What Happens If Someone Sues Your Insurance Company – Even if you pay your premiums and expect your insurer to honor their end of the contract when you file a claim, insurance companies are generally more interested in protecting their profits than paying you.
After a car accident that causes serious damage to your vehicle, you may think it’s best to repair your car so you can get a new one.
What Happens If Someone Sues Your Insurance Company
However, it can be bad for you If your vehicle is totaled, you can get it for less than its value and less than it would cost to buy new
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On the other hand, your vehicle’s amount may be suitable for the insurance company. It may cost the company less to fix your car than to make all the necessary repairs.
Collision Repair Industry Insights reports that 20-22% of cars were totaled after crashes in 2009. That increased overall by 16% in 2003 and 7% in 1995
Insurance companies usually total the car when the expected cost of repairing the vehicle exceeds its value
For example, let’s say a repair shop pays you $5,000 to repair your vehicle after a collision. If your car is only worth $2,500, the insurance company may total your car.
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When this happens, the insurer may be required to compensate you for the full value of your vehicle
When the car is totaled, it must be appraised by the insurance company to pay the claim Edmunds and Kelly Blue Book are two sources used for appraising cars
However, your insurance company will not rely solely on these sources Instead, your insurer usually uses a complicated formula to value your vehicle For example, a company might consider doing a local search for similar cars or to compile various computerized estimates from dealers
Using a combination of formulas gives your insurer more room to control the price estimate. For example, when researching the market or looking for a similar vehicle, they can target an economical geographic area (like a nearby suburb if you live in a city) where the car can be traded for less money.
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You can dispute the price indicated by the insurance company. However, to make an effective challenge, you should compare other values and value the vehicle itself.
Unfortunately, even if the vehicle is completely repaired, it loses a significant portion of its value because it has been involved in an accident (especially a serious one).
When your insurance company pays for your car repairs, you may still have a breakdown because your car is worth less. In some cases the insurance policy may allow you to request a reduction in costs due to accidents
However it is not possible to claim a reduced price Make sure you check your policy to see if this is an option for you It is important to pay attention to the parts placed in your vehicle
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Your insurer may want to use a generic or aftermarket part instead of a new dealer part Unfortunately, using these old parts can further devalue the value of your vehicle
There is a lot of mystery about how insurance companies set premium rates. It gets even more confusing when determining how an insurer increases premiums after an accident.
Many insurance companies won’t tell you what happens to your rates after an accident. This may dissuade some people from reporting the accident to their insurance company, but it shouldn’t
If you decide to report an accident, you are at significant risk because your injuries and damages could be worse than you initially thought. If you wait and don’t see a doctor right away, your injury may not be covered
What Happens If Someone Else Is Driving My Car And Gets Into An Accident?
You can only think about an accident if you were driving your vehicle at the time of the accident. However, if you lend your vehicle to a friend and that friend has an accident while your friend is driving, you will definitely have to file a compensation claim to insurance.
Filing a claim could increase your rate. You’ll also avoid the cost of damage deductibles, and if your claims from the accident exceed your insurance policy limits, you can sue privately.
These are not chances you want to take So definitely avoid renting a car to friends At the very least, make sure your friends are insured
Insurers may stop coverage in certain circumstances, such as when a customer is involved in a drink-driving accident.
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However, insurance companies cannot wait until you need coverage and then deny your claim and withdraw your policy. If you lied on your insurance application, they may deny your claim
For example, if someone lived in your home and regularly drove your car, but you told your insurer that you were the only driver, this could be considered a serious misrepresentation on your part.
If a family member gets into an accident and injures someone, the insurance company may deny compensation.
Alabama requires every driver to purchase liability insurance However, it does not protect your car or property Liability insurance only pays if you are involved in a car accident that damages another vehicle or injures a other person.
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If you only have liability and comprehensive coverage for your car, your vehicle is not covered and there are no items in your car.
Let’s say you have insurance that covers your car in the event of an accident. If so, it’s important to note that this coverage only provides you with financial compensation if your car is damaged and needs to be replaced or repaired.
If your property or valuables in the car are damaged, your insurance company will not cover the loss.
Call us at 205-933-1500 or take a moment to fill out our online form. Our Montgomery car accident lawyers can help you as soon as possible
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When you rely on our 60 years of combined legal experience denying claims, you will have peace of mind that you have aggressive legal representation to help you make a healthy recovery. Subrogation is a term that describes the rights of most insurance companies Legally prosecute third parties who have caused harm to the insured This is done to recover the amount of the insurance benefit paid to the insurance company by the beneficiary of the insurance
The term subrogation refers to the act of a person or entity acting on behalf of another person. It effectively defines the rights of the insurance company before and after the provision of insurance benefits. It also facilitates the process of obtaining the expected benefits. from the insurance contract
When an insurance company seeks compensation from a third party, it is defined as “putting itself in the insured’s shoes” and has the same rights and legal standing as the insured to recover damages. If the insured cannot sue the third party, the insurer cannot be sued.
In most cases, the individual’s insurance company pays the client’s claim directly and then seeks compensation from the other party or their insurance company. In this case the insured will receive payment immediately and the insurance company will then be able to make a subrogation request against the defaulting party.
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Insurance policies may contain terms that allow the insured to seek compensation from a third party once the claim has been paid. There is no right of compensation against the insurer for the coverage provided by the insurance contract nor to claim compensation from the third party who caused the accident.
Subrogation in the insurance industry, especially auto insurance, occurs when an insurance company accepts the insured’s financial burden due to an accident or injury and seeks compensation from the at-fault party.
An example of subrogation is when the insured driver’s car is destroyed due to the fault of the other driver. The insurance company will compensate the insured driver according to the terms of the policy and then take legal action against the at-fault driver. If successful, the carrier must divide the amount recovered pro rata with the insured to cover any deductible paid by the insured.
Subrogation doesn’t just apply to auto insurance and auto policyholders Another subrogation option occurs in the healthcare industry For example, if a policyholder on a health insurance policy is injured in an accident and the insurer pays $20,000 to cover medical bills, the same health insurance company can collect $20,000 from the defendant for agreeing to pay.
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Fortunately for policyholders, the subrogation process is very passive for no-fault accident victims The subrogation process is intended to protect policyholders;
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