There are hundreds and hundreds of questions about car insurance and car crashes. The answer to each question may be different based upon the state where you live or the state where the crash occurred. In addition, insurance policies are not alike, and the answer will depend also on what your insurance company wrote in the insurance policy which was sold to you. In this section of the Hill, Peterson, Carper, Bee & Deitzler, PLLC website, we explain some basic insurance issues.

Nothing here should be taken as legal advice for your individual case, because all cases are different. Each claim is based upon the facts of the case, the insurance policy that applies, and the state law which governs the application of the insurance policy. If you have an accident and need, or want, specific answers, please feel free to call one of our lawyers anytime. The initial consultation is always free. We may, or may not, be able to assist you, but you are always welcome to call.

1. What Does My Car Insurance Do?

Most car insurance usually does one of three things. The insurance may pay you or a family member if you have a claim. It may pay someone else who has a claim which the insurance covers. Or it may pay for an attorney to defend you if a claim is made against you.

A. Payments To You

If your car is stolen or damaged, most insurance policies will pay you, at least in part, for that loss (see "Damage Coverage" subtitle below). If you are injured in a car crash, most insurance policies will pay a portion of your medical bills regardless of fault (see "Medical Payments Coverage" subtitle below). If you are injured or your car is damaged due to the fault of another driver, your insurance policy may provide for payment of part or all of the loss that the other driver's insurance does not cover (see "Uninsured and Underinsured Coverage" subtitle below). Other family members who are injured in a car wreck may also be entitled to the same benefits, even if you are not one of the drivers who is involved (see "Who Is Covered" subtitle below).

B. Payments To Others

In the event that you are at fault in causing injury to others or damage to property through the use of a motor vehicle, your car insurance will pay (up to a certain limit) the amount of money that you owe to the other person (see "Liability Coverage" subtitle below). In effect, through the use of insurance, you are paying the other person what you owe (your personal responsibility) and your insurance company is reimbursing you for what you had to pay. Legally, this concept is known as "indemnification."

Key to the concept of indemnification is the fact that the injured party has a claim against you, not your insurance company. If you do not owe, your insurance company does not owe either. But if you do owe the injured party, your insurance company "indemnifies" you by paying what you owe (up to the amount of your policy limit).

In some states, including West Virginia, if your insurance company has the opportunity to resolve all claims against you within the amount of your insurance coverage, but refuses to do so, it will be responsible to pay the entire amount of any jury verdict against you (with no upper limit). That is because the insurance company has a legal duty to fully protect you if it can do so by payment of a fair and reasonable amount that is within the policy limit that you purchased.

C. Legal Defense

In addition to helping pay for injuries and losses, most insurance policies require the insurance company to hire a lawyer who will defend you if a claim is made against you. That policy provision is referred to as the insurance company's "duty to defend." Ordinarily, that responsibility of the insurance company (to provide a lawyer who will defend you) stays in place, even after the insurance company has paid the maximum amount of money that it is required to pay under your insurance policy provisions (see "Policy Limits" subtitle below).

2. Do I Have Full Coverage?

There is no such thing as "full coverage" in an insurance contract. Every insurance policy is subject to limitations and restrictions which are listed in your insurance policy. The extent of those limitations and restrictions usually depends upon the amount of money that you are willing to pay and the type of coverage the insurance company is willing to offer.

Regardless of what your agent tells you, when an accident occurs, what the insurance company will or will not do is always determined by the terms of your insurance policy and the law of the state where the accident occurred or in which the policy was sold.

To get a general idea of what coverage you have, look at your most recent insurance bill. Ordinarily the insurance coverages are listed on that invoice. Lawyers and insurance agents refer to the listing of coverages on your bill as the "declarations sheet."

A. Liability Coverage

Liability coverage is the portion of your insurance policy that requires the insurance company to pay what you owe to somebody else as the result of a motor vehicle collision in which you were at fault to some degree. This coverage includes payment for injuries to other people, regardless of whether they were in the other person's vehicle or in your own vehicle. It also includes payment for property of others that you damage. It is important to realize that the total amount that the insurance company will pay does not exceed the amount of coverage that you purchased, commonly known as the "limit of liability" or "policy limit" (see "Policy Limits and Deductibles" subtitle below).

B. Medical Payments Coverage

Although optional, most insurance policies have a provision that pays medical bills when you, your family members, or your passengers are injured in a motor vehicle accident. Even if you have health insurance, this can be a very helpful coverage to purchase. After a crash, if your medical bills are first submitted to your health insurance carrier (such as Blue Cross, for example), there is almost always an amount for which you are still responsible. The remaining amount due may be a co-payment or a deductible. If you have medical payments coverage on your car insurance policy, you can use car insurance to make up the difference. Like liability coverage described above, the amount that the insurance company will pay depends upon the policy limit that you purchase.

