I’m Being Sued for a Car Accident. What Now?

ELI5: Negligence

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Let’s say you’ve been in a car crash and it’s been determined that you’re the at-fault party. As if that isn’t stressful enough, you’ve just been informed that you’re being sued. At this point, you may be wondering if it’s time for freak-out mode.

How It Normally Works

Let’s say that you caused a car accident that injured the other party. Normally, the injured party would file a claim with the insurance company, the insurance company would offer them compensation for their injuries, and you’d be finished hearing about this nonsense before you know it. But sometimes the insurance company denies a claim in bad faith or, more commonly, they don’t offer the injured party enough financial compensation to pay for all the party’s injury related expenses. This is where personal injury lawyers get involved. Normally this happens when the injuries are more severe and require more costly medical treatment. Those who have sustained only minor injuries don’t always benefit from filing a personal injury claim.

When Personal Injury Lawyers Get Involved 

When insurance companies aren’t willing to fairly compensate the injured party, a personal injury attorney may get involved. The personal injury attorney will begin compiling evidence to show the insurance company why their client deserves a certain amount of compensation. The personal injury attorney will compile that evidence in the form of a demand letter. Negotiations usually begin once the attorney sends the demand letter. The insurance company and the personal injury attorney negotiate with each other in order to get the client a fair settlement. Instead of going to trial, the insurance company agrees to fairly compensate the client and the client accepts that offer. Most cases settle this way. If you’re the at-fault party, the insurance company will do all of this on your behalf.

The Purpose of Insurance

The purpose of insurance is to protect the insured from any damages they may cause. You pay your car insurance company a premium (or fee) on a regular basis. This may be a monthly, quarterly, semi-annual, or annual arrangement. In exchange for this fee, your insurance company agrees to cover the cost of any damages you cause, up to a certain limit. This is your policy limit. If you have a $50,000 policy, your insurance will cover up to $50,000 worth of damages. When someone sues you for an accident that you cause, your insurance company will generally be the ones to make the settlement offer and pay for the settlement offer. Assuming you’re current on all payments, of course. However, your insurance company may determine that you’re more likely to get into an accident and, therefore, should have higher rates.

What about an Excess Judgment?

Having good insurance isn’t necessarily a license to drive like a maniac, however.

If the damages you cause exceed your policy limits, you may be personally liable for an excess judgment. So, if you cause $100,000 in damages, but you only have a $50,000 policy, you may be ordered to pay the remaining $50,000 that your insurance didn’t cover. Most personal injury attorneys don’t go after defendants for an excess judgment because few have the assets available to pay the excess judgment. For the most part, judges will not order someone to sell their home, or primary vehicle, in order to liquidate assets and pay an excess judgment. So where does that extra $50,000 come from? Well, that’s the thing: most people don’t have that. And it’s not usually in the client’s best interest to go after a defendant when there isn’t any feasible way to collect the judgment against the defendant.

When There Isn’t Any Insurance

Sometimes there isn’t any insurance at all. When a defendant has no insurance, and no way to compensate the plaintiff for their injuries, that can spell trouble for the injured party. Again, if a personal injury attorney cannot collect from the defendant, it won’t matter what fee the defendant is ordered to pay. If the money isn’t there, it’s simply not there. One of the best things you can do to protect yourself from a situation such as this is to make sure you have uninsured motorist insurance. If you have uninsured motorist insurance, the insurance company may still pay even though the at-fault party was uninsured. There’s also under-insured motorist insurance for situations where the at-fault party did have insurance but they didn’t have enough of it. Because of this, we always recommend that people take advantage of the underinsured motorist and uninsured motorist coverage their insurance company offers.

When Injury Strikes

If you’ve been injured in an accident due to the negligence of someone else, contact Moxie Law Group today to get started on your free consultation.

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