When a person is in an auto accident, and another driver is at-fault, the person has the right to file a claim with that driver’s insurance company for any bodily injury and property damage that they may have experienced. There is an exception, explained below, if the person lives in a no-fault auto insurance state.
Even if the person believes that they have a perfectly valid claim, the other driver’s auto insurance company might deny the claim for any number of reasons, including the following:
- The other driver did not have the proper liability insurance to cover the claim, i.e. they are not a named insured on the policy or their vehicle is not covered by the policy;
- The insurance company determines the other driver, who is the person they insure, was not in fact at fault;
- The other person is not cooperating with their insurance company in investigating the claim;
- There are “exclusion” provisions is their policy which result in a lack of coverage;
- The person lives in a no-fault auto insurance state.
What If I Live in a No Fault State?
If a person lives in a no-fault auto insurance state, then their own insurance company pays for damages, regardless of who is at fault in causing an accident. Currently, the following 12 states have no-fault auto insurance systems: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah.
In these 12 states, a person would turn to their own insurance company for compensation for harm from a car accident no matter who was at fault in causing the accident.
What Are My Options If My Claim Is Denied?
If a person lodges a claim with the insurance company of the other driver whose fault caused the accident and that insurance company denies their claim, the person has three options which are discussed in more detail below. They are:
- A person can file a claim with their own insurance company;
- A person can sue the other driver in small claims court if the person’s damages are within the limit for small claims court. Each state limits the amount of damages that a person can recover in small claims court. The limits range from $2,500 in Kentucky to $25,000 in Tennessee. The important point is that a person cannot recover more than this amount in small claims court. If a person’s damages exceed the limit, they would have to file their lawsuit in he regular civil court of general jurisdiction. The small claims court limits in most states fall between $3,000 and $15,000;
- Consult an attorney.
What If the Other Driver is Uninsured?
One scenario is that the other driver whose fault caused the accident does not have insurance coverage. The person might be an uninsured motorist. All states today require drivers to have auto insurance, but it is still possible for a driver to drive without auto insurance.
If a person gets into a car accident, whether the other person has insurance or not, it is always a good idea to call the police before leaving the scene of the accident. If the other driver is uninsured, especially if they were at fault, calling the police is even more important. Or, if the accident is a serious one, calling the police is vital. A police report is going to help the person resolve issues with insurance companies and get their costs covered.
If the other driver does not have auto insurance, they are at risk of paying large fines and fees for driving without insurance. They may be charged with a crime. They may try to offer a person money in the hope that they can keep their violation unknown to authorities and avoid unpleasant legal consequences.
A person should never accept money from an uninsured driver under these circumstances. That is because they do not know what the cost of repairing their damage or treating their injuries may come to. So, even if it seems like a good idea at the moment, a person should wait and not accept a quick pay-off.
A person can always accept a settlement from another driver whose negligence has caused them injury and damage. So, they should get the other, uninsured driver’s identity and contact information as well as information about their vehicle. A person also wants to ask for the contact information from any witnesses as well, because their statements can be helpful.
The information that a person who has been involved in a car accident wants to get includes the make and model of the vehicle involved, its license plate number, the time and location of the accident, and the name and badge number of the responding police officer. The person should write down any details they think would be helpful when they work with their insurance company.
If it is possible, a person should take pictures of the damage done to their car and the other vehicle, the other driver’s vehicle identification number (VIN), license plate, traffic signs and the direction each vehicle was traveling. All of these details can be important in proving exactly what happened and who is at fault.
Once a person has collected as much information as possible, they can contact their insurance company to tell them of the accident. As a first step, the person should make sure to tell their insurance company they were hit by an uninsured driver.
A person should have the following information read when they call their auto insurance company to make a claim:
- Notes: The person’s own notes made at the scene of the accident or soon after returning home;
- Information about the Other Driver: In this scenario, a person would not have the other driver’s insurance information, but they can provide their name, contact information and anything else the at-fault driver gave them at the scene;
- Police Information: They should have at hand the name of the law enforcement agency, the law enforcement officer who reported to the scene and the number of the police report to share with their insurance company.
If a person is hit by an uninsured driver in a no-fault insurance state, the process of submitting a claim is different. In a no-fault state, it does not matter who was at fault in causing the accident, a person’s own insurance provider will pay some or all of their medical bills and lost earnings. So, whether the driver has insurance or not, a person files their claim with their own insurance company.
Uninsured motorist coverage provides protection for a person if they get into an accident with someone who does not have insurance. The coverage is required in some states and optional in others. If a person has the coverage, their insurance company will step in and help cover costs for bodily injuries to the person and their passengers. It helps cover a person’s medical costs and loss of income, among other expenses.
If a person does not have uninsured motorist coverage and cannot get coverage from their own insurance company, they can take the at-fault driver to court to sue for compensation for their injury and property damage. But this could take time and money and there is no guarantee that a person would win an award. And even if a person wins an award, they may not be able to collect the money from the uninsured motorist.
It is possible that a person would be stuck paying themselves for their injuries and property damage. Hopefully they would have medical insurance that would cover at least some part of their medical expenses. Collision insurance coverage might be used to help fix their vehicle.
This is why a person who does not live in a no-fault insurance state wants to have uninsured motorist insurance coverage as part of their own automobile insurance protection.
Can I File a Claim with My Own Insurance Company?
If a person has collision insurance, and their insurance claim is denied by the other party’s insurance company, the person can file a claim with their own insurance company. They will have to pay a deductible and their insurance company would then pay any damages that exceed the deductible amount.
A person’s insurance company then has the option to go after the other party and the person is no longer involved in the dispute.
If the person’s insurance company refuses to pay their claim, and they believe that they have the coverage they need and should be paid, they may have a claim for “insurance bad faith.” An insurance company is liable for insurance bad faith when they deny a legitimate claim, one that they should pay.
Insurance bad faith arises from the fact that the law implies a covenant of good faith and fair dealing in every insurance contract. If an insurance company engages in conduct with respect to their insured which violates that covenant, they could be liable for damages.
Tactics that courts have viewed as violating the covenant of good faith and fair dealing include misrepresentation of the terms of an insurance contract or its language. Failing to honestly disclose policy provisions, exclusions and terms in order to avoid paying claims would violate the covenant also.
Can I Sue the Other Person’s Insurance Company?
A person cannot sue another person’s insurance company if that company denies their claim for damages. Generally, the appropriate remedy at this point is to sue the other person directly. As noted above, a person can sue in small claims court if their damages are below the limit for small claims court in the person’s state. Otherwise they would sue them for negligence in a civil court of general jurisdiction.
If the person who is sued has liability insurance, their insurance company’s attorney would have to defend them in court, so the person who is suing them might want to be represented by their own attorney.
Should I Seek Legal Help?
The above information is provided as general information regarding the complicated area of insurance claims. Each state has its own laws regarding auto insurance and car accidents.
If you find yourself in a situation where the other driver’s insurance denies your claim, or you are forced to sue the other person directly, you should contact a car accident attorney as soon as possible. Your attorney can review all the facts and your insurance policy and advise you how to proceed to get some coverage for your losses.