How To Make A Claim Against Someone Else’s Car Insurance

Christin Walker of Burlington, New Jersey, is a responsible motorist. She demonstrated this by driving a school bus full of noisy and often rambunctious children on country roads and city streets for 22 years.

However, even competent drivers might be involved in a car accident. A hit-and-run driver who, according to the police report, sped through a red light wrecked and totaled her used 2006 Honda Civic less than a week after she purchased it. Walker considers herself fortunate that she was not injured. Less than a month later, the same motorist was engaged in another accident that killed a pedestrian.

Among the issues are that she has yet to receive a compensation from any insurance company, that she has no automobile, and that she is still required to make loan payments on the Honda that is now rusting in a recycling center. She's angry enough to file a claim against the driver of the automobile that hit her.

If Walker decides to file an insurance claim, she will not be alone. According to the National Highway Traffic Safety Administration, around 6 million collisions are reported by police in the United States each year. Every year, over three million individuals are wounded or killed in car accidents, resulting in a large number of lawsuits and insurance claims.

Making an Insurance Claim Against Someone Else

If someone else hits you, you'll most likely file a claim against their liability insurance. This is known as a third-party claim, because you are the third party in the eyes of the other driver and their insurance carrier.

The claim will be processed by the other person's insurer, but don't expect a rapid settlement. The insurer may want to look into the accident to see if their customer was genuinely at fault.

Using Your Own Insurance to Fix the Problem

But if insurance claims were easy, we'd all be insurance experts. And when someone else causes an accident, it's natural to believe that they should pay for their actions. However, even if someone else slammed into you, you may need to use your own auto insurance in some instances. Here's how it might happen.

Using your own insurance situation as an example No. 1 is a no-fault state: In jurisdictions with no-fault insurance regulations, you must always file an injury claim with your own insurance company first. Personal injury protection (PIP) insurance is required in these states for this purpose. You can sue another motorist only if you meet certain requirements, which vary by state. In many circumstances, major damage or death must occur before you can sue someone else for an automobile accident in a no-fault state. (In most cases, property damage claims can still be filed on the other person's liability insurance.)

PIP and a related policy known as medical payments (MedPay) are frequently available in states without no-fault laws. These can be used to file injury claims on behalf of you and your passengers.

Using your own insurance situation No. 2, an underinsured driver: What if the driver lacks sufficient insurance to cover accident injuries? You could still suit them for the remaining, but if they have no assets, it might not be worth it. If you have underinsured motorist coverage, one option is to use it. It can pay for medical expenses if the other motorist does not have enough insurance.

Using your own insurance situation No. 3, not dealing with it: Instead of dealing with the other person's insurance company, you could choose to use your own insurance for car damage. You can use collision insurance for car damage caused by someone else if you have it.

The disadvantage is that your insurance payment will be lowered by the amount of your collision deductible. If your insurance company seeks compensation from the other person's insurer, you may be able to recoup your deductible.

If you have rental reimbursement coverage, you might use it to pay for a rental car while your vehicle is being repaired as part of a collision claim.

Using your own insurance situation No. 4, getting stuck with a car loan balance: If your vehicle was totaled in the accident, insurance should compensate you for the car's worth at the time of the accident, whether you file a liability claim against another driver or use your own collision insurance.

However, this does not imply that the problem has been resolved. In rare situations, you may owe more on a car loan or lease than the vehicle is worth. This can happen, for example, if you financed the majority of the car's purchase or if you have a vehicle that has rapidly depreciated in value. In any scenario, gap insurance will cover the difference between the insurance premium and the loan/lease debt.

Or You Could Sue

Another option is to engage a lawyer and sue the other driver for compensation.

You may need to assist in establishing that the other person was truly at fault, especially if they begin pointing fingers at you. Items such as a police report, images from the scene, and contact information for any witnesses will aid in proving you were not at fault.

If the expected payout for a car accident is tiny – under $3,000 – and you have a strong case, you could go to small claims court against the other driver.

While the laws vary by state, most local governments operate some form of small claims court. Filing fees are often low, and the average wait period for a hearing is approximately a month or two. You may also subpoena witnesses, such as the other motorist, the insurer's claims adjuster, and anybody else who may have been involved in the collision. Have all of your information, as well as official estimates for the cost of repairs, on hand.

The benefit of this procedure is that it requires the other person's insurance company to send a lawyer and any witnesses need to support its case – or to contest the amount of the lawsuit – to court. This might pave the way for settlement discussions.

