Auto Insurance And Legal Counsel: What's The Verdict?

If you're involved in a car accident, your insurance company will usually have a duty to defend you. This means that they should provide legal representation if you are sued. Most car insurance policies contain language stating that the insurer will provide a lawyer for the policyholder if they are sued for damages resulting from a crash. However, there are exceptions to this duty to defend, and there may be circumstances where your insurance company is not obligated to defend you or provide a lawyer. For example, if you failed to notify the insurer of the accident within the specified time limit or if the accident was caused by an intentional act, such as drunk driving. It's important to carefully review your insurance policy and understand the laws of your state to know your rights and responsibilities in the event of a car accident.

When auto insurance companies provide legal counsel

Auto insurance companies will typically provide legal counsel in the event of a car accident, as they have a "duty to defend" their policyholders. This means that the insurance company will hire a lawyer to defend the policyholder in court if they are sued for damages resulting from the accident. However, it is important to note that there are exceptions to this duty to defend, and there may be circumstances under which the insurance company is not obligated to provide legal representation.

For example, if the policyholder fails to notify the insurer of the accident within the specified time limits, the duty to defend may be voided. Similarly, if the policyholder is accused of intentional or negligent actions that caused the accident, the insurance company may refuse to provide coverage or legal representation. Another exception may apply when the damages paid out by the insurer meet the policy's coverage limits, as the insurer may no longer have a duty to continue providing legal counsel.

In some cases, the insurance company may deny its duty to defend, leaving the policyholder responsible for hiring their own attorney. If this occurs, it is important to get the insurer to declare its basis for this decision in writing and to seek legal advice from a personal injury lawyer or car accident attorney. Additionally, it may be necessary to review the insurance policy carefully to understand the specific duties and obligations of both the policyholder and the insurer.

It is worth noting that insurance companies are focused on reducing their payouts and may discourage policyholders from seeking legal representation during the settlement process. However, policyholders have the right to protect their interests and should not hesitate to involve a lawyer if they feel it is necessary.

When they don't

Auto insurance companies are generally obliged to provide legal counsel to their customers in the event of a car accident. However, there are some situations in which they may not offer a lawyer. Here are some scenarios where your insurance company is not obligated to defend you:

• Failure to notify: If you fail to notify your insurance company about the accident within the specific time limitations set by your policy, they may not be obliged to provide legal counsel. This is especially true if the delay has jeopardised their ability to investigate the accident or minimise losses connected to the other driver's claim.
• Intentional acts: If the accident was caused by intentional behaviour, such as drunk driving, your insurance company may void your coverage and refuse to provide a lawyer.
• Policy limitations exceeded: If the damages to the other driver exceed the coverage limits of your policy, your insurance company may not be obliged to provide further assistance, including legal counsel.

If your insurance company decides not to offer a lawyer, it is important to get their decision in writing. You can then decide how to proceed, which may include seeking alternative legal representation.

What to do if your insurance company won't provide a lawyer

Auto insurance companies are generally obliged to defend their policyholders in the event of a lawsuit. This means that they should offer legal representation and pay the value of the claim to the victim. However, there are some situations in which an insurance company may not offer a lawyer. For example, if you failed to notify your insurer about the accident within the specified time limit, or if the accident was caused by an intentional act.

If your insurance company refuses to provide a lawyer, here are some steps you can take:

• Get a written explanation: Ask your insurance company to provide a detailed, written explanation for their decision. This is required by law in most states.
• Review your policy: Carefully read through your insurance policy to determine if your claim was legitimately denied. There may be clauses or interpretations that you have missed.
• Don't accept filing errors: If you have followed your insurer's instructions for filing a claim, they cannot refuse to pay a valid claim unless they can prove that your error has harmed them or prevented them from adequately investigating your claim.
• Do your research: Look into the details of your case and compare them to similar cases. For example, if your insurance company paid less than expected for car repairs, check what other mechanics in your area charge for the same service.
• Contact your insurance agent or group policy administrator: The agent from whom you purchased your insurance has a duty to ensure that your coverage protects your interests. They may be able to help resolve the issue.
• Contact the insurance company directly: If your insurance agent doesn't resolve the problem within 30 days, contact the insurance company yourself. Be polite but persistent, and keep a record of all phone calls, including the names and positions of everyone you speak to.
• Complain in writing: If your phone calls are unsuccessful, start a paper trail. Write a letter to the person who denied your claim, then their supervisor, including all relevant information and documents. Request a written response within three weeks and keep copies of all correspondence.
• Enlist outside help: Contact your state Department of Insurance, a professional arbitrator, or a lawyer to help mediate your dispute.
• Know your rights: Review your insurance policy and discuss with your agent, insurance provider, or state regulator to understand your rights in the case of a dispute.
• Keep records: Maintain detailed records of all interactions and documents related to your case. This includes keeping records of phone calls, saving phone bills, and storing important documents in a safe place outside of your home, such as a safe deposit box.