C. Uninsured And Underinsured Coverage

In our law practice at Hill, Peterson, Carper, Bee & Deitzler, PLLC, we find that many of the people who may seriously injure you in a car crash either do not have insurance, or have insufficient insurance coverage to pay your medical bills or to fairly compensate the people whom they hurt. Because of that problem, insurance companies offer uninsured motorist coverage and underinsured motorist coverage. If a person with no car insurance injures you or damages your automobile, your own insurance policy's uninsured motorist coverage will pay you for your loss up to the amount of coverage that you purchased. If the person who injures you or a family member simply has insufficient insurance, the underinsured motorist coverage that you purchased for your policy will provide compensation for you, your family members, or passengers in your car.

Unlike liability coverage, which is intended to pay somebody else who is injured by you (often someone whom you have never met), uninsured/underinsured motorist coverage provides compensation to you, a family member, or a passenger. For that reason, it makes sense to purchase at least as much uninsured/underinsured motorist coverage as you have liability coverage. It is the uninsured/underinsured motorist coverage that protects you and the people who are dear to you. Also, most people do not realize that uninsured/underinsured motorist coverage under most policies, covers you and your resident family members regardless of whether you are in your car, in someone else's car, or not in a car (a pedestrian) when struck by a vehicle. In that regard, uninsured or underinsured motorist coverage "follows you" wherever you go.

D. Damage Coverage

Most insurance policies will provide separate coverage to pay for damage to your car, regardless of fault. This is necessary because most of us cannot afford the loss of our vehicle under any circumstance. Whether the accident is your fault or the fault of someone else, you need to have your car, truck, SUV, or van fixed or replaced so that you can move on with life. Like all coverages described above, the amount which the insurance company is obligated to pay may be subject to limits based upon the amount of coverage that you decide to purchase. Alternatively, some policies provide for payment of all amounts up to the actual cash value of the vehicle, depending upon the degree to which the vehicle is damaged or repairable.

E. Policy Limits And Deductibles

The policy limit is the amount of coverage that you purchased in each of the four general categories listed immediately above. It is the maximum that will be paid by the insurance company, even if the loss exceeds the policy limit amount. In West Virginia, the minimum liability coverage policy limit that can be purchased is $20,000. More typical coverages are $50,000, $100,000, or more. Because of the fact that you will owe for whatever damage you cause, you should purchase liability insurance that takes in to account your personal exposure to pay for injury or property losses which may exceed the total amount of the insurance coverage.

In a related consideration, whatever amount you are unwilling to risk losing to someone else is also the amount that you would not want to lose as a result of the actions of someone else that injure you or damage your property. Therefore, your uninsured and underinsured motorist coverage should have no less policy limit than your liability coverage. If you are willing to purchase liability coverage to compensate a likely stranger, you reasonably will want to buy an equal amount of coverage for yourself, your family, or your friends who ride in your car.

The policy limit for medical payments coverage is a different situation. Your entitlement to payment is not affected by who is/was at fault in the accident. Typical medical payments coverage on a State Farm policy, for example, is $10,000 or $20,000. That amount can go a long way toward offsetting co-payments and deductibles in a serious injury case. Some other insurance carriers offer very low medical payments coverage limits (such as Nationwide's $500 and $1,000 typical coverages). Low medical payment policy limits are of virtually no help in serious situations.

While you are thinking about policy limits, do not forget to verify that your coverage for damage to your car or other vehicle is at least equal to the value of the vehicle that you are insuring. It is an unwelcome shock when you suffer damage to a $25,000 vehicle only to find that your insurance policy only covers up to $10,000 on the loss. Note also that most property damage coverages are subject to deductibles, similar to the deductible which is contained in typical health insurance policies. The deductible means that for any loss, you pay personally for the loss up to the amount of the deductible, after which the insurance company takes over payment up to the amount of the policy limit.

3. Who Is Covered?

Other than yourself, you may not realize that when you buy an insurance policy, you are buying protection for a number of other people too. Protected people might include your family members, your passengers, and any person whom you allow to drive your car.

