Auto Insurer: Your Legal Ally

If you've been in a car accident, you might be wondering if your auto insurance company will provide a lawyer to help you with your case. The answer is: it depends. While most liability car insurance policies contain language stating that the insurer will provide a lawyer if you get into an accident and are sued, there are exceptions to this duty to defend. For example, if you didn't provide notice of the accident to your insurer within the specified time limits, or if the accident was caused by an intentional act, your insurance company might not be required to defend you. In these cases, you may need to hire your own lawyer to deal with the insurance companies involved and negotiate a fair settlement. An experienced car accident lawyer can help you gather evidence, communicate with insurers, and ensure you receive fair compensation for your injuries and damages.

When insurers might not provide a lawyer

Insurers will often try to settle out of court, and quickly. They know that you have bills to pay and may be in a vulnerable position. They also know that you might not be well-versed in the law, and could be walking away from a lawsuit with an unacceptable amount of compensation. However, there are some instances where your insurance company might not provide a lawyer.

Failure to notify

If you, the insured policyholder, fail to notify your insurer of the accident within the time limits specified in the insurance policy, they may not be obliged to provide a lawyer. This is especially true if the delay has jeopardised their ability to investigate the accident and minimise losses. This time limit could be as little as 5 or 10 days, so it's important to notify them as soon as possible.

Intentional act

Automobile insurance policies generally provide coverage only for negligent actions, not intentional actions. So, if you are accused of intentionally causing the accident, the insurer may refuse to provide a lawyer. An example is drunk driving, which some insurers argue is an intentional action.

Damages exceed policy limits

If the damages paid out by the insurer meet or exceed your policy's coverage limits, they may no longer be obliged to provide a lawyer. For example, if you have $100,000 in liability coverage but the damages are over $100,000, the insurer will try to settle for your policy limits. If they can't, they may simply pay the injured person the policy limits without settling the case, and you may be sued for the remainder of the damages.

Bad faith

In some cases, insurers may deny coverage or refuse to provide a lawyer in bad faith. This is a rare scenario, but if it happens, a separate legal action can be started, and the insurer may end up paying a lot more than they would have if they had defended you.

Lack of documentary evidence

The lack of documentary evidence is one of the top two things that cause a denial or low settlement offer, according to principal attorney Lyle Solomon. Insurance companies may try to deny your claim or offer a low settlement based on specific legal language in your policy if they find out you are approaching them without an attorney.

Neglect

If your house was damaged by water leakage or water damage, your insurance company may deny your claim by stating neglect, especially if the damage was gradual and you failed to repair broken pipes, for example. Having a lawyer by your side in this scenario can be very helpful.

When insurers are obliged to provide a lawyer

In most cases, car insurance companies are obliged to provide a lawyer for the policyholder if they get into a car accident and are sued for injuries and other losses ("damages") resulting from the crash. This is known as the insurance company's contractual "duty to defend". However, there are some exceptions to this obligation.

One exception is if the insured policyholder fails to notify the insurer of the accident within the time limits specified in the insurance policy. In such cases, the insurance company may have the right to refuse to provide coverage for the accident and may not be obliged to provide a lawyer if a lawsuit arises from the crash. Another exception is if the policyholder is accused of intentionally causing the car accident. Automobile insurance policies typically only provide coverage for negligent actions, not intentional ones. Therefore, if the insured is accused of intentionally causing the accident, the insurer may refuse to provide coverage and a lawyer.

Additionally, if the damages paid out by the insurer meet the policy's coverage limits, the insurer may no longer be obliged to provide a lawyer. Once the insurer has paid the policy limits, they may no longer have a duty to continue providing legal representation for the insured.

In the context of homeowners insurance, it may be beneficial to hire a lawyer for a complex and time-consuming claim or if you cannot reach an agreement with your insurance company. A lawyer can help you understand the legal jargon and technicalities of your policy and ensure you receive a fair settlement.