What to do if you don't have insurance

If you don't have car insurance and are involved in an accident, the consequences will depend on where you live, who was at fault, and how much damage was caused. Here are some important things to do and keep in mind if you find yourself in this situation:

• Stop and stay at the accident scene: It is important to fulfil your post-crash legal obligations. Leaving the scene of an accident without taking proper action can result in serious penalties, especially if anyone is hurt.
• Call emergency services: If anyone seems to have suffered significant injuries, call emergency medical services immediately.
• Contact law enforcement: Call the police to report the accident and have them come to the scene.
• Exchange information: Share contact and insurance information with anyone else involved in the accident.
• Be careful what you say: Avoid admitting fault or discussing details about the accident.
• Gather evidence: Take pictures of the accident scene, the position of the vehicles, and anything else that might help tell the story of how the accident happened. Get the names and contact information of any witnesses.
• Contact a lawyer: Consider consulting an attorney, especially if you find yourself facing high out-of-pocket costs not covered by insurance or if you need help navigating the legal process.
• Understand the financial implications: If you are found at fault and don't have insurance, you will likely be personally responsible for any injuries and vehicle damage resulting from the crash. This can include repair and replacement costs, medical expenses, and legal fees if the other party sues you.
• Be aware of state-specific laws: Some states have "No Pay, No Play" laws, which restrict the types of compensation an uninsured driver can receive if they are injured in an accident caused by another driver. Other states follow a "no-fault" insurance system, where injured individuals seek compensation from their own insurance company, regardless of who was at fault.
• Understand the impact on your driving privileges: Driving without insurance can result in the suspension or revocation of your driver's license and vehicle registration. There may also be fines and other penalties imposed by your state's Department of Motor Vehicles (DMV).
• Consider the impact on future insurance costs: Insurance companies tend to view drivers who have caused accidents or had a lapse in coverage as higher-risk, which can result in higher insurance premiums.

What to do if you're being sued

If you're being sued after a car accident, it's important to understand the lawsuit and take steps to protect yourself and your assets. Here's what you can do:

Understand the Lawsuit

The plaintiff (the person suing you) likely hired a personal injury attorney to represent them and recover damages for their losses, which can include medical bills, lost wages, pain and suffering, and other accident-related expenses. The plaintiff's attorney will gather evidence to prove that you were at fault and that their client was harmed as a result. If the case goes to trial, this evidence will be presented to a judge or jury, who will decide on a settlement amount to cover the plaintiff's losses.

Protect Your Assets

If the plaintiff wins the lawsuit, the court can authorise seizing your assets to pay for the damages awarded. This could include garnishing your wages, putting liens on your property, forcing the sale of assets, or even declaring bankruptcy. To protect your assets, consider hiring an attorney who can help establish asset protection trusts or negotiate an affordable payment plan with the plaintiff. Do not try to hide your assets or engage in fraudulent activities, as this could lead to criminal penalties.

Get Legal Representation

Hiring an experienced car accident attorney is crucial. They can investigate the crash and determine if the other party is truly at fault or if partial fault on their part can reduce your financial liability. A skilled attorney can guide you through defensive strategies and help protect you from the potential consequences of a lawsuit.

Take Action After the Accident

• Stop and remain at the scene: It is important to stop and stay at the accident scene, whether it involves another driver, a parked car, a pedestrian, or property damage. Exchanging necessary information with the other party is essential, and leaving the scene can result in hit-and-run charges.
• Stay calm and in control: Try to maintain a calm demeanour to think clearly and avoid admitting fault. When speaking with the other party, avoid statements that imply guilt, such as "I'm sorry" or "I didn't see you."
• Call the authorities: Contact 911 to request emergency services and an officer. When filing the police report, cooperate and provide truthful information without admitting fault.
• Call your insurance company: Notify your insurance company as soon as possible and report the accident. They can guide you through collecting evidence at the scene and processing your claim. Provide truthful information but refrain from admitting guilt.
• Collect evidence: Document any evidence that can help prove you were not at fault. Take pictures of obstructions, road hazards, road conditions, and property damage. Record details such as the time of day, weather conditions, and witness statements with their contact information.
• Refer all communications to your insurance company or attorney: If anyone involved in the accident tries to contact you directly, refer them to your insurance company or attorney. Forward any correspondence or legal notices to your legal team.

When to Get an Attorney

While your auto insurance may provide legal counsel and pay out the value of the claim, there are situations where hiring an attorney can be beneficial:

• Serious injuries or long-term impact: If you or others involved have serious or long-term injuries, extensive medical bills, lost income, or significant impacts on your quality of life, an attorney can help you navigate the complexities of proving these types of injuries.
• Contested fault: If the other driver caused the accident but won't admit fault, or their insurance company disputes liability, an attorney can help you gather evidence and prove their fault.
• Low settlement offer: If you feel the settlement offer from the insurance company is too low, an attorney can negotiate on your behalf to raise the settlement amount.
• Court proceedings: If your case goes to court and small claims court is not an option, an attorney can represent you and navigate the formal court rules, protocol, and technical rules of evidence.
• Other complex situations: If a death occurred, pedestrians were involved, the accident happened in a construction zone, insurance-related issues arise, or you're concerned about liability, an attorney can provide valuable expertise.

Frequently asked questions