Car Accident Insurance
Car Accident Insurance
UPDATED: Mar 27, 2020
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Car Accidents Without Insurance
In 2011, there were about 13.8% of drivers in the US without car insurance. This is a huge risk to take because even if you don’t get involved in an insurance claim, getting caught without the minimum mandated coverage will lead to penalties for driving without insurance like stiff fines.
It is important to know what to do after a car accident and you do not have insurance. If it was not your fault, you can go after the party at fault but it should be a warning sign to you that you should buy insurance and legitimize your presence on the road.
If you are hit by someone who also doesn’t have car insurance and it is not your fault, you have the option of suing that person but you will have to spend on legal and court fees. However, there are around 20 states that are planning to ban “pain and suffering” lawsuits by non-insured drivers.
A car accident, no insurance case is always a tricky situation. There are “he said-she said” cases or lack of witnesses which would make it difficult to lay blame on the other party. Having no insurance immediately puts you on the defense for breaking the law on minimum insurance coverage. It puts a question mark on your credibility.
If the other party is able to prove that you are at fault, that person can sue you and go after your assets including your paycheck, savings, or even your home if the damages or injuries are extensive. You will have problems buying insurance, being tagged a high risk client, or being required to join a risk pool with its high insurance rates.
Getting Affordable Car Insurance With Accidents
Risks on the roads have immensely improved in the past decades with better road conditions, technology, and awareness. However, car accidents and the number of fatalities are still considerable with over 35,000 deaths and more than 3.8 million people injured from road accidents in 2013 alone.
This certainly justifies the law requiring car insurance for every vehicle. Unfortunately, one of the aftereffects of car accidents is having to face a review by car insurance companies and the possibility of a premium increase.
An increase in your premium is not automatic but auto insurance claims usually lead to a review. Car insurance companies will assess the circumstances of the accident and determine fault. If you are not at fault, the increase is unlikely. Also, if you have a good history of safe driving, your insurance provider will seriously consider it as a one-off and not raise your premium. This is typically when you are considered a high risk driver.
If you have a Safe Driving discount, you may find out after the accident that the discount will no longer be applied when you renew your insurance. Thus, in an oblique way, you will have to pay a higher premium.
One of the other effects on car insurance after an accident is the length of time of the increased rate. The history of the car accident will follow you thru your driver’s record for at least a year. If the car accident is so severe, the effects will last much longer and gradually decrease provided you do not get involved in other road violations or accidents. The average length of time that the increased rate is imposed is about 3 years for serious car accidents.
Car Accident No Insurance, Not at Fault
No fault car insurance claims which is the same as Personal Injury Protection (PIP) insurance claims, is passing on the responsibility for personal injury damages to the other party.
Thus, if you are in a car accident and it wasn’t your fault, ask the other party for details on his PIP insurance coverage and demand that he settle with you using this insurance coverage.
No fault insurance can be bought in states that have no fault laws. This means if you are from Florida, which is one of the states with the no fault laws, you have to buy minimum PIP insurance coverage.
If you do not get PIP coverage, you will be charged with high fees and could risk losing your privilege to drive in that state until you can show proof of coverage.
PIP insurance is not liability so if you don’t also have liability insurance, you will have to buy it. The problem you will be facing is that having being caught driving without insurance, you are now a risk to insurance companies and will be charged a higher rate.
Car Accident, No Insurance, At Fault
If you are at fault and you do not have car insurance, you have very little options available. If the damage is minimal, you could just offer to pay for the damages on the spot and hope the other party accepts and drives away.
Unfortunately, most responsible drivers would like to have the damage assessed first before agreeing to payment and this means going through the insurance protocol.
Aside from paying for the damages, you may also be held accountable for towing, personal injuries, loss of income, and paying for an alternate mode of transportation while the car is being repaired. You may even have to face a lawsuit for emotional distress.
If the insurance company is involved, it will mean requiring a police report and having your violation of not buying minimum car insurance on your driver’s record.
In short, you may have a ton of bills to pay and a high insurance rate that may extend up to 3 years for a serious accident. Not having insurance means that the other party or his insurance company will have to file a court case to get you to pay for damages.