Furthermore, individuals with before-the-event (BTE) insurance have the right to choose their own lawyer, rather than being restricted to solicitors nominated by the insurance company. This freedom of choice is protected by the Solvency II Directive, which states that the insured person shall be free to choose their legal representation.

Communicating with the other driver's insurer

You Are Not Legally Obligated to Speak with Them

It is important to know that you are not legally required to speak with the other driver's insurance company. If you do choose to communicate with them, be very cautious about what you say. Anything you say can potentially be used against you, and they may try to intimidate you or trick you into accepting a lowball offer. It is usually best to have a lawyer or a representative from your own insurance company handle the communication.

Be Wary of Their Tactics

The other driver's insurance adjuster will have the company's interests in mind, not yours. They may try to get you to say something that pins the fault on you or get you to accept a quick, low settlement before you understand the extent of your injuries and damages. They may also pressure you into giving a recorded statement, but you are not required to do so, and it is generally not advisable.

Know What to Say and What Not to Say

If you do speak with the other driver's insurance company, stick to the basic facts and avoid discussing the specifics of the accident, who is to blame, or the extent of your injuries and damages. Provide only the necessary information, such as your name, contact information, and the date and location of the accident. Let them know that you are working with your insurance company or a lawyer and that they can contact them for further information.

Seek Legal Advice

If there is any potential for a claim or if you have severe injuries, it is highly recommended to seek legal advice immediately. A car accident lawyer can handle all communications with the other driver's insurer on your behalf, protect your rights, and negotiate for fair compensation. They have the experience to deal with insurance companies and will work to ensure you receive the compensation you deserve.

Communicating with your own insurer

• Document every communication with your insurance company in a notebook or diary so that you can keep track of the status of your claim.
• Create a paper trail by sending a short follow-up email or letter to confirm any representations or promises made in person or over the phone by insurance company personnel.
• Use good grammar, punctuation, and capitalization in your communications.
• Be proactive and give your insurer proof of your losses, asking for the dollar amounts you are entitled to. Don't wait for them to tell you how much they owe you.
• Use specific instances of improper conduct by your adjuster or insurer as leverage to negotiate the settlement you need. Your diary will come in handy here.
• Remember that you are in a business negotiation, so don't mistake a friendly claim adjuster for a friend.
• Don't use your insurance company as an outlet to vent your frustrations and emotions related to the original cause of your loss.
• Remember that everything you write and say may be noted in the insurance company's records. Even if you're frustrated, avoid saying or writing things that will make you seem uncooperative or the cause of delays or problems.
• Don't sign a confidentiality or non-disclosure agreement without consulting with an attorney first. Agreeing to an overly broad or premature non-disclosure agreement can significantly reduce your leverage and ability to obtain full policy benefits.
• Be polite, prompt, and persistent.
• When communicating with your insurance company, start with the adjuster and contact superiors if necessary.
• When raising a concern over how your claim is being handled or how much you are still owed, documentation is everything.
• Send letters via certified mail so that you have proof of the date you mailed it.
• Keep your letters clear, polite, and to the point.
• If you are nasty, your next contact may be from a lawyer for the insurer, which may block you from continuing to work with the adjuster.

Negotiating with lien holders

The negotiation process itself can be tedious and time-consuming, requiring multiple discussions with the lien holder. It is important to remain persistent and not be discouraged by firm demands from the lien holder. Starting with a low offer, such as 15-20% of the debt, can provide room for negotiation and often results in accepting 50% or less of the original amount. Being frank about your financial situation and offering a solution that helps both parties can be beneficial. For example, offering a full cash payment for a portion of the lien or setting up monthly payments secured by something other than your business assets may be more acceptable to the lien holder.

Additionally, it is recommended to get any agreements with the lien holder in writing and signed by both parties. This ensures that the agreement is finalized and cannot be changed without your consent. If you are unsure about your rights or the validity of the lien, consulting a tax or business attorney can provide valuable insights and guidance on the best course of action.

Frequently asked questions