Auto Insurance And Small Claims: Understanding Your Defense Options

Auto insurance companies can be frustrating to deal with, especially when they are uncooperative or unresponsive. In such cases, you may consider taking legal action and suing the insurance company. However, it is important to note that there are specific procedures and limitations to keep in mind when pursuing a claim against an auto insurance company.

In most cases, individuals cannot directly sue the insurance company in small claims court. Instead, the legal action must be directed towards the driver and owner of the vehicle involved in the accident. Additionally, there are monetary limits to small claims cases, which vary depending on the state and the nature of the claim. For example, in California, the maximum recovery amount for a case against a person with auto insurance is $7,500.

Before initiating a small claims case, it is crucial to understand the specific rules, limitations, and procedures that apply in your state. Consulting with a legal professional or seeking advice from a small claims advisor can help ensure that you are taking the appropriate steps and making an informed decision about pursuing legal action.

Suing the driver, not the insurance company

If you are involved in a car accident, you would sue the person who hit your car if it was their fault. You can also sue the owner of the car if that is a different person than the driver, even if they weren't in the car with the driver during the accident. However, you cannot sue the other driver's insurance company.

Small claims court is a good option if you want to explain your point of view and get an explanation (and maybe an apology) instead of dealing with the insurance company. It is also a good option if you want to save money on attorney's fees. However, it is important to note that there is a limit to how much money you can claim in small claims court, which varies depending on the state. For example, in California, the maximum recovery for a case against a person with auto insurance is $7,500.

If you decide to sue the other driver, you will need to provide evidence to support your claim. This could include police reports, eyewitness testimony, photographs, and repair estimates or receipts. It is also a good idea to draw a diagram of the accident to help the judge understand what happened.

Keep in mind that small claims court might not be the best option if you have significant injuries or if the damage to your vehicle is extensive. In these cases, it may be better to consult with a personal injury attorney who can help you navigate the legal process and ensure you receive fair compensation.

Maximum recovery limits

When it comes to auto insurance, policy limits refer to the maximum amount an insurance company will pay out if the policyholder is sued for liability. These limits are typically broken down into three numbers, each representing a different type of coverage: bodily injuries per person, bodily injuries per accident, and property damage per accident. For example, a policy with limits of $50,000/$100,000/$30,000 would cover up to $50,000 in bodily injuries per person, $100,000 in total bodily injuries per accident, and $30,000 in property damage per accident.

It's important to note that insurance policy limits only apply to covered claims. If the costs of an accident exceed the policy limits, the policyholder may be responsible for any remaining expenses not covered by their insurance. In such cases, the at-fault driver can be held personally liable for the excess amount.

While it's not possible to force an insurance company to pay beyond its policy limit, there are a few options for seeking additional recovery:

• Exhaust all insurance policies: In addition to their car insurance policy, the at-fault driver may have an umbrella insurance policy that provides extra coverage.
• Seek recovery from multiple defendants: If multiple parties are responsible for the accident, each responsible party can be held liable for their share of the damages.
• Pursue the negligent driver directly: Policy limits do not relieve the at-fault driver from responsibility. If the injured person's damages exceed the policy limits, they can sue the driver for the remaining amount. However, this option may only be feasible if the driver has the necessary assets to pay the damages.
• Watch out for insurance bad faith: If an insurance company acts in bad faith by refusing to settle a reasonable claim, the policy limits may no longer apply.

It's worth noting that small claims courts typically handle cases involving claims of less than $10,000, and the presence of a lawyer is usually not required or allowed in such courts. For more complex cases or those involving larger amounts, it is advisable to consult with an experienced personal injury attorney to determine the best course of action.

The benefits of small claims court

Small claims court can be a good option for those seeking an alternative to a regular lawsuit. Here are some benefits of small claims court:

Lower Costs

Small claims courts have relatively low filing and service of process fees, which can sometimes be waived if the plaintiff qualifies. In California, for example, the cost to file a lawsuit is between $30 and $75, and this fee is waived for those who receive government benefits.