At the Scene of an Accident

Protecting your right to sue begins at the scene of the accident. It's a good idea to keep an accident checklist to assist you gather the necessary facts.

If you're in a car accident, the first thing you should do is take a step back, recover your breath, and make sure you and your passengers are not wounded. Even in a bumper-bump, soft tissue injuries are a worry, and injuries boost the stakes for an insurance claim.

Even if no one is hurt, the collision will be distressing for both (or all) persons involved. In the inevitable exchange of driver information, try to keep your (and their) road rage to a minimum. If feasible, pull over to a safe location. If you don't have to, don't stand on a busy or fast-moving road. And, if at all possible, stay in the car, contact 911, and wait for the cops.

If the parties are reasonable, make sure they have everything they need to submit a claim, and that you have everything you need as well. Someone else simply requires the information on your insurance ID card. Many insurance companies include a car accident checklist in their mobile apps, or you may print one and store it in your glove compartment.

However, your cell phone is the most valuable equipment following a car accident. Take photos of the damage to your vehicle and the other vehicles involved, license plates, road conditions such as ice, rain, or snow, and any other circumstances that may have contributed to the accident, such as adjacent intersections and road signs. Take a picture of the insurance ID cards of the other drivers. Make a note of any witnesses' names and phone numbers. Your phone should date stamp and record the time you took the photos.

Verify the responding officer's name and badge number, which may be illegibly scrawled on whatever paper you get. Obtain a copy of the police report as soon as it is submitted and double-check its accuracy.

Contact your insurer as soon as possible, regardless of who was at fault. In this case, too, technology may come to your aid, as many insurers allow you to file claims using their mobile apps.

"Make careful to submit the claim within your insurer's time restriction," says Loretta Worters, vice president of the Insurance Information Institute, a trade group. "Typically, deadlines for reporting vehicle damage claims are 30 days, so ask your insurance if your policy includes a time limit for submitting bills, resolving claims disputes, and providing extra information."

Understanding Basic Car Insurance Types for Claims

It's a good idea to examine your auto insurance policy after a car accident. This will help you remember what coverage you have. Your insurance agent may have previously informed you of what you are – and are not – entitled to, but double-check. This is why having a reliable insurer with a solid reputation comes in handy.

Every auto insurance company provides the same basic coverage options. The compulsory ones differ by state, while the rest are optional – and certain optional coverage kinds are a good investment.

Liability is the most fundamental type of coverage for all cars. You must have this in case you accidentally strike a person, a car, or even a garden gnome in someone's yard. Medical expenditures, property damage, lost wages, and pain and suffering are all covered by liability insurance.

Almost every state mandates some form of liability insurance, but the amounts vary. In California, for example, a single participant in an accident is only required to have $15,000 in injury coverage. With rising medical expenditures and a litigious society, that sum may be tragically inadequate.

You may be sued for amounts that exceed the limits of your auto insurance. A large quantity of auto insurance is a means to secure what you've worked for if you have assets and funds.

If you are sued for something covered by your policy, such as a car accident, your liability insurance will also pay for your legal defense.

Collision insurance is optional unless your auto loan or lease requires it. This insurance covers damage to your car if you collide with an object such as a pole or another vehicle. According to the Insurance Information Institute, around 73% of drivers with auto insurance have collision insurance.

Collision insurance is typically sold in conjunction with comprehensive coverage, so expect to purchase both. Comprehensive insurance is also optional, unless needed by a car loan or lease. It covers theft, fire, hail, vandalism, and other miscellaneous dangers such as colliding with a deer or driving through water that conceals an overflowing creek.

No-fault auto insurance laws in some states mean that there’s no need to determine who’s at fault in order to receive payment for smaller injury claims. Each party is paid by their own insurer instead of bringing a lawsuit. Personal injury protection is the coverage for these claims.

Personal injury protection (PIP) is frequently used in conjunction with a no-fault statute. It pays for medical expenditures resulting from a car collision, regardless of who is at fault. However, no-fault statutes do not preclude the possibility of being sued, especially if the accident resulted in significant injury or death.

"True 'no-fault' incidents are extremely unusual," says Sandra Watts, a spokesman for the non-profit United Policyholders, which provides insurance information. "Unless the accident occurs in a no-fault state, some percentage [of blame] will be assigned to each of the parties involved, which normally leads in one of these parties being primarily at fault."

Keeping Patience

Being patient is essential whether you're dealing with an insurance claim or a lawsuit. Understanding your coverage will assist you in determining what you are entitled to. However, the first step is to purchase the proper coverage in the first place.