Auto Insurance And Attorney Fees: What's Covered?

Auto insurance can be a confusing topic, and it's not always clear what is and isn't covered by your policy. One common question is whether auto insurance covers attorney fees. The answer is: it depends. Typically, if you are being sued by another driver, your insurance company will provide you with an attorney and cover the legal fees. However, if you are the one filing a lawsuit, you will generally need to hire your own lawyer and pay the associated costs.

When insurance companies cover legal fees

Typically, insurance companies don't pay for attorney fees. However, there are exceptions, and it's always good to check your specific policy coverage. If you are accused of causing a car accident and the other party files a personal injury lawsuit against you, your insurance company will likely provide an attorney and handle the legal fees. This is because almost all auto insurance policies have a "duty to defend" built-in.

Liability insurance is designed to protect your personal finances and ensure you don't have to pay out of pocket if someone sues you for a car accident. However, there are some exceptions to this. For example, if you intentionally caused the accident, didn't provide sufficient notice to the insurance company after the accident, or if the other driver's damages exceed your policy limits, your insurance company may not cover the legal fees.

Additionally, if you hire a lawyer to help negotiate your insurance settlement or file a lawsuit against someone else, your insurance company will likely not cover those fees. In such cases, you may need to hire a lawyer yourself or purchase legal insurance, also known as legal plans, legal protection insurance, or prepaid legal plans. These policies help cover the cost of hiring a lawyer, and some prepaid legal plans are as low as $10 per month.

It's important to note that personal legal insurance is not the same as traditional insurance. It's a discount plan for legal services, and what's covered will vary by the company offering the service. Some plans may only cover in-network attorneys and may not cover advice on business matters. Additionally, there may be limits on how much service the plan will cover in different categories of legal services.

When insurance companies don't cover legal fees

• You intentionally caused the accident.
• You failed to notify the insurance company in a timely manner after the accident.
• The damages incurred by the other party exceed your policy limits.
• You have not purchased additional legal expenses insurance.

In these situations, it is essential to review your specific policy coverage and consult with your insurance provider to understand their decision.

If your insurance company decides not to cover your legal fees, you may need to hire a lawyer yourself. This can be costly, especially if you are the defendant in a lawsuit. Defense lawyers typically charge upfront fees, which can be a financial burden.

However, if you are the plaintiff in a lawsuit (filing a claim against another driver), most personal injury attorneys work on a contingency fee basis. This means they only get paid a percentage of the settlement or court award if you win your case. This can alleviate some of the financial burden associated with legal fees.

Additionally, you may want to consider purchasing legal insurance or legal protection insurance. These policies can help cover the cost of hiring a lawyer and are becoming more popular in the US. Legal insurance typically works like any other insurance policy, with monthly payments and coverage for legal services when needed.

When faced with a situation where your insurance company doesn't cover legal fees, it is advisable to consult with a personal injury lawyer. They can provide guidance on your specific situation and help you navigate the legal system. They will also have your best interests in mind and work to protect your rights and interests throughout the process.

How to find out if your insurance company will cover legal fees

Generally, insurance companies don't pay for attorney fees. However, there are exceptions, and it's always good to check your specific policy coverage. If you are accused of causing a car accident, your insurance company will likely cover your legal fees and provide an attorney on your behalf. This is because almost all auto insurance policies have a "duty to defend" built-in.

However, if you are the one filing a lawsuit against another driver, you will usually have to find your own lawyer and cover the fees yourself. There are some instances where your insurance company will not cover your legal fees, including:

• You acted intentionally to cause the car accident.
• You didn't notify the insurance company of the accident soon enough.
• The damages exceed your policy limits.

If you are unsure whether your insurance company will cover your legal fees, you can:

• Check your specific policy coverage. Review your insurance policy documents to see what is and isn't covered. Look for any mentions of legal fees, attorney fees, or a "duty to defend" clause.
• Contact your insurance company directly. Get in touch with a representative from your insurance company and ask them about your policy's coverage of legal fees. They should be able to clarify whether you are entitled to any legal support and under what circumstances.
• Consult with a personal injury lawyer. If you are unsure or need help interpreting your policy, consider seeking advice from a personal injury lawyer. They can review your policy and provide guidance on your options.

What to do if your insurance company doesn't cover legal fees

In most cases, insurance companies do not pay for attorney fees. However, there are exceptions, and it is always good to check your specific policy coverage. If your insurance company decides not to cover your lawyer fees, here are some steps you can take:

Ask for the reason in writing: First, ask your insurer to provide you with the reason it cannot offer you an attorney in writing. Having this information in writing will help you understand their decision and protect your rights.

Request reconsideration: Once you have the statement from your insurer, you can write a letter asking them to reconsider their decision. Explain your situation and provide any relevant details that may impact their decision.

Contact a personal injury lawyer: If your insurance company still refuses to cover your legal fees, consider contacting a personal injury lawyer, especially if you are not at fault in the accident. Personal injury lawyers typically work on a contingency fee basis, which means you don't pay anything unless you win the case. They will take a percentage of the settlement as their fee.

File a complaint: If you believe your insurance company is treating you unfairly or not fulfilling its obligations, you can file a complaint with the appropriate regulatory body. In some cases, you may need to contact a specific department or organization, such as a state insurance commissioner or a legal ombudsman.

Consider alternative dispute resolution: If you are unable to resolve the issue with your insurance company, you may want to explore alternative dispute resolution methods, such as mediation with a neutral third party. This can help you settle disputes outside of court and potentially save time and money.

Seek legal advice: Consult with a lawyer who specializes in insurance law or dispute resolution to understand your rights and options. They can review your insurance policy, assess your situation, and provide guidance on the best course of action.

How to find an attorney if your insurance company doesn't cover legal fees

In most cases, insurance companies do not cover attorney fees. However, if you are accused of causing a car accident, your insurance company will likely provide you with an attorney and handle the legal fees. On the other hand, if you are the one filing a lawsuit against another driver, you will have to cover your own attorney's fees.

• Get a referral from another attorney whom you have worked with before. They may be able to recommend someone with experience in similar cases and a successful track record.
• Ask for recommendations from friends and family who have been in similar situations. They can share their personal experiences and help you find a good lawyer.
• Conduct online research and read reviews from past clients. This can give you an idea of the lawyer's experience, areas of practice, and success rate.
• Contact your local bar association or lawyer referral service. They often provide referrals to attorneys in your area who specialize in specific areas of law, such as personal injury.
• Consider hiring a personal injury lawyer who works on a contingency fee basis. This means that you don't have to pay any legal fees upfront. Instead, the lawyer will take a percentage of the settlement amount as their fee if you win the case.
• Shop around and get multiple consultations before making a decision. Many lawyers offer free initial consultations, allowing you to ask questions and determine if they are a good fit for your case.

Frequently asked questions