At fault collison, other party asking for money (car insurance, purchase, premium)

[frostca]

I received a letter today for an accident that happened 11 months ago for an at fault motor vehile collision I caused. The money they are asking for exceeds my policy amount and I don’t have enough money because I am attending college. What can I do?

[adjusterjack]

More details please.


1 - Is this demand for damage to the other car or for somebody's injury?


2 - Did you report the accident to your insurance company when it happened?


3 - What are your policy limits? BI per person, BI per accident, PD?


4 - How much do they want?


5 - What has your insurance company been doing for the last 11 months?


6 - What correspondence have you gotten from your insurance company in the past 11 months.


7 - What state are you located in?


8 - Have you been served a lawsuit? Was the letter from a lawyer? If not, then from who?


9 - Have you turned the letter over to your insurance company?


10 - What did the claims person tell you about it?


Depending on the answers you might not have to do anything. Or, you might have to spend your own money on a lawyer.


Answer all the questions.

[markg91359]

Originally Posted by frostca

I received a letter today for an accident that happened 11 months ago for an at fault motor vehile collision I caused. The money they are asking for exceeds my policy amount and I don’t have enough money because I am attending college. What can I do?

When you purchase car insurance you are entering into a contract. In return for your monthly premium, the insurance company has certain specific obligations to you:

1. It must fairly investigate a claim;

2. It must attempt to settle legitimate claims within your limits of coverage;

3. It must provide you with a legal defense if it is unable to settle a claim within policy limits.

Whether a demand is greater than your policy limits or not, does not negate the obligation of the insurer to provide you with an attorney (at their expense) to defend you. I am an attorney. It is a common practice to make a demand on someone for more than their insurance policy limits are. This places pressure on the insurance company to offer policy limits in appropriate situations. This may be what is going on here.

For those without assets, a personal bankruptcy is an option if your insurance is truly inadequate to pay off a claim. The exception would be drunk driving. The bankruptcy do not allow someone who causes an accident while intoxicated to discharge their debts in bankruptcy.

[adjusterjack]

Originally Posted by markg91359

When you purchase car insurance you are entering into a contract. In return for your monthly premium, the insurance company has certain specific obligations to you:

1. It must fairly investigate a claim;

2. It must attempt to settle legitimate claims within your limits of coverage;

3. It must provide you with a legal defense if it is unable to settle a claim within policy limits.

It's not only the insurance company that has specific contractual obligations. The insured has them, too.

DUTIES AFTER AN ACCIDENT OR LOSS

We have no duty to provide coverage under this policy unless there has been full compliance with the following duties:
A.We must be notified promptly of how, when and where the accident or loss happened.

A breach of that contractual obligation could prejudice the insurance company's ability to investigate, defend, or settle and thus result in significant trouble for the insured, up to and including cancellation, rescission, denial.


Obviously, circumstances matter, but the insured needs to know both sides of the story and the potential consequences of failing to promptly report an accident, no matter how slight, to the insurance company.

[CGab]

Originally Posted by frostca

I received a letter today for an accident that happened 11 months ago for an at fault motor vehile collision I caused. The money they are asking for exceeds my policy amount and I don’t have enough money because I am attending college. What can I do?

You never returned to give us more details. Did the letter come from a lawyer? Are you being sued for more damages that exceed your policy limits? If so, yes that can happen if you are not properly covered! Many people think they are fine if they cause an at fault accident because their insurance will pay, but insurance only pays up to your policy limits. If the damages, personal property or the other persons medical expenses exceed your policy limit then that personal can come after your personally to recoup damages. They can garnish wages or take assets. if this letter is from a lawyer, then I suggest you get a lawyer as well!