What to Do When the At-Fault Driver’s Insurance Won’t Pay
If an at-fault driver’s insurance company won’t pay your claim, it doesn’t mean the case is over. It means that you have some work to do to get money to cover your injuries and other losses, whether it’s involving your own insurance, negotiating a settlement or filing a lawsuit.
If you were in a car accident that was someone else’s fault, you expect a quick and reasonable settlement from that driver’s insurance company to pay for your damages. If your car was hit and the other driver’s insurance won’t pay, it’s a slap in the face. It also may mean serious financial hardship as you struggle with medical bills, lost income and repairing or replacing your automobile.
It’s not a lost cause. There are options to get the at-fault driver’s insurance company to pay a fair car accident settlement. To do so, you must have all your ducks in a row, from understanding why the claim wasn’t paid to how to proceed from there.
Hiring a car accident attorney who knows the ropes can also go a long way toward negotiating a fair settlement, or even filing a lawsuit, if that’s what it takes to get the at-fault driver’s insurance to pay.
“There are many factors that play a part in negotiating fair compensation,” Louis Patino, of The Patino Law Firm, in Texas, said. “If you are representing yourself against a seasoned adjuster or attorney, you will get taken advantage of in many ways.”
Find Out Why Their Insurance Won’t Pay
When an at-fault driver’s insurance company denies your claim, they should tell you why in writing. If they don’t, call the insurance company and ask for a written explanation. You can’t fight a claim denial unless you fully understand why your accident claim was denied.
Even a written explanation, though, may not make sense to anyone but a claims adjuster. Car insurance claims can be complicated and the jargon dense. Make sure you can have it explained in a way you fully understand it. If the at-fault driver’s company won’t explain, there are others who can help.
Since your own car insurance company was also involved – you had to notify them of the accident – you should discuss the denial with your insurance company. A representative there can explain the denial. It’s possible that the reasons for it being denied are legitimate, and they can help you understand them.
If you’re not happy with your insurance company’s explanation, a car accident attorney can also help.
Most offer free consultations, in which they can explain the denial to you, as well as whether you have a case to fight it. If they agree to take on your case, they will likely do it on a contingency basis, which means you pay nothing and the attorney gets their fee if they win the case.
Reasons the Insurance Company Would Refuse to Pay
There are many reasons an at-fault driver’s insurance company would refuse to pay. They may have to do with your role in the accident, but could also have to do with the at-fault driver’s coverage, and even the state you live in and its policies. Some of these reasons may end up being a brick wall, but most of them can be disputed.
Let’s take a look at some of the most common reasons and what you can do if the at-fault driver’s insurance won’t pay.
You Didn’t File Correctly
If you didn’t include required documentation when you filed, you can appeal, and this time, include what you missed. Missing the filing deadline may be harder to appeal, but it’s worth trying. Follow the insurance company’s guidelines to the letter and include everything that’s needed.
The At-Fault Driver’s Insurer Denies Liability
If the other driver’s insurer disputes fault, it doesn’t mean they’re right. You can appeal through the company’s appeal process, and include evidence that proves their driver is at fault. They have reason to believe they can back up their determination, so it’s wise to hire an attorney, who can prove your case.
The At-Fault Driver Was Using the Car for Ride Share
If the at-fault driver was driving for a ride-share company (like Lyft or Uber), their liability coverage likely won’t cover it. If they have separate insurance for rideshare activity, you can file a claim with that insurance company. You can also seek uninsured motorist coverage with your own insurance (if you have it), or file a lawsuit against the rideshare company or the driver.
The At-Fault Driver’s Behavior Nullified Coverage
If the at-fault driver was doing something that nullified their insurance coverage – breaking the law (driving under the influence, excessive speed, driving to endanger etc.), driving a stolen car or even deliberately caused the accident, their insurance can refuse to pay.
You can file an uninsured motorist claim with your own insurance or file a lawsuit against the driver.
