Most people are aware that having car insurance is not only beneficial but, in most cases, mandatory. The fact that car insurance is there to help you in the event of an accident is common knowledge. But what exactly is the car insurance company’s role in an accident case? How does insurance (or lack thereof) affect the value of the claim? Does car insurance have any bearing on determinations of fault? These are specific questions that are crucial to a car accident case, but that few people fully understand. Below is a brief explanation of the role car insurance companies play in car accident cases.
Liability insurance is the technical name for the standard insurance you purchase when you obtain car insurance. It insures drivers and other authorized drivers, usually called the named insureds, against claims against them that arise after car accidents in which negligence and, in most states, recklessness played a part. For instance, if someone makes a claim against you for $50,000 and your policy insures you up to $75,000, you won’t owe anything. However, if those numbers were reversed, you would likely end up owing money.
What Happens When the Value of a Car Insurance Claim Exceeds the Available Coverage?
This is an interesting caveat to insurance that most people don’t know about. Let’s say you get into a car accident, there’s a lot of damage, and you’re injured. You and your attorney decide that your case is worth $125,000. The person you’re filing a claim against has $100,000 worth of coverage. In this case, the insurance company won’t respond to your claim because they have no legal duty to address any claims that exceed the coverage a driver has.
So What About Uninsured Drivers?
Uninsured drivers insurance is often misunderstood. If you purchase uninsured driver coverage on your policy and you’re hit by an uninsured driver, you don’t go after the person who hit you, you make a claim against your own insurance company under the uninsured driver coverage. Again, you’re not usually able to claim anything beyond the limits of your uninsured driver coverage.
Underinsured Driver Coverage
Underinsured driver coverage protects you against drivers whose insurance coverage is less than what is needed to cover damages and injuries in a car accident. Underinsured driver coverage works like uninsured motorist coverage in the sense that you’re making a claim against your own insurance company. There is, however, one catch; with underinsured driver coverage you can only file a claim if the amount of underinsured driver coverage you have exceeds the total policy limit of the person who hit you.
For instance, let’s say you have $50,000 worth of underinsured driver coverage, and the person who hits you has a policy limit of $100,000. You would not be able to claim any underinsured motorist coverage simply because the policy limits of the other driver cover the damages, so they are not underinsured.
Limitations of Uninsured and Underinsured Coverage
The one limitation to both uninsured and underinsured driver coverage is that you can’t neither of them can exceed the amount of general liability coverage you have. For instance, if your general liability limit is $75,000, you can’t purchase uninsured or underinsured motorist coverage for more than $75,000.
As you can see, the role car insurance plays in a car accident case is crucial to your ability to obtain the funds you need to pay for damage, injuries, and other trauma you incur after a car accident. While laws are in place that help to simplify the rules and regulations surrounding what you can and can’t claim, any accident involving injury or serious damage should be handled by a personal injury attorney. Always be sure to call an experienced car accident lawyer after you’ve been involved in a vehicle accident to make sure you get the compensation you deserve. Never take an insurance company’s answer at face value; always consult with a personal injury attorney in your area to make sure your rights are upheld and you don’t have unnecessary financial stress to deal with while recovering from an accident.