Simplified Process

Small claims court simplifies the legal process, making it more accessible for those without legal expertise. There are no lawyers, insurance adjusters, paralegals, or clerks involved. This means there are no attorney's fees to worry about, and cases are presented in plain English without legal jargon. Small claims court also has its own set of rules, such as the Small Claims Rules in California, which are generally easier to navigate and understand than regular civil court rules.

Speed

Small claims court cases are often resolved quickly, with hearings scheduled within 30 to 75 days of filing the lawsuit. The process is faster than dealing with insurance adjusters, and in most states, one can be in court in less than two weeks.

Higher Chance of Payment

Small claims court judgments are typically paid by the losing party or their insurance company within 20 to 45 days. Insurance companies rarely appeal these judgments, so there is a good chance of receiving payment if you win your case.

Equalizing Effect

Small claims court serves as a great equalizer, especially when dealing with uncooperative insurance companies. It gives individuals more leverage and a better chance of negotiating a fair settlement without incurring attorney's fees.

Additional Support

Small claims court often provides additional support through legal advisors or advisers, who can help with filing, service, hearing preparation, and other motions. In California, each county has a small claims legal advisor division, offering free assistance to the public.

While small claims court offers these benefits, it is important to note that there are also negative aspects to consider. For instance, there is no legal advice admitted in court, and the absence of attorneys means individuals must present their cases themselves. Additionally, small claims courts have limits on the amount that can be claimed, which varies by state and the nature of the case.

The importance of witnesses

Witnesses play a crucial role in car accident cases, as they can provide valuable testimony and evidence to support your claim. There are generally three types of witnesses that can be helpful: witnesses to the accident, witnesses to your injuries, and expert witnesses.

Witnesses to the Accident

These are people who saw the accident as it occurred and can confirm how it happened and who was at fault. Potential witnesses include passengers in your vehicle, drivers and passengers in other vehicles, pedestrians, and bystanders nearby. While friends and family can be important witnesses, neutral third parties with no stake in the outcome of the case can be especially persuasive in convincing an insurance company or jury that you deserve compensation.

Witnesses to Your Injuries

If the insurance company disputes the severity of your injuries or their cause, friends, family, and co-workers can testify about the impact of your injuries on your daily life, including your ability to work, perform everyday tasks, and the emotional trauma you've experienced.

Expert Witnesses

Expert witnesses have special training and experience and can offer opinions and analysis about the case. For example, if the insurance company claims you were at fault for the accident, you may need to retain an accident reconstruction expert to prove otherwise. Other potential expert witnesses include doctors, economic experts, engineers, and occupational experts.

Having credible witnesses can make or break your case, so it's important to gather their statements and contact information as soon as possible after the accident. While witnesses are not required to speak to insurance adjusters, refusing to identify them may lead to suspicion and undermine their value to your claim.

In a small claims case, you will need to inform the judge of how many witnesses you intend to call to testify, as this will help determine the time needed for the trial.

Evidence and proof

• Police report: Details of the crash, including people and vehicles involved, statements from drivers, passengers, and witnesses, a diagram of the accident, and sometimes the officer's opinion about how and why the accident happened.
• Witness statements: Get the names and contact information of all potential witnesses, including drivers and passengers in uninvolved vehicles and people in nearby homes and businesses. Witness statements can help corroborate your version of events.
• Photographs and videos of the accident scene: Document damage to all cars involved, traffic signs and signals, the exact location of the crash from different angles, vehicle debris, and skid marks.
• Dashcam footage: Dash cam footage can provide reliable evidence of how an accident happened and who was at fault.
• Medical records and bills: Collect documentation of all medical treatment and related expenses.
• Vehicle damage and repair bills: Obtain repair estimates and, if your car is a total loss, proof of the vehicle's pre-accident condition and value.
• Lost income and opportunities: Keep track of missed workdays and lost wages, as well as any jobs or opportunities lost due to the accident.
• Other official documents: This includes pay stubs, receipts, and any other relevant documentation of your expenses and losses.

Remember that time is of the essence when gathering evidence after a car accident. If possible, start collecting information and evidence as soon as possible at the scene of the accident.

Frequently asked questions