Can I Get Sued for a Car Accident If I Have Insurance?

Car Accidents - InsuranceYes, you can get sued for a car accident even if you have insurance. Of course, there is much more to this issue but let us walk you through the basics.

First, many car accident cases are settled without a lawsuit being filed. Generally, a lawsuit is filed for four reasons, which we will explain below. But, before we even get to the issue of when a lawsuit is filed, it is important for you to understand what having car insurance means in the event you have a motor vehicle wreck

If you have liability insurance and you are involved in a car accident, you should notify your insurance company immediately. Almost every insurance policy in the world requires prompt notification of a claim or a potential claim. Once they have notice of the claim, your insurance company will evaluate the facts, gather evidence and decide who was at fault. If the accident was your fault, your auto insurance company will attempt to work out a settlement on your behalf with the claimant (the injured party who could potentially sue you). If they are unable to work out a settlement, it is usually as result of one of the following reasons:

  1. The claimant and your insurance company cannot agree on whether you were at fault for the accident or whether you bear any responsibility for the accident. For example, in an intersection wreck, if you pulled in front of the claimant, then you will almost certainly bear some fault. However, your insurance company may argue that the claimant also bears some fault because she was speeding excessively. Under such a scenario, litigation may have to be filed to determine what percentage of fault each party bears.
  2. The claimant and your insurance company cannot agree on a settlement amount. Let’s assume the claimant’s leg was broken in the car accident and she missed time from work and lost a promotion opportunity because of it. If the disagreement over what is fair compensation for those losses cannot be resolved, litigation will almost certainly result.
  3. If the statute of limitations (the legal deadline by which the claimant must file suit or lose her rights forever) is approaching and there is not sufficient time for the parties to negotiate, then the claimant will almost certainly file suit to preserve her claim and the parties will continue to negotiate. In Tennessee, that deadline is usually one year from the date of the wreck.
  4. If the value of the case exceeds the amount of your insurance coverage and you have assets (a home, boat, available funds in your bank accounts, etc.), you could get sued even if your insurance company is willing to pay the claimant the full amount of insurance you purchased. When you purchase your insurance, you are purchasing a certain amount of insurance sometimes referred to as your insurance limits. If you purchased the legally minimum coverage and they are insufficient to compensate an injured claimant, the claimant’s attorney is going to investigate to determine whether you have assets which can be taken by the claimant to fully compensate them. The amount of your legal liability is not determined by the amount of insurance you chose to purchase but rather by the value of the claimant’s losses under the law.

So, those are the four main reasons why you would be sued even if you have insurance. Now, let’s talk about what will happen once you are sued. First, you will be served with legal papers known as a complaint and a summons. You should immediately send those papers to your car insurance company. Some people have what is known as an “umbrella” or an “excess” insurance policy on their vehicle or vehicles. This type of insurance provides additional liability coverage over and above the first (called the “primary”) layer of insurance coverage. Your excess or umbrella insurer also need to promptly receive a copy of the summons and complaint

Almost every insurance policy has a provision that the insurance company will defend you in the event of a lawsuit, so the insurance company will hire and pay for a lawyer to defend the case against you. This lawyer will represent you and report to the insurance company. The insurance company, except in certain circumstances, has the right to settle the case when they want and for the amount they want provided the amount is within the policy limits for which you paid. If for any reason, the company is not going to defend you or is going to defend you but dispute the existence of insurance coverage for the wreck (in which they will defend you but reserve the right to deny insurance coverage latter) you will need to hire your own attorney to defend you to help protect your rights.

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