The At-Fault Driver’s Insurance Lapsed
If the at-fault driver hasn’t paid his premiums and his insurance was canceled before the accident, the insurance company will deny your claim on the basis that the insurance lapsed. This is another case where your own uninsured motorist coverage can pay, or you can sue the driver.
If you in a state with shared liability, which makes you partially responsible for damages, you may not get a full payout from the insurance company of the driver who hit you. Contributory negligence states – Alabama, Maryland, North Carolina, Virginia, Washington, D.C. – hold that drivers even 1% negligent don’t get paid by the at-fault driver’s insurance. Other states have comparative negligence, which means you may be liable for a percentage of the damages. You can appeal, but seek help from a car accident attorney, who knows the law.
You Live in a No-Fault State
In the 12 no-fault states, drivers must have Personal Injury Protection (PIP) coverage, which is the primary payer when the driver is injured in an auto accident. You can only seek damages from the at-fault driver if you reach a threshold, either monetary or by injury. If the at-fault driver’s insurer believes you didn’t, they’ll deny your claim. You can appeal if you can prove that you’ve met your state’s PIP threshold.
Insurance Company Questions Your Injury, or Accuses You of Fraud
The at-fault driver’s insurance company may claim your injury isn’t as severe as you say it is, or that your entire claim is fraudulent. If you have good documentation of your medical bills and can prove your injuries resulted from the accident, you can counter this claim. Hiring an attorney is vital in this situation, particularly if you have a pre-existing condition, didn’t seek medical treatment right away or can’t access your medical records.
Your Options When the At-Fault Driver’s Insurance Won’t Pay
There are options if your car was hit and the at-fault driver’s insurance won’t pay. The one that’s right for you depends on your case and the reasons for denial. Car accident law can be tricky, so if your claim was denied, consulting an attorney is always a good idea.
If the at-fault driver’s insurance company didn’t investigate properly, ignored information you supplied, or didn’t give you a valid reason for denial, that’s a bad-faith denial. An attorney has the tools to fight this. It’s also a good idea to contact your state insurance department and report them.
If it wasn’t a bad-faith denial, it’s still a good idea to hire an attorney to pursue you case.
“If the insurance company sees that a claimant does not have a lawyer, they may try to make lowball settlement offers or issue frivolous denials of claims,” Don Wruck, founder of Wruck Paupore PC Injury Firm, said. An attorney knows how to communicate with the insurance company and all the tasks that go with appealing or negotiating a settlement, he said.
Studies show that cases handled by an attorney are more likely to be resolved successfully, and result in larger settlements or judgements for the claimant.
Whether you hire an attorney or not, the options, once a claim is denied, are:
Filing a Claim with Your Own Insurance
If you have collision insurance, you can file a claim for your car’s damage with your own insurance. This helps if you need repairs or a new car, given that insurance disputes can last months or more. Your out-of-pocket deductible will be reimbursed if your insurance company pursues subrogation – the process through which they pay your damages, then seek reimbursement through the at-fault driver’s insurance. If you’re in a comparable negligence state, your deduction reimbursement may be reduced, depending on your percentage of liability.
Generally, your auto insurance won’t pay your medical bills, then seek reimbursement. If the other driver wasn’t insured, and you have uninsured motorist coverage, it will cover some of your medical bills. Health insurance will cover your immediate medical bills. Keep in mind, if you do get a settlement or court judgment, your health insurance will be reimbursed.
If you have PIP, required in no-fault states, or MedPay, an option in most states and required in Maine, your insurance company will pay your medical bills up to your coverage limit. How much your insurance company will get back from the at-fault driver’s insurance – if anything – depends on the state, some of which don’t allow subrogation for PIP or MedPay, or only allow a certain amount to be reimbursed. This may result in higher insurance premiums for you.
Negotiating a Settlement with the Insurance Company
You may want to negotiate a settlement if the at-fault driver’s insurance won’t pay when you first file a claim. Find out what the insurance company’s appeals process is, since that will be your starting point.
It can take anywhere from four weeks to years to negotiate a settlement. Some settlements, after a lawsuit is filed, happen almost literally on the courthouse steps the day of trial.
