Automobile insurance is a type of insurance for cars, trucks, motorcycles, and other street legal vehicles. Its primary purpose is to provide financial protection in the event of an accident, and against liability that may also result from accidents and other incidents in that vehicle.
Auto insurance is a contract between you and your insurance provider, in which you agree to pay a monthly premium. In exchange, the provider agrees to pay for your losses in the event of an accident, so long as those losses are covered by your specific policy.
In most states, auto insurance is required by law and there are fees or penalties imposed for driving without it. Auto insurance coverage is heavily determined by what policies your insurance provider offers, what policy you have purchased, and the specifics of that policy. There are six basic types of automobile insurance coverage:
- Liability Coverage: Liability coverage protects the driver who harms another driver, or their property, while operating the insured vehicle. It is mandatory in most states, and there is generally a minimum amount that must be purchased. Auto liability insurance provides two main forms of protection: body damage liability, which refers to another person’s sustained injuries if you caused an auto accident; and property damage liability, which refers to property damage resulting from an auto accident, such as damage done to the other driver’s vehicle;
- Uninsured and Underinsured Motorist Coverage: Although most states require all motorists to maintain some sort of auto insurance, there are uninsured motorists on the roads causing accidents and issues for others. Uninsured, or underinsured, motorist coverage helps protect you in the event you are involved in an accident with a driver who either has no auto insurance coverage, or not enough;
- Comprehensive Coverage: Simply put, comprehensive coverage is a form of insurance coverage that helps if you are involved in an incident that is not a collision. Comprehensive coverage will help pay to replace or repair your vehicle if it has been stolen, damaged in an event that is not a collision, or damage from things like fire, theft, vandalism, and falling objects. Financing or leasing a vehicle generally requires that you obtain and maintain comprehensive coverage, but is otherwise typically optional;
- Collision Coverage: Collision coverage can help pay for repair or replacement costs if your car has collided with an object or another vehicle, or if your vehicle has rolled over. This type of auto coverage protects your own vehicle, whereas property damage liability coverage would pay for the damage done to the other driver’s vehicle. Collision coverage is typically optional;
- Medical Payments Coverage: Medical payments coverage can be part of an auto insurance policy, and could cover your or your passenger’s medical expenses in the event of a car accident that results in injuries. You would be covered no matter who caused the accident, whether you or the other driver. It is optional and not available in all states, but is required in others; and
- Personal Injury Protection: Personal injury protection is also often referred to as PIP coverage. It is a component of an auto insurance policy that covers medical expenses related to an auto accident, regardless of which driver was at fault, and will often include lost wages coverage. It is only available in some states, while other states require PIP as a policy add-on.
The best way to avoid auto insurance conflicts is to thoroughly understand the details, coverage, and limitations of your auto insurance policy before signing a contract with the insurance provider. One of the biggest examples of auto insurance conflict is a conflict of interest, or when each driver involved in an accident is covered by the same insurance company.
Another common auto insurance conflict occurs when a suit is filed against the insured client, and that suit contains allegations that are both within and without policy coverage, or if the suit filed against insured seeks damages in excess of the agreed upon policy limits. Some other examples include:
- The insurance policy provider is denying payments or coverage in the event of an accident;
- Issues with insurance fraud, such as vehicle dumping, false registration, exaggerated repair costs, etc.;
- Disputes regarding insurance rates, such as signing a contract after being assured one rate when signing the contract and then being charged another;
- Liability issues between drivers and other passengers;
- Cancellation disputes; or
- Breach of contract by either party.
Once again, one of the best ways to avoid conflict is to ensure you are clear on the terms of your policy, and get everything in writing.
As a consumer, you are absolutely entitled to sue your own insurance company. However, you will need to prove that you have a legitimate case, and you will need to properly file a civil suit against them.
There are several laws in place to ensure that insurance companies are not abusing their power and position in order to take advantage of their clients. Further, as most states have minimum car insurance requirements, so these laws are particularly stringent.
Consumer protection law and contract law are the two main legal fields that come into play when suing an auto insurance company. Some of the more common insurance claims include:
- Bad Faith: A bad faith claim could include misrepresentation of coverage and benefits, unnecessarily or intentionally delaying the claims process, refusal to pay a claim where liability is reasonably clear, or advising policyholders not to hire an attorney to pursue their claim against the insurance provider. Improperly denied claims are one of the most prevalent examples of bad faith;
- Unfair Competition: This generally means that any unfair, unlawful, or fraudulent business act or practice. Unfair competition includes false advertising and misappropriation, and extends to unfair, deceptive, untrue, or misleading advertisements;
- Antitrust: Antitrust laws regulate the way companies are allowed to charge their customers for their services. This regulates businesses, and promotes fair competition for the benefit of the consumers; and
- Breach of Contract: A breach of contract lawsuit generally requires that the policyholder only needs to show that the insurance company did not follow the terms of the policy.
It is important to ensure you have a valid claim, as it is difficult to win against an insurance provider due to the fact that they have a lot of money and power backing them up. Further, when they refuse to pay for an auto insurance claim, it is generally because they have a good reason to do so. You will need to consider if it is ultimately worth the effort to sue the insurance company.
Some conflicts with your auto insurance company can be solved with some simple communication between you and the provider. However, some conflicts will require legal action. Further, each state has different laws regarding filing suits against auto insurance providers.
A skilled and knowledgeable insurance attorney will be aware of these laws, and will help you understand your policy. Additionally, the attorney will determine if you have a claim against your auto insurance provider, and what options may be available to you depending on the specifics of your case.