Christin Walker, a safe driver from Burlington, New Jersey, recently experienced a car accident. Just a week after purchasing her used 2006 Honda Civic, it was totaled by a hit-and-run driver who ran a red light. Fortunately, Walker escaped without injury. However, she now faces several challenges, including no payment from any insurance company, the absence of a car, and an unpaid loan on her wrecked vehicle. Frustrated with the situation, she is considering filing a claim against the insurer of the car that hit her. If you find yourself in a similar position, you’re not alone. In the United States, approximately 6 million accidents are reported each year, resulting in around 3 million injuries or fatalities. As a result, numerous lawsuits and insurance claims are filed annually.
Filing an Insurance Claim Against Another Person
When someone crashes into your vehicle, the typical scenario involves filing a claim against your own liability insurance. This is known as a third-party claim, where you are the third party to the other driver and their insurance company. The other driver’s insurer will assess and process the claim. However, it’s important to note that quick payment should not be expected. The insurer may need to investigate the accident to establish the fault of their client.
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Using Your Own Insurance to Resolve the Issue
While filing insurance claims may seem straightforward, there are situations where you may need to rely on your own car insurance, even if someone else is at fault for the accident. Here’s how it could happen:
Situation 1: States without No-Fault Laws
In states without no-fault insurance laws, you are required to file injury claims with your own insurance first. These states mandate personal injury protection (PIP insurance) for this purpose. You can only sue another driver under specific circumstances defined by each state’s requirements. In many cases, serious injuries or fatalities must occur before pursuing legal action against the other driver. However, property damage claims can usually be made through the other driver’s liability insurance.
Situation 2: Underinsured Driver
What if the driver who caused the accident doesn’t have sufficient insurance coverage to compensate for the injuries they caused? While you can still sue them for the remaining amount, it may be impractical if they lack any assets. In such cases, you can turn to your own underinsured motorist coverage, provided you have it. This coverage can help cover medical expenses when the at-fault driver’s insurance falls short.
Situation 3: Dealing with It Yourself
Instead of dealing with the other person’s insurance company, you might choose to use your own car damage insurance. If you have collision insurance, it can be used for car damage caused by someone else. However, keep in mind that your insurance check will be reduced by the amount of your collision deductible. You may later recover the deductible if your insurance company seeks reimbursement from the other person’s insurer. Additionally, if you have rental reimbursement coverage, you can utilize it to rent a vehicle while yours is being repaired.
Situation 4: Car Loan Balance
If your vehicle is deemed a total loss in the accident, your insurance should compensate you for its value at the time of the incident, regardless of whether you file a liability claim against someone else or use your own collision insurance. However, this doesn’t necessarily resolve the issue. In some cases, the outstanding balance on your car loan or lease may exceed the car’s worth. This can occur if you financed most of the vehicle’s cost or if it has rapidly depreciated. To bridge this gap, having gap insurance can help cover the difference between the insurance payment and the loan/lease balance.
Another Option: Suing the Other Driver
If you’re dissatisfied with the compensation you receive, another way to pursue fair compensation is by hiring an attorney and suing the other driver. Establishing the other person’s fault is crucial, especially if they try to shift blame onto you. Collecting evidence such as a police report, scene photos, and witness contact information will help prove your innocence. Small claims court is also an option for relatively small settlements, typically around $3,000, where you can represent yourself. Each state has different rules and procedures for small claims court, so familiarize yourself with the process before proceeding. It allows you to present your case and compel the other driver’s insurance company to respond or negotiate a settlement.
Actions to Take at the Scene of an Accident
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Taking immediate action at the accident scene is essential to protect your rights to sue the at-fault party. Follow these steps:
First and foremost, ensure your own safety and that of your passengers. Even seemingly minor accidents can result in soft tissue injuries. If there are no injuries, try to remain calm and avoid confrontations while exchanging driver information. If possible, park your car in a safe location away from traffic and stay inside while dialing 911 to report the accident.
