Anyone who has ever been involved in a car accident knows the important role that automobile insurance plays in resolving property and injury claims stemming from the accident. From the beginning to the end of your automobile accident claim, insurance coverage will almost always be part of the equation. This article addresses how insurance affects an automobile accident claim. (Get the basics on settling a car accident claim.)
If you drive a car, you need to have an insurance policy. Most every state has a required minimum amount of insurance that every driver must maintain in order to lawfully operate and/or register a vehicle. The amounts of coverage in a state minimum policy vary, but are usually exactly what they sound like: minimal. The type of insurance you carry, as well as the type that other drivers involved in your accident carry, has a real impact on your ability to recover for your property loss and medical bills.
At the scene of the accident you need to obtain information about any of the other drivers involved in the accident. This means you should gather names, addresses, phone numbers, and insurance information such as the policyholder’s name and policy number. Report the accident to your own insurance company.
The at-fault driver’s insurance company is responsible for covering the costs of property damage and repair and oftentimes car rentals as well. In addition, the insurer will be responsible for compensating your for any injuries you sustained as a result of the accident.
The other driver’s insurance company will likely contact you, and you will be assigned a claims agent. Some companies may assign you one agent to handle property damage and another agent to handle injury claims. The agents' job is to gather all the facts, to assign a value to your claim, and to try to settle the claim without the need for a lawsuit.
Oftentimes the claims agent will ask you to provide a recorded statement. You are not obligated to do so and may want to seek the advice of an attorney before engaging in any lengthy conversations with the insurance company.
Don’t be surprised if the claims agent asks you to provide medical authorizations in order to obtain copies of your medical records and bills. You can and should refuse to provide these authorizations. Instead tell the claims adjuster that once you have reached maximum improvement and finished treating your injuries, you will provide a copy of all relevant records and bills as part of your settlement demand.
Remember that the at-fault driver’s insurance company does not work
for you. Most of the time the at-fault driver’s insurance company will
do its best to limit the amount it can reasonably pay you for both your
property damage and your injuries. For this reason, it is important to
gather as much evidence as you can, including proof of medical injuries
and treatment, photographs, and other documentation to support your
claim. Learn more about gathering evidence in a car accident case.
If someone else causes your accident, why does it matter what type of insurance you carry? Unfortunately, despite the legal requirements that all drivers purchase and keep car insurance, not everyone complies.
If you are hit by a person without insurance, or by someone with a policy that is insufficient to cover your losses, you will need to rely on your own insurance coverage to help you recoup your losses. Most insurance policies have a “uninsured/underinsured motorist” provision that provides you with insurance coverage if a driver with little or no insurance hits you.
If you are involved in a motor vehicle accident with an underinsured or uninsured driver, you will work with your own insurance company to obtain a settlement for both your property damage and any personal injuries.
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 is unwilling to compensate you satisfactorily, you can file suit against your insurer for breach of contract and bad faith. Many insurers want to avoid a bad faith claim because of the potential financial hit -- courts award "triple damages" in many states if a plaintiff is successful in a bad faith claim.
However, because of the contractual relationship, you also have certain obligations towards your own insurance company which can affect whether you receive compensation. For instance, most insured individuals are obligated to assist their own insurance company in obtaining facts and evidence relating to the claim, and this may mean being required to submit to a recorded statement and to provide additional documentation.