Once you receive this kind of demand letter or court order, get a lawyer to help you present your case and fight for your rights. You will still have to pay the fines for not having insurance but you may be able to reduce the other expenses.
On the other hand, if you feel that the other party had some fault in the accident, you can contest the charges and expenses.
Car Accidents And Insurance Settlements
Settlements for car accidents are tedious at best which is why it is very important to consider the settlement procedures of insurance companies before you buy insurance from them. Settlements can involve personal injury, liability, or both. In all cases, settlement is based on fault. For instance:
- If no one was injured and the accident was caused by the other party, you can ask that party to pay for damages.
- If you were injured through no fault of yours and you do not have personal injury insurance, you can file a lawsuit against that person and get him to pay the expenses for medical treatment.
- If there are damages and the accident was your fault, you have to settle with the other party whether it is thru your insurance company or personal assets.
Thus, you can only file for PIP settlement against your insurance provider if you are at fault. If you are not at fault, you have to prove damages because there can be no settlement if there are no damages.
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What should I do if I get into an auto accident?
First of all, whether you think you are at fault or not, never drive away. Make sure you or any passenger in your car is not injured. Request the other driver to do the same. Try to calmly confront the other party with caution.
If you fear danger, call 911. If there is no imminent danger, you will need to discuss who is at fault, exchange contact and insurance provider details. You should also check the driver’s license of the other party to confirm his or her identity and take down the license number.
If there is a dispute regarding fault, request for the police to mediate using 911. You will need the police report if you plan on filing a claim with your insurance company. Try taking photos of the accident and gather as much evidence as possible that would prove that you are not at fault.
As soon as possible, seek medical clearance and contact your insurance company.
If you drive, you should have the state minimum insurance coverage. This will protect you but you may have to pay out-of-pocket if the damages exceed your insurance coverage. As far as how much coverage you should buy and the type of insurance you need in case of a car accident, you can go as high as you want and pay the price. The type of insurance you will need to protect you after an accident are PIP and liability.
Personal injury is insurance that will pay for injuries you sustained in an accident. Liability has a 2-pronged coverage: Bodily Injury and Property Damage. If the other party is insured, it should be a simple case of exchanging details, contact numbers, and a general agreement of what happened. If there is a disagreement on the accident details, you will need a third party to negotiate.
On the scene, the third party would be the police. After the accident, you can rely on the insurance companies to assess the situation and come up with their own conclusions. If you are not happy with their results, you can contact an attorney who handles these kinds of cases. Whether you are at fault or the other party is responsible, it is important to establish facts. Take photos and document the scene. You should also exchange information like telephone number, driver’s license numbers and names, and try to get a police report.
The person at fault should admit his error and sign on a piece of paper (if there is no police around) that he admits his fault and is willing to cover the damages.
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There are no standard guidelines for all insurance companies in all states so you have to expect slight differences depending on your location. However, you should ask your insurance company for their guidelines and try to follow their direction as much as possible to avoid delays.
In case of a lengthy delay, you may seek help from a lawyer to discuss with the insurance company about the delay in processing settlement. There are cases when the court have found insurance companies deliberately slowing the process unfairly and this has cost them in fines and penalties. That being said, the delay in settlement would depend on the nature and severity of the car accident.
In a nutshell, the process is:
- File your claim
- Submit documents to support your claim
- Wait for the adjuster to process the claim and submit a report
- Get your copy of the report and settlement
- Accept or reject the settlement
- Bring your case to a lawyer if you need help
- Go through the court system and wait for the decision
First, find out who is in charge of insurance settlements in your insurance company. Get the designation and correct spelling of the person’s name.
Second, compile all attachments you think is relevant. Make sure you only submit copies of the original documents.
Third, write your letter. You can get sample letters online. Include all the historical data of the accident up to the present day and the current status of your claim. Be sure to include your insurance policy number, complete name, contact details, and other pertinent information. Include the expenses you have incurred thus far, the details of damages and/or injuries sustained, and the amount you need to fully recover from the accident.
Fourth, make at least copies of the letter and have your copy received by the insurance company either through hand delivery or registered mail.
Finally, follow up on your letter and confirm that the letter has been opened and read. An auto adjuster or claims adjuster is the person assigned by the insurance company to assess the validity of the claim. He is tasked with investigating and determining if an insurance claim should be paid by the insurance company.
