I had this very minor collision with another driver at the end of 2023, and the damage was purely cosmetic and no police/ambulance was called on sight. The collision was my fault but now the other driver was claiming bodily injury including diagonosis and physical therapy for a total of around $10K which is within my policy limit.
However, due to this bodily injury claim being a bit questionable and scam, my adjustor offered 50% of what they ask for as a settlement. Now I've received this letter from my adjustor saying "Please be aware that a lawsuit may be filed and served on you in the near future………"
**Does this mean the other driver's lawyer rejected my insurance's offer of less than what they ask for and is taking it to court
? What's the point of having insurance when they cannot even settle it for me within my policy limit?
In such cases if it goes to court, do I have to be physically present or I don't have to go and my insurance attorney will take over everything ?
And if they sue for more than my policy limit covers, as my carrier refused to settle with them within my policy limit and only offered less than what they ask for, my carrier in this case should be responsible for out of limit payment if it happens, right ?
This is first time this happens to me and I thank everybody who can offer some experiences or advices. Thank you !!!!!
My car insurance refused to pay other driver’s full bodily injury request and now I might be facing a lawsuit.
byu/LoveThyEnemies inInsurance
Posted by LoveThyEnemies
20 Comments
Give the letter to your insurance to handle. Many people think a minor collision is worth millions but insurance only pays what is reasonable and necessary.
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They aren’t just going to pay out every demand to avoid a suit. Imagine if that happened. Every fender bender would be a policy limit payout
If your adjuster is telling you that, it means there hasn’t been a suit filed yet. There may never be one.
But, no, they will not pay the person what they asked for just because it’s within policy limits.
Part of your insurance coverage is that your ok insurer will defend you if you get sued. This is just saying, hey, they might try to sue you – if they do, notify us and we’ll provide your lawyer.
For “because that’s how our legal system works” reasons, the other party can’t directly sue your insurer but they can sue you. Your insurer provides defense and indemnifies you against judgements up to your policy limits.. this is basically them saying, we’d rather go to court, at our expense, and pay out if we lose, than pay out up front. That’s their prerogative; you are equally protected either way.
Not the question you asked but, $10,000 policy limits is crazy. Raise your limits.
You’re good. Let them sue and let your insurance take over.
If your insurer was offered a settlement within policy limits and decline my understanding is that they are then on the hook for basically any amount. Your insurer fighting is a best case scenario for you.
FYI, insurance companies have better lawyers, usually. Everyone thinks they should sue and there’s a reason your company didn’t pay. Just wait it out and follow their lead, they’ve done this before.
If it’s just purely cosmetic minor collision, it’s very hard and costly for them to prove that it’s the accident cause the bodily injury (if there really are any).
They are just some nasty SOB want to scare you to pay, you have nothing to worry about, just keep all the evidences, and let your insurance handle it, that’s why you are buying insurance for.
> However, due to this bodily injury claim being a bit questionable and scam, my adjustor offered 50% of what they ask for as a settlement.
Normal.
> Now I’ve received this letter from my adjustor saying “Please be aware that a lawsuit may be filed and served on you in the near future………”
Sometimes the part about suing you is an empty threat. Sometimes you actually get served with papers but it’s still an empty threat because they were always going to settle “on the courthouse steps”, or some other time where they don’t actually have to go to court. Some plaintiff attorneys are great litigators but terrible at putting on an actual courtroom trial presentation. I was sitting in jury selection for a significant local criminal trial just a few months ago and the criminal defense attorney was shaking like a leaf speaking in front of ~100 people in the courtroom.
> Does this mean the other driver’s lawyer rejected my insurance’s offer of less than what they ask for and is taking it to court ?
You have to ask your insurer, or if this goes to trial and the plaintiffs somehow get a verdict over your limits you can just ask the plaintiff attorney what settlement offer your insurer rejected.
> I’m wondering regardless of whether his claim seems questionable, insurance company should prioritize protecting me and settle things under policy limit to prevent me from being sued, right?
Short answer is “yes”. Longer answer is “yes, but your policy will plainly say that they will settle any claims made against you “as they see fit”, and you get no say in how/whether they do that. You have to have some level of trust in them that they know what they’re doing.