The first step is to hire an attorney, since they know how to work with insurance companies, know the law and are experienced in these types of negotiations. The next steps, any of which can lead to a settlement, are:
- Notify the insurer of the appeal
- Send a demand letter with specifics of your case, including documentation
- Say no to the first offer
- Make a counteroffer
- File for arbitration, which is binding; or mediation, which is not
- File a lawsuit
- Agree to a settlement and sign a release that prohibits you from seeking more money.
Filing a Lawsuit Against the At-Fault Driver
If attempts to settle for the amount you need to cover your medical expenses and other losses from the accident fail, file a lawsuit. This option is more likely to lead to a settlement than a day in court – more than 90% of cases settle. It helps your case, and your pocketbook, to be represented by an attorney. Studies show that clients represented by an attorney are more likely to have a positive outcome in a car accident case, and also more likely to get a bigger settlement.
Keep your eye on the clock – it starts ticking from the day of the accident, and you only have so much time to file a lawsuit. The statute of limitations on personal injury lawsuits after car accidents range from 1 year in Kentucky to 6 years in Maine and North Dakota. In most states, it’s 2-4 years. The deadline can differ in a state for personal injury claims and property damage claims. In Rhode Island, for example, it’s 3 years for personal injury, but 10 years for property damage.
Once your lawsuit is officially filed in court, the attorney will start an investigative process, including getting reports and records (police reports, medical records, witness statements etc.), depose witnesses, seek expert testimony and more.
Pros of Filing a Lawsuit
- It’s likely to trigger a settlement offer from the at-fault driver’s insurance company
- It can help you recoup more out-of-pocket expenses than a settlement would
- Lawsuits allow the plaintiffs in most states to seek pain and suffering compensation
Cons of Filing a Lawsuit
- Your lawyer’s contingency fee will increase from around 33% to 40% or more, and extra costs will also increase
- If you lose, you’ll get much less money than you were likely offered, or no money, from the insurance company
- If you sue an individual with no insurance coverage, the likelihood of getting reimbursed is low.
Should You Hire an Attorney if the At-Fault Driver’s Insurance Won’t Pay?
If you were hit, but the at-fault driver’s insurance won’t pay, an initial free consultation with a car accident lawyer will give you a good idea of whether you have a solid case. If the attorney takes your case, they will likely agree to do it on a contingency basis in which they get 25% to 45% of the settlement or judgment (depending on the cases complexity and whether it goes to court).
After the consultation, you can also hire an attorney on a limited basis to send a demand letter, review a settlement offer or perform other tasks that take some legal expertise. They attorney would charge you a flat fee or hourly rate in these circumstances.
If you’ve been denied a claim from the at-fault driver’s insurance company, your first step should be to consult an attorney.
- Gordon, J. (2021 September 24) Defenses to Negligence – Explained. Retrieved from https://thebusinessprofessor.com/en_US/criminal-civil-law/defenses-to-negligence
- N.A. (2018, February) MedPay/PIP subrogation in all 50 states. Retrieved from https://www.mwl-law.com/wp-content/uploads/2018/02/MED-PAY-PIP-SUBRO-CHART.pdf
- N.A. (2022, August 18) Rideshare Insurance. Retrieved from https://www.marketwatch.com/picks/guides/insurance/rideshare-insurance/
- N.A. (ND) Car Accidents: Statutes of Limitations. Retrieved from https://www.enjuris.com/car-accident/statutes-of-limitations/
- N.A. (ND) How to file an auto insurance claim. Retrieved from https://www.iii.org/article/how-do-i-file-claim
- N.A. (ND) What is subrogation? Retrieved from https://www.insurance.wa.gov/what-subrogation
- N.A. (ND) What should I do if I am having trouble settling my claim? Retrieved from https://www.iii.org/article/what-should-i-do-if-i-am-having-trouble-settling-my-claim
- Rivelli, E. (2022, May 12) How quickly must an insurance company pay a claim? Retrieved from https://www.insurance.com/features/how-quickly-must-my-insurance-company-pay-a-claim.aspx