Can Someone Sue You For A Car Accident If You Have Insurance?

If you have insurance, can someone sue you for a car accident?
That is the topic of this article: what to do if you are involved in an accident and are sued.
If the accident was your fault, your insurance company’s “duty to defend” includes having a lawyer defend any lawsuit filed against you over the crash as long as it was caused by ordinary carelessness (negligence).

If you didn’t provide proper notice of the crash, or if the accident was caused by your intentional action, among other things, the insurance company may rightfully refuse to provide you with a lawyer to defend you in a car accident lawsuit.

Your insurance company will not step in if you were in a car accident and want to file a claim for injuries or vehicle damage against another driver; you will have to hire a car accident attorney on your own.

Continue reading to learn more about what to do if you have insurance and someone sues you for a car accident.

 

THE “DUTY TO DEFEND” AND CAR INSURANCE POLICIES

In general, we’ll begin this article by discussing whether someone can sue you for a car accident if you have insurance and the duty to defend.

All car insurance policies include language stating that if the policyholder is involved in a car accident and is sued for damages, the insurer will provide a lawyer for the policyholder.

This is part of the insurance company’s contractual “duty to defend,” which is a requirement that applies to all kinds of liability insurance policies.

After all, consumers purchase liability insurance to ensure that they are not personally liable in the event of an accident involving their home (homeowner’s insurance), their small business (commercial liability insurance), or their vehicle (automobile liability insurance) (auto insurance).

However, most, if not all, automobile insurance policies include express exceptions to the insurer’s duty to defend.

In other words, these policies spell out situations in which the insurer’s duty to defend the policyholder, including the obligation to provide a lawyer to defend the insured against a civil lawsuit brought by the other driver, is effectively nullified.

 

YOU DID NOT INFORM US OF THE ACCIDENT/CLAIM.

The duty to defend may be void if the insured policyholder fails to notify the insurer of the accident within the time limits specified in the insurance policy.

This is especially true if the insurance company’s ability to properly investigate the accident and/or minimise its losses in connection with the other driver’s claim has been jeopardised as a result of the delay.

You must carefully read your policy for language stating your responsibility to notify the insurer of any accident that may result in a claim or coverage. This period of time could be as short as 5 or 10 days.

If you don’t notify your insurer of the accident within that time frame, and you don’t have a good reason for not doing so, the company may be able to refuse coverage for the accident.

They may also refuse to provide you with legal representation if you are sued as a result of the accident.

What is a reasonable excuse for failing to notify the insurer within the required time frame?

In most cases, if you were seriously injured and hospitalised, or if you were otherwise physically and/or mentally incapable of notifying the insurer of the accident, that will qualify as an extenuating circumstance excusing your failure to provide proper notice.

Don’t take any chances. If you’re in a car accident and have the ability to notify your insurer, do so immediately, or as soon as possible. Find out how to contact your insurance company following a car accident.

THE CAR ACCIDENT WAS CAUSED BY AN INTENTIONAL ACTION.

If the policyholder is accused of acting deliberately to cause the car accident, coverage may be revoked (and therefore nullify the duty to defend).

Automobile insurance policies typically cover only negligent behaviour, not intentional behaviour.

So, if the insured is accused of causing the car accident on purpose for whatever reason, the insurer is very likely to refuse to cover the accident and to provide a lawyer to defend the insured in any lawsuit filed as a result of the crash.

Some car insurance companies argue that drunk driving is deliberate behaviour on the part of an insured driver, and that if a car accident occurs as a result of a DUI, the insurer may refuse to cover any claims resulting from the crash.

DAMAGES TO THE OTHER DRIVER’S CAR EXCEED POLICY LIMITS

When the damages already paid out by the insurer exceed your policy’s coverage limits, a third important exception to the insurer’s duty to provide a lawyer may apply.

In general, once the policy limits have been paid, the insurer has no further obligations to the insured, including no obligation to pay any additional money to resolve claims or to continue to provide the insured with legal representation.

Let’s say you have $100,000 in liability insurance, but you were at fault for a car accident in which the other driver was seriously injured, resulting in her damages exceeding $100,000.

In that case, the insurer will attempt to settle the case for your $100,000 policy limits, but if it is unable to do so, it may be forced to pay the injured person the policy limits without settling the case.

That means the injured party can now sue you for the balance of her damages (not the $100,000 she already received).

If the injured party sues you, your insurer is unlikely to provide you with legal representation because it is no longer required by law.

It’s important to note that an insurance company’s legal obligations in this situation may vary from state to state. So, if you’re in this situation, speaking with a personal injury lawyer on your own may make sense.

