When A Car Insurance Claim Ends in a Law Suit

Most car insurance claims are handled in a straightforward manner.  You call the claims department to file the claim, provide a statement on what happened and where, drop your car off at the body shop of your choice, pick up a rental car, and wait until the repairs to your care are completed.  Most people are usually satisfied with the way their claim is processed.  But what do you do if you’re sued by the other party involved in the accident?

I currently have two clients who were recently served with papers notifying them that they were being sued by the other person involved in the accident.  The circumstances surrounding their suits is different, however, they both were scared and called me to determine what to do.

The first step if you’re sued is to not panic.  That’s easier said than done, but this is a time when you need to act rationally and calmly.  Every car insurance company has their own legal teams and may work with local law firms to help with such claims.  Their first priority is to protect their company’s interest and financial standing by avoiding spurious lawsuits which extends to you in some ways.

Once you’ve taken a few deep breaths and slowed your heartrate down, it’s time to talk with your claim adjuster to let them know you were served.  The sooner they know that, the sooner they can involve their attorneys and begin to determine what’s legitimate and what’s not.  An attorney will contact you to obtain another statement from you and gather any documentation to help with their response to the other party’s attorney.  The attorney representing the company and you have been through similar situations before and will advise you on how to proceed.

Ultimately, the attorney representing your car insurance company wants to determine if there’s a legitimate claim.  If not, they’ll move to keep this from going to court and seek a way to end the proceeding against you and the car insurance company.  Should there be a legitimate claim, they may attempt to settle out of court with the other party.  This will be the insurance company’s decision and not your choice.  In most cases, no further action will take place once the attorney’s hammer out a decision.  In a small percentage of cases, the other party may seek additional damages from you, in which case, it will be incumbent to find legal representation, but this is the exception, not the rule.

One of the reasons we have car insurance and carry higher limits is to protect ourselves in the event we are sued.  This transfer of risk from the insured to the car insurance company is what the policy is designed to do, and higher limits help ensure the company has some “skin” in the game.  What do you think?  Share your thoughts, questions, and experiences with me on my Facebook, Google +, and LinkedIn pages.  I’d love to hear from you!

Evie Wise
Evie Wise


Evie Wise
Evie Wise

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