> What’s the point of having insurance when they cannot even settle it for me within my policy limit? Should I call my adjustor soon and how should I convey my concern with they or maybe persuade them to settle what the other driver ask for and avoid lawsuit ?
The attorney for the person suing you would certainly be happy if you introduced “FUD” (fear/uncertainty/doubt) into the situation.
Here’s what your insurer won’t tell you: If your insurer fucks this up, and the other party gets a verdict in excess of your limits, it’s possible that you could sue your own insurer over that for failing to protect you when they had the chance, and you might actually win that case if your insurer really did fuck up, or even if it’s gray enough that the future jury in the case of *”you vs your insurance company”* simply believes that they did. That does introduce risk for your insurer in *not* settling it, but like other people have commented, your insurer needs flexibility otherwise every single claim would be a “pay me your insured’s limits” demand from the plaintiff attorney.
So here’s some of the possible outcomes:
* Plaintiff settles it before it ever turns into a lawsuit.
* Plaintiff files a lawsuit against you but they settle it with your insurer before it ever sees the inside of a courtroom.
* Plaintiff sues you and it goes to trial but due to certain things happening during the trial they settle it in the middle of the trial before the jury ever gets to discuss it.
* Plaintiff sues you, it goes to verdict, and you win a complete defense verdict. Plaintiff gets nothing.
* Plaintiff sues you, it goes to verdict, and you lose, but the judgement is the same or less than your policy limit. So maybe a bad day for your insurer, but not for you.
* Plaintiff sues you, but both your insurer and the plaintiff are uncertain enough about the outcome that they make a “high/low” agreement in advance where they agree that the damages are capped at a minimum of “X” dollars and a maximum of “X” dollars, regardless of what the jury actually does or does not award. The jury doesn’t know it, but they’re really just there to steer it to one end of that settlement range or the other.
* Plaintiff sues you, it goes to verdict and the judgment is over your policy limit but the plaintiff opts to settle for your limit anyway. Maybe they don’t want to bother with trying to collect the amounts over your limits. Maybe they don’t really want to ruin your life over a simple negligence claim.
* Plaintiff sues you, it goes to verdict and the judgment (whether under or over your limit) is worthwhile for your insurer to appeal, and you win or get a reduced judgment on appeal.
* Plaintiff sues you, it goes to verdict, and the judgment is over your limit and the plaintiff is unwilling to negotiate it and there’s no further grounds for appeal.
All of the aforementioned scenarios are vaguely in the order of their likelihood, from most to least, which is why nobody here is telling you it’s worth losing any sleep over.
Occasionally a plaintiff demand is at your limit and your insurer thinks it’s not unreasonable but that the facts of the case favor the insurer winning it, so they go to trial with it anyway. Basically rolling the dice that they win. If they’re going to do that in a case where the jury in your future case against them would probably “hang them out to dry” then commonly what happens is that if the verdict is over your limit your insurer just eats it. If they do that it’s because when they go ahead and pay it then you have no damages, and if you have no damages you have nothing to sue them over.
That is a perfectly routine and, frankly, helpful letter. All that you need to do is to be aware that someone may show up to serve you with legal papers. Be polite – the process server isn’t suing you, he/she is just doing their job – and accept the papers. Contact your adjuster and let him know that you have been served. He/she will tell you what to do in order to get the papers over to your carrier. They will handle this. It ain’t their first rodeo. Policy limit demands are made every day. It doesn’t not mean that the plaintiff is going to get policy limits, or anything at all for that matter. Your carrier has a duty to defend you, so relax, really!
I am an insurance defense lawyer.
This is normal. As a statute of limitations approaches or as negotiations truly break down, plaintiff will file suit. When you are served with papers, immediately send them to your insurance company. They will assign a skilled lawyer who they will pay( people like me).
If the insurance company fails to settle within your policy limits and the case goes on, they must send you what is called a “policy limits letter” which lays out their obligations and your rights.
