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What Is a Lawsuit?

A lawsuit is a legal claim for compensation filed in court. Usually, in personal injury cases, a lawsuit is filed where all means to reach a settlement acceptable to both parties involved prove futile. This means that not every accident case would involve a lawsuit. In fact, 95% of all car accident cases are resolved or settled without ever going to court.

Usually, after a personal injury case, you should seek medical attention and hire a personal injury attorney. The attorney would initially investigate the case, the police reports, medical records, and other relevant evidence. After this, you might attempt to settle with the at-fault party through negotiation.

But if you’re not satisfied with the amount offered by the other side, you file a personal injury lawsuit. This sets off the discovery phase whereby additional information is gathered by the defendant’s side to reduce the comparative negligence in the accident. After this, a last attempt is made to arrive at a settlement amount. If you are still dissatisfied, you need to go to court on your trial date and wait for the verdict. You might appeal the court verdict if you have reason to believe the court arrived at the wrong decision, either on fault or damages. After this, the final judgment is given by the jury on the damages due for your claim.

ROLE OF THE INSURANCE COMPANY

Some of the situations that could lead to a car accident lawsuit are as follows:

  • The negligence of the at-fault party resulted in an accident in which you sustained injuries and vehicle damage.
  • The at-fault driver struck your car which led to the death of the passenger.
  • The at-fault party struck your vehicle when you were away, for example, when it was legally parked somewhere.
  • Other reasons such as when your insurer refuses to compensate for your damages.

 

Role of the Insurance Company in a Lawsuit

Every state law requires all state drivers to carry liability insurance that provides a certain level of compensation to injury victims as a result of the accident caused by the insured (the one who has insurance). Liability insurance requires the insurer (the insurance company) to defend the insured (the accused driver) and to pay up to the specific limits of their respective insurance policy if they’re found liable to pay. This is the major role of the insurance company in a motor vehicle lawsuit since it is the insurance company involved in the case on behalf of an insured driver.

Generally, because the other insurance carrier will be on the hook for any payment, they will make their best efforts in litigation and settlement to minimize their liability.

Insurance companies would pay for damages and medical bills immediately followed by the accident. If you have uninsured or underinsured insurance coverage, your insurance company will also pay for damages that are not paid by the at-fault uninsured motorist. And if they fail to do so, you can file a lawsuit against them. The insurance company will however pay the valid claims up to the limit of the insurance coverage as mentioned in the contract on the date of the accident.

 

In case the at-fault driver has underinsured insurance coverage, the injured driver can turn to their own insurance company if their insurance policy provides more coverage than the at-fault party.

The insurance company, whether your own or that of the at-fault driver, will pay only when it receives a court judgment that makes them legally responsible to act in that manner. A lawsuit will be filed by the injured driver. The insurance company of the other driver here has the responsibility to hire a lawyer to defend the insured driver in the lawsuit to reduce the amount to be paid by the company on a verdict. However, the insured party is not always provided an attorney but only if the clauses in the insurance do so.

Is it your insurance company’s duty to defend you in a motor vehicle lawsuit?

Your insurance company has to defend you in an accident only if a ‘duty to defend’ clause is present in your liability policy. Duty to defend means that it’s the responsibility of your insurer to provide legal defense by hiring lawyers to defend you against a lawsuit that involves a potential claim on your policy.

This would also include their autonomy to make decisions about whether to take the case to court or to settle without court intervention.

‘Duty to defend’ is different from ‘duty to indemnify’ on the grounds that the insurer will only have the responsibility to pay back once the legal fight is over. In such a case, you would have to find an attorney yourself.

It’s also important to note that the duty to defend is different from the right to defend. In simple terms, duty implies the obligation to defend you against a lawsuit but the right to defend provides your insurance company to choose whether or not to provide your defense.

It’s preferable to have your insurer defend your case since they shall benefit from their extensive network of proven lawyers. They are also skilled in handling complex paperwork, deadlines, and established legal practices and procedures. Also, there shall be no conflict of interest as they too would want to minimize the settlement if a lawsuit is filed against you to keep their costs low.

Insurance companies generally prefer to settle than to go to court because of numerous incentives such as settling a claim with a claimant for a reasonable amount to reduce the risk of paying substantially more if there is a larger verdict at trial.

 

Do you sue the insurance company or the driver at fault?

If you’re injured in an accident and make an accident claim, you will claim with the at-fault driver’s insurance company to settle it. When the claim remains unsettled and a lawsuit is filed, it will be filed against the driver and not the insurance company. Your fight in a lawsuit is against the negligent driver and not the insurance company liable to pay for the insurance coverage. It is the insurance company that will pay you if you win the case by proving the fault of the driver in court. This is known as legal fiction which means that you’re dealing with the insurance company but on paper, it will be against the driver.

 

Time limit to file a lawsuit

After an accident, the statute of limitations of your state shall decide how long you can file a lawsuit for a personal injury claim. A statute of limitations defines how long you have to sue someone for a personal injury case.

In California, the statute of limitations for a personal injury case is 2 years from the date of the accident. But it’s shortened to only 6 months if the claim is against a county, city, or state government agency.

In Florida, the statute of limitations is 4 years from the date of the accident before you’re to file a claim in Florida court.

But if your case involves parties from different states, then it could be moved to federal court where the statute of limitations is only two years.

You should be quick enough to take action because if the statute of limitations stretches too long, or doesn’t follow procedures correctly, your claim could expire, losing your ability to get compensation.

 

Cases where the insurance company couldn’t be of help

Most, if not all, automobile insurance will contain exceptions to the ‘duty to defend‘ clause spelling out the legal void of the insurer’s duty to defend the policyholder and providing a lawyer to defend the insured against the civil lawsuit filed by the other driver. Certain situations where the insurance company is not obliged to defend you in a car accident lawsuit are as follows:

  • If you didn’t notify the company about the accident within the specified time limits of the insurance policy. This especially applies to cases where the delay jeopardized the company’s ability to investigate the case and minimize the other driver’s claim.
  • If you’re accused of having acted intentionally to cause the accident. For example, some insurance companies consider DUI as an intentional conduct to cause an accident that would nullify its duty to defend the insured.
  • If the other driver’s car accident exceeds policy limits. If your policy coverage has a limit of $100,000 and the property damage caused to the other party is more than this, the insurer has no responsibility to pay more than $100,000. The insurer will try to negotiate the same but if no settlement arrives, the insurance company pays its amount and you can be sued for the leftover money.

If in any case, you fail to get help from your insurance company, it’s always considered a smart move to get your own lawyer to file a lawsuit or defend you against a lawsuit filed by the other party. Attorneys would spot an issue you could have overlooked and accordingly devise an appropriate strategy. Even if you have a valid legal claim against your insurance company, a car accident lawyer is the right one to advocate your rights in court.