WHAT HAPPENS IF I AM SUED AFTER A CRASH?

If you have insurance, can someone sue you for a car accident? What happens if you are certain you were involved in a car accident?

If you’re in a car accident and the other driver (or even your own insurance company) blames you, you could be facing a lawsuit.

It’s one thing if your insurance company refuses to provide you with a lawyer to represent you in court, but if the insurer also claims that the accident isn’t covered (for whatever reason), any money the other driver wins in court will be your responsibility.

Let’s say the other driver files a small claims lawsuit against you in Texas, where plaintiffs can seek up to $20,000 from the defendant.

The other driver requests the maximum small claims award, claiming that their medical bills, lost wages, and pain and suffering (all of which are referred to as “damages” in the law) total that much.

The judge considers the evidence of how the accident occurred, as well as the nature and extent of the plaintiff’s claimed losses, and determines that you are liable for the full amount of $20,000.

At that point, you’ll face an enforceable lawsuit “judgement,” and you’ll be legally obligated to pay the other driver $20,000 out of your own pocket.

You might have your wages garnished or face other collection actions if you don’t have that much cash on hand.

Of course, if the accident resulted in serious injuries, the other driver may choose to sue you in regular court, where the amount of money they can ask for is usually unlimited.

If a trial is held and the judge or jury finds you responsible for the car accident, you could be ordered to pay a six-figure judgement. Find out what happens if you’re the cause of a car accident.

Having your car insurance company refuse to defend you is not the same as being in a car accident without insurance.

However, because personal financial responsibility for losses resulting from the crash can arise in both scenarios, there are a number of issues that overlap. Find out what happens if you don’t have insurance and get into a car accident.

WHAT DO I DO IF MY INSURANCE COMPANY REFUSES TO PROVIDE ME WITH A LAWYER?

It appears that you were the cause of a car accident, and the other driver has filed a lawsuit against you.

Your insurance company, on the other hand, claims it is under no obligation to pay for a lawyer to represent you in court. So, what’s next? The first step is to have the insurer write down its reasons for making this decision.

You can decide how to proceed after you understand the insurance company’s reasoning.

If you disagree with the insurance company’s reasoning and want them to reconsider their decision that they are not obligated to defend you in the car accident lawsuit, you can contact us.

In a professionally written letter or email, state your side of the story. Make sure to include as many specifics and details as possible, and ask the insurance company to clarify its position.

For instance, if the insurer claims you failed to provide adequate notice of the accident that resulted in the lawsuit, ask them to explain how this harmed their ability to investigate and/or defend the claim.

This can quickly become uncharted territory for insurers, as some denials of coverage can be construed as “bad faith” on the insurer’s part.

It’s a rare occurrence, but if a separate legal action is filed and a “bad faith” investigation is conducted, the insurance company will be forced to pay far more than it would have to defend you against the other driver’s lawsuit.

Learn more about car insurance claim denials based on “bad faith.”

Finally, if for no other reason than to show the insurance company that you mean business, inform them (firmly but politely) that if they don’t reconsider their position, you intend to consult with a car accident lawyer about your options.

GETTING ASSISTANCE WHEN YOUR INSURER REFUSES TO DEFEND YOU

The most important takeaway from this article on “can someone sue you for a car accident if you have insurance?” is how to get help if your insurance company refuses to defend you.

If your insurance company refuses to provide you with a lawyer (or tries to deny coverage) after a car accident that appears to be your fault, having your lawyer involved may prompt them to reconsider their position.

The lawyer might notice something about your accident that you missed, or devise a strategy you hadn’t considered.

As we mentioned earlier, a lawyer may be able to persuade the insurance company to reconsider its stance and decide that defending the lawsuit against you is a better business decision than fighting it out with you and your lawyer.

A lawyer might agree to represent you (and be paid on an hourly basis) solely to persuade the insurance company to reconsider its legal obligation to defend you.

This isn’t the cheapest option, but if you’re facing a large court judgement, it might make financial sense.

A car accident lawyer might represent you on a contingency fee basis if it turns out you have a valid legal claim against your car insurance company.

That is, the lawyer is only compensated if you receive a favourable outcome (via out-of-court settlement or court judgment). Under a contingency fee agreement, if you don’t get paid, the lawyer doesn’t get paid.

You can use the tools right on this page to connect with a car accident lawyer in your area and get a sense of your best path forward, no matter which angle you’re thinking of pursuing in the wake of the insurance company’s decision about your car accident.

By answering a few questions about your case, you can even get a free case evaluation from a local car accident lawyer.