How Insurance Affects a Car Accident Case

Anyone who’s ever been involved in a car accident knows that auto insurance plays a key role in resolving any claim over the crash. Whether it's an injury claim or a vehicle damage issue, insurance will almost always be part of the picture.

But the role that insurance plays in a car accident case depends on who’s at fault and what kind of coverage each driver has. (Get the basics on settling a car accident claim.)

Do I Need Car Insurance?

If you own or drive a car, you need to have car insurance. It’s required by law in almost every state. Without it, you can’t legally operate or register your vehicle.

Each state sets its own minimum car insurance requirements—the types and amounts of coverage that must be carried. But it’s usually exactly what it sounds like: minimal insurance. That leaves some drivers underinsured.

The type of insurance you and the other drivers involved in your accident have can have a big impact on your ability to get your car fixed and your medical bills paid.

What to Do When a Car Accident Happens

At the scene of the accident, it's crucial to gather information about any person and vehicle involved in the crash:

• names
• addresses
• phone numbers
• email addresses
• insurance information
• policy numbers, and
• policyholder's name (which may be different from the driver’s name)
• the owner of the vehicle (if the owner is different from the driver), or
• the employer of the driver (if the driver was on company business at the time of the accident).

After that, you’ll want to gather as much evidence as you can, including:

• photographs of the damage
• proof of injuries
• proof of medical treatment, and
• other documentation that supports your claim.

Learn more about gathering evidence in a car accident case.

Contact Your Insurance Company After an Accident

You'll need to notify your car insurance company about any car accident you're involved in. Making a claim usually counts as reporting the accident. If you report the car accident or initiate the claim process through your insurance company's website or app, be sure you keep any confirmation email or other correspondence referencing the accident and/or your claim.

If you're making a claim, you should receive a confirmation email or letter from the claims department as well. If you don’t, contact that department directly to ensure your accident has been accurately reported.

Note that there are plenty of instances in which you won't file a claim with your own insurance company at all after a car accident, especially if you only carry liability insurance and the accident was the other driver's fault. In that situation, you'd file a claim with the other driver's insurer (assuming they're insured), or perhaps even a lawsuit.

Learn when you might also need to report an accident to law enforcement.

Working With the Other Driver’s Insurance Company

If you didn’t cause the accident, it’s usually the other driver’s insurance company that will pay to have your vehicle repaired or replaced, and compensate you for your injuries, including paying your medical bills. The other driver's insurance company will likely contact you, and you’ll be assigned a claims agent or insurance adjuster. Some companies will assign one agent to handle property damage and another to handle injury claims.

The claims agent will gather all the facts and assign a value to your claim—the dollar amount the agent thinks is reasonable. (But it might not be what you believe you deserve.) It’s the agent’s job to try to settle the claim as quickly and as cheaply as possible.

It’s common for the claims agent to ask to record your conversations with them, but you can refuse. You’re not required to provide a recorded statement. And you may want to talk with an attorney before having a conversation with the insurance company. (Learn more about talking to the other driver's car insurance company.)

If you were injured in the accident, don't be surprised if the claims agent asks you to provide medical authorizations so they can get copies of your medical records and bills. You have a right to refuse this kind of request at this point in the claim process.

You need to complete all medical treatment and fully heal or at least reach maximum improvement to understand the true cost of your injuries. So, it's usually reasonable to hold off on providing copies of medical records or bills until you’re ready to send the insurance company your settlement demand.

Remember, the other driver's insurance company doesn’t work for you—most of the time they're doing their best to limit the amount they need to pay you while keeping the case out of court.

How Your Car Insurance Policy Affects Your Case

If someone else caused your accident, why does it matter what type of insurance you have? Unfortunately, despite laws requiring that all drivers have car insurance, not everyone does. And some drivers are underinsured—that is, they have insurance, but it doesn’t offer enough coverage.

Though it's not required in most states, many insurance policies include "uninsured/underinsured motorist" coverage, which protects you if a driver with little or no insurance hits you. If that happens, you’ll work with your own insurance company to get paid for any personal injuries resulting from the crash (vehicle damage is usually a separate issue).

What Is a Car Insurance "Right of Subrogation"?

Your insurance company may send you a form called a Right of Subrogation. This form says that if your insurance company pays you any compensation under your own policy, the company then has the right to recover that money from the other driver and/or their insurance company, or anyone else who might be at fault for the accident.

For example, if you have your own insurance company pay to repair your vehicle (under your collision coverage) instead of waiting to settle a property damage claim against another driver, your company may recover that amount from the other driver's insurance company. Once your insurance company has paid to fix your car, you can’t ask the other driver or their insurer to pay you for those repairs again—except when it comes to the amount of your insurance deductible.

Sometimes the subrogation form will ask for your signature, but most of the time, it’ll just be a notice. If you’re asked to sign, go ahead and do so—it's just confirmation that you’re aware of the insurance company’s legal right.

Working With Your Insurance Company After a Car Accident

Because you have a contract with your insurance company, the company owes you a duty to act in "good faith" in negotiating with you and settling your claim. If your insurance company refuses to pay what you deserve, you can sue the company for breach of contract, and maybe even "bad faith."

Most insurers want to avoid a bad faith claim because losing is extremely expensive—in many states, courts can award "triple damages" if you prove your case against your insurance company.

Because you have a contract with your insurance company, they’re obligated to act on your behalf. But the contract works both ways.

You also have certain obligations to your insurance company. And how you handle them can affect how your claim is settled and whether you receive payment for your damages and injuries.

For instance, you’re usually required to help your insurance company obtain facts and evidence relating to your accident claim. That might mean making a recorded statement and providing additional documentation. Refusing to cooperate can cause your claim to be delayed or denied.

(Learn more about why car insurance claims are sometimes denied.)

When You Need More Help After a Car Accident

Whether you’re dealing with your own insurer or the other driver's insurer, the claims agent’s goal is to settle the claim at minimum cost to the company. That approach won't usually align with your best interest. That’s why it's usually worth it to discuss your options with an attorney.

(Learn when you might need a lawyer after a car accident.)