I have been in this business since 1974. I have only seen a handful, meaning 5 or less where a plaintiff pursue personal assets from a driver, always when the defendant driver was either an AH, a repeated DUI person and once when the guy went around a stopped school bus which had its lights flashing and sign out.
However, remember the phrase, anything you say will be recorded and can be used against you in court? That holds true in auto accident cases, too. Avoid saying things like”it was my fault” or specifying the details of the accident or your opinions of the plaintiff. In technical terms you are making an admission as a party. In layman’s terms that means insofar as the situation, STFU.
No. They are just trying to prepare you and “draw the sting” for a letter the claimants attorney may send you. Filing a lawsuit costs money so it’s cheaper to scare people with letters threatening suit.
You are, and by extension your carrier, is bound to pay what is reasonable and necessary for the damages you caused. 10k for a normal course of PT is too much. Your carrier is currently trying to negotiate that number down and they may have had some tense conversations with the attorney about the cost of treatment and the attorney gave them an idea they would just try to scare you.
And nothing scares people quite like getting a letter from an attorney threatening a suit.
Will the lawyer of the insurance company defend you if they try to sue?
Your insurance is legally bound to defend you and as you and them have assumed this seems like a scam. If you get sued immediately send it to the insurance and let them deal with it.
🤦🤦 your adjuster is doing their job and not paying out nuisance claims. They offered $5k to make them go away and they didn’t take it. It literally says in the letter that they might file a lawsuit, not that a lawsuit has been filed. And even if they do try to sue, that’s literally why you have insurance lol
This is 2 things
1) a reason to hate all the lawyer billboards, TV, radio and online ads. They are a big reason all of our insurance rates are high af since they chase these bad clients and nuisance claims and inflate them.
2) the insurance co is covering its a$$. Basically, if you were to get sued and not tell them this is their proof that they told you it’s possible and you have contractual duties under your policy to cooperate.
Your insurance co clearly believes the claim is crap and they are calling the bluff of plaintiffs counsel. They wouldn’t (or shouldn’t) do this on a clear policy limit exposure to you. Cooperate with them. It’s not a fun process, but your insurance company has a duty to defend you.
Now, if for some reason (a very long shot in minor accidents) it goes to trial and plaintiff actually succeeds in getting a judgement against you that is over your policy limit you do have a cause of action against the insurer and you likely can sue them for what they exposed you to. In these rare instances you will be surprised at how quickly plaintiffs counsel becomes your best friend and will assist you in hiring counsel to use.
My money is on this being a BS claim and in the near future you will get a letter from your insurance company that states the claim is resolved and you’ve been released from all legal liability. I could be wrong, but there’s a 99% chance I’m right.
Here’s the way it works: the liability is on you, not on your insurance. Your insurance agrees that they’ll pay out $X of liability for you. Generally it would be for a court to decide who is liable and how much they owe. Your insurance company shortcuts that process by making an agreement with the injured party about how much to pay. (injury meaning financial injury here, and bodily injuries cause financial injury) If your insurance company and the injured party don’t come to an agreement, a court case may be necessary.
So what’s happening is the injured party says he should get $10k for his injuries and your insurance company disagrees. He can sue you if he doesn’t want to accept what the insurance company offers. If a court agrees with him, you owe him $10k. Since that is within your policy limit, the insurance company will pay it. Maybe the court disagrees and awards him $5k. Your insurance will pay that.
Edit to add though others have said it already, your insurance company will provide an attorney to defend you in case you do get sued, because they’re covering your liability so it’s in their financial interest to make sure you have adequate defense.
Your insurer is still on the hook, but basically your insurer is saying, “The claimant is full of shit, we’ll take our chances in court because we don’t think a court will award him what he’s asking, and even if they might, we’ll string him along and probably negotiate a lower settlement because his chances are poor in court. FYI: If it goes to court, you’ll be named in the lawsuit, but we got this.”
Your insurance should be able to get a lawyer for you in this situation. I am going through this right now because I had a hypoglycemic attack and my car rolled into someones rear. They sent me a lawsuit a year later because I think my insurance refused to cover the “injuries” because I didn’t receive a citation since it was a medical event