Part of his work is reviewing the police report, talking to witnesses, talking to both parties, and anyone else involved in the accident.
There is nothing to prepare if you have submitted all the documents when you filed your claim. Just be honest and avoid embellishing the narration of the incident. However, you should consider these before you are interviewed:
- The adjuster is paid by the insurance company and so he works for their best interests.
- If you have injuries, present an updated medical report on your status
- Do not answer blanket questions like “How are you?” with a generic reply like “Fine.” It may be used by the adjuster to mean that you are back to normal and fully recovered.
- The adjuster may offer you an on-the-spot settlement. Avoid making an impulsive decision and request for more time to think about it. If you are uneasy, you can consult a lawyer.
First, find out the reason for the dispute. It is possible that there are documentary or administrative problems which can be fixed. Request for the decisions of the insurance companies in writing so you can study them.
There are several ways insurance companies can reach an amicable agreement:
- The settlement can be reduced or increased
- Thru legal means
- Thru a shared settlement
If there are witnesses, ask them for their version of the accident. If you are certain you are not at fault and the other driver is not under the influence or off-balance in any way, you should seek ways to establish fault.
You can ask that the car of the other party be checked for malfunction or look for CCTV system that may have caught the accident on video. After the interview, you will have to wait for his official report. Once this is out, you can decide to accept or reject his findings.
You may negotiate with the adjuster if you feel the pay-out is insufficient. The worst case scenario would be to reject the report and seek legal help. Personal injuries caused by negligence of another person means that the other person pays for treatment and loss of wages, among others. Your insurance is not affected in the sense that you are a victim. In insurance, it is the one who is negligent who is accountable.
Once negligence has been assigned to the other party, get the contact details, driver’s license number, confirm identity, and request for the police report before filing your claim. Your insurance company may compensate you and pursue the case for you with the insurance company of the other party to get reimbursed.
The best way to resolve your injury claim is by not committing the fatal errors of a rushed agreement. These errors are:
- Agreeing to the offer even if you know it is not fair but you do it anyway just to get it “over and done with.”
- Agreeing to the offer of the insurance company without doing some research on your rights and their obligations.
- Not seeking expert opinions especially if you are inexperienced with injuries claims
You can approach the insurance company to appeal or you can hire an attorney to provide you with legal representation. If you decide to appeal on your own, get a copy of the settlement report and all necessary documents.
Do research on what a fair settlement is, look for inconsistencies in the report, and present them to the insurance company. You can also seek assistance from an independent appraiser, request for a mediator or propose arbitration. Yes, to a point. Each accident though has its specific details as do the insurance policies of both parties which will lead to adjustments on the online calculated results.
However, you should be able to get a general idea of the settlement amount you can expect.
What is the Insurance Process after an Auto Accident?
After or as you are recovering from your car accident, you can file an insurance claim to help you with the expenses. All claims should lead to the approval and payment of a car accident settlement but you have to expect that the insurance company, through a claims adjuster, will investigate the following:
- The seriousness of the accident including people affected
- The nature of the accident
- The extent of the claim vis-à-vis your policy and the insurance company’s policies
- Your social media accounts to see if you have posted anything about the accident
You will have to provide the police report, contact details of the other party, photos of your car, and medical records or damage reports.
The insurance company will then go through the process of indemnification which is payment that will cover damages and anything else covered by the insurance policy. If you are not at fault, the insurance company will seek subrogation (payment or compensation) from the insurance company of the other party.
If you are found to be at fault, the accident and settlement amount will affect have a direct effect on the increased rate, if any. Sometimes, the 2 insurance companies will agree to split the cost if both parties are responsible.
Making the process easier
Car accidents are traumatic and filing for auto insurance claims can be a lengthy and painful process unless you can provide the insurance company with as much information as possible. Naturally, it is important to be as objective as possible because the more colorful your story is, the more reason the insurance company has of doubting your version of what happened.
Make sure you give the following with your claim:
- Details of your insurance policy
- Accident details: date, time, location, and a brief description
- Name of other party and his insurance company
- Police, auto repair costing and medical reports