while the lawsuit is occurring. Any contact outside of the legal circumstances can be used against you.
When in doubt, seek legal counsel and speak with your insurance agent about your options.
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