Exchange necessary information with the other driver involved in the accident. Provide your insurance details, and obtain theirs as well. If the other party is cooperative, they may only need the information from your insurance ID card. It’s helpful to keep a car accident checklist in your glove compartment, either printed or accessible through your insurance company’s mobile app.
Document the Scene
Use your cell phone to capture photos of the accident scene. Document the damage to your vehicle and other vehicles involved, registration details, and any contributing factors such as road conditions or traffic signals. Don’t forget to photograph the other driver’s insurance identification card. Ensure that your phone timestamps the photos, and also write down the names and phone numbers of any witnesses.
Obtain Police Information
Take note of the responding police officer’s name and badge number. Request a copy of the police report as soon as it becomes available and verify its accuracy.
Contact Your Insurance Company
Reach out to your insurance company promptly, regardless of fault. Many insurers offer convenient mobile apps for filing claims. Be mindful of your insurer’s time limit for filing a claim and submitting additional information.
Common Reasons for Auto Claim Denials
The auto insurance claims process can be frustrating, and claims are occasionally denied. Common reasons for denial include:
If the insurance company believes that the accident was avoidable or preventable—for example, allowing an unlicensed driver to operate your vehicle—they may deny the claim.
Failure to File Claims on Time
Insurance companies prefer timely claims. It’s wise to file a claim quickly before the damage worsens or witnesses become unavailable. States may set strict deadlines for filing claims, ranging from one to 20 years.
Delayed Medical Care
Postponing medical treatment for injuries sustained in an accident may raise suspicion with the insurance company, potentially leading to denial or investigation. Stick to stating the facts and avoid speculating or accepting blame at the scene. Refrain from providing excessive information during the claims process, as it may impact the outcome of your claim.
What to Do if Your Auto Claim is Denied
If your auto insurance claim gets denied, request a written explanation for the denial. Understand the precise reasons behind the denial and, if necessary, explore the possibility of appealing the decision. It could be an error on the insurer’s part or a legitimate denial due to insufficient coverage. Review the available evidence and consider submitting a letter explaining how the evidence contradicts the insurance company’s decision. If you’re uncomfortable challenging the denial alone, consult an attorney for legal advice.
Understanding Basic Types of Auto Insurance Coverage for Claims
After an accident, it’s crucial to review your auto insurance policy and verify your coverage. While your insurance agent may provide some guidance, it’s wise to familiarize yourself with the details. All auto insurance companies offer the same fundamental types of coverage. Required coverage varies by state, while the remaining options are optional. Here are the main types:
Civil Liability Insurance
Liability insurance is the most basic coverage for all vehicles, covering damages resulting from accidents caused by the insured party. Almost all states require minimum liability coverage, but the amounts differ. It’s important to assess your needs, as the minimum coverage may prove insufficient. Liability insurance also covers your legal defense in case of a lawsuit related to a covered incident. If you have substantial assets, consider obtaining umbrella insurance for added protection.
Collision insurance is optional unless necessary for an auto loan or lease. It covers damage to your vehicle if you collide with an object or another car. Approximately 75% of drivers with auto insurance have collision coverage. Collision insurance frequently includes comprehensive coverage, which protects against theft, fire, hail, vandalism, and other perils, such as hitting a deer or driving through flooded areas.
No-Fault Auto Insurance Laws
Some states have no-fault auto insurance laws, which eliminate the need to determine fault in minor injury claims. Each party involved is compensated by their own insurer without filing a lawsuit. This coverage is known as personal injury protection (PIP) insurance.
Personal Injury Protection
Personal injury protection is typically associated with no-fault laws. It covers medical expenses resulting from car accidents, regardless of fault. However, bear in mind that no-fault laws don’t eliminate the risk of lawsuits, especially in cases of severe injury or death. In such instances, a percentage of fault may be assigned to each involved party.
Whether you’re navigating an insurance claim or pursuing legal action, patience is key. Understanding your coverage and entitlements is crucial. Having the appropriate coverage from the start is essential, so choose a reputable insurance company with a good track record.