Car insurance is required in most states. It is a contract between you and your insurance provider where you agree to pay a monthly premium and, in exchange, the insurance company agrees to pay your losses in the event of an accident so long as they’re covered by your insurance policy. Some states impose severe penalties if you are involved in a car accident and don’t have auto insurance.
What Does Automobile Insurance Cover?
Auto insurance coverage depends on the type of policy you purchase. There are six primary types of coverage included in your policy. They include the following:
- Liability coverage: Liability coverage is mandatory in most states, and drivers are legally required to purchase a minimum amount of liability coverage set by state law. Liability coverage includes bodily injury liability, which helps pay for costs related to another person’s injuries if you cause an auto accident, and property damage liability, which helps pay for property damage caused by your accident.
- Uninsured and Underinsured Motorist Coverage: If you’re hit by a driver who is either uninsured or underinsured, this coverage will help pay for medical bills or, in some states, repairs to your vehicle as a result of the accident. This type of coverage is required in some states and optional in others.
- Comprehensive Coverage: This type of coverage can cover damage to your car from theft, vandalism, fire, or natural disasters. It is optional coverage.
- Collision Coverage: If you’re in an accident with another vehicle, or you hit an object, collision coverage can help pay to repair or replace your car. It’s typically optional.
- Medical Payments Coverage: Medical payments coverage can help pay for injuries caused in an accident. It is required in some states and optional in others.
- Personal Injury Protection: This type of coverage is only available in some states, but it can also help pay for your medical expenses after an accident. It is required in some states and optional in others.
Examples of Car Insurance Conflicts
- Car insurance conflicts can arise for any number of reasons, including:
- Insurance company denies payments or coverage in the event of an accident
- Issues with insurance fraud
- Disputes regarding car insurance rates
- Liability issues between drivers and other passengers
- Cancellation disputes
- Breach of contract by either party
- Conflicts of interest with the insurance company
Suing Your Insurance Company
Car insurance companies must follow a vast array of laws to ensure that they are not abusing their power and position and taking advantage of their customers. The laws are especially stringent because most states have minimum car insurance requirements. The two general legal principals that commonly arise are consumer protection and contract law.
Some common insurance claims include:
- Bad Faith: Bad faith encompasses many claims against insurance companies, including misrepresentations of coverage and benefits, unnecessarily or intentionally delaying the claims process, unscrupulous efforts to settlement claims unfairly, and advising policyholders not to hire a lawyer.
- Unfair Competition: The exact definition of unfair competition will vary, but it generally means "any unlawful, unfair or fraudulent business act or practice." Many unfair competition laws also encompass unfair, deceptive, untrue or misleading advertisings.
- Antitrust: These laws are designed to regulate the way companies charge consumers. It helps regulate businesses and promotes fair competition for the benefit of the consumers.
- Breach of Contract: A breach of contract lawsuit against an insurance company typically only requires a policyholder to show the insurance company did not follow the terms of the policy. In fact, many states create presumptions that favor of the policyholder in the event of a dispute.
Whether you can file any of these claims depends on the state where the policyholder lives.
Contacting an Attorney
If you believe you need to file a claim against your insurance company, it is best to contact a personal injury attorney. Insurance companies will occasionally deny a claim that they should have paid for. If this happens to you, you'll probably have to sue the insurance company for bad faith. You might also have to sue the other driver. Having an attorney on your side who is knowledgeable about the laws in your state can help you favorably negotiate your claim and ensure the insurance company covers your claim.