A. Liability Coverage Follows The Car

Generally, purchased insurance applies to the vehicle that you insure, no matter who is driving it. If there is a crash, and the person driving your car has his own insurance, your insurance (the insurance you bought on the car) still pays first. If the insurance on your car is used up in paying for the driver's liability (damage caused by a driver of your car), then the driver's insurance begins to pay next. After that, if both the insurance covering the car and the insurance covering the driver are insufficient, the injured parties can next seek compensation from their own insurance policy's underinsured motorist coverage. When that happens, you may be faced with a personal claim made against you by the other person's insurance company if your lawyer has failed to negotiate a complete release before your own policy limits were paid.

B. Your Liability Insurance Goes Where You Go

Most insurance policies protect you (and insured family members) regardless of whether you are driving your car, driving someone else's car, driving a rental car, or driving a recently purchased car (for a short period of time). Therefore, to some extent the insurance policy sticks with the car (as described in the preceding section), and to some extent it sticks with you (and family members) subject to any specific exclusions listed in your insurance policy. Therefore, you should be entitled to coverage regardless of what you are driving. Be aware, however, that your coverage may not "follow you" into other countries. Before leaving the United States, make sure that your current insurance policy will protect you, or purchase separate insurance specifically for that purpose.

C. Family Members

Family members who reside at least occasionally at your home may be covered in many more situations than you realize. If family members are covered, liability insurance may protect them, regardless of what they are driving. Even when not insured for liability, resident family members are usually covered by medical payments and uninsured/underinsured motorist coverage under your car insurance policy.

In most situations, for example, if a child in your household is struck by an irresponsible driver who has inadequate insurance, your uninsured/underinsured motorist coverage (and possibly your medical payments coverage) is available to compensate your child, even though neither you nor your family vehicle was anywhere near the scene of the crash. The same is true if your child or other resident family members are injured while riding as a passenger in someone else's vehicle. Ordinarily, they would still be covered under your insurance policy.

What about the situation where you or someone in your family causes a crash that injures other family members or passengers in the same vehicle? Most insurance companies do not tell you this, but your insurance liability coverage also protects and provides compensation for family members (and other passengers) in such situations. Technically, the family member or injured passenger must make a claim against the driver (you may have been the driver), but the insurance company has no excuse for not paying for the injuries of that person. Remember, you did not buy insurance coverage just to protect total strangers.

D. Dual Residency

Unlike voter registration, for purposes of insurance coverage a person can have more than one residence at the same time. This is important when it comes to family members attending school, in the military, or temporarily working at another location. It is also important when a family owns or occupies two or more homes.

Typically, people do not buy a separate insurance policy for a covered family member who is living elsewhere to go to school, work, or serve in the military. If there is a loss in such situation, it is important to leave no doubt with the insurance company on the issue of dual residency. Tell the company that your family member kept residency at your home. If the family member intended to keep partial residency at your home, the policy language should provide coverage.

4. WHAT/WHO IS NOT COVERED?

There are two basic places to look in your policy (insurance agreement) to determine whether or not somebody or something is covered under your insurance. First, to be covered, the loss has to be described in the insuring agreement. Second, it cannot be described in the list of items specifically not covered (the exclusions).

A. Insuring Agreement

In almost any insurance policy, the contract includes a relatively short paragraph, often called the "insuring agreement," which describes what the insurance company is agreeing to pay for. There is some type of "insuring agreement" paragraph with regard to each of the coverages described in the policy (i.e., liability, medical payment, uninsured/underinsured, and auto damage). For example, a typical insuring agreement for liability coverage says that the insurance company will pay damages for bodily injury or property damage for which you become legally responsible because of an auto accident. The important thing to remember is that if the loss for damages does not come within the description of the "insuring agreement", it is not covered.

B. Exclusions

Somewhere buried in almost every insurance policy, far beyond the "insuring agreement" described immediately above, is a section that pulls out and eliminates many of the losses that would otherwise fit within the description of the "insuring agreement." These exceptions are often referred to as "exclusions." If something is listed in the "exclusions," that means the insurance contract does not provide for payment of the described item. You should look at your policy to see what is excluded. Typical exclusions include claims by the United States Government, claims from people who are covered by worker's compensation, and claims for damages that occur if you would use your car for commercial services, such as taxi service, auto repair business, or other business-related usages.

5. Trusting Your Insurance Company

Most of us rightfully trust our insurance agent. The agent tries to help policyholders like you and me purchase coverage that reflects our needs within the limitations of what we can afford. However, trust of the insurance company itself is a totally different matter from trusting your agent.

A. The Insurance Company

Unlike the agent who sold you the policy, the insurance company (i.e., State Farm, Nationwide, Progressive, or whatever company is actually named on your policy) does not know you and does not have feelings of like, dislike, or concern for you. The insurance company is a corporation owned by stockholders and operated to make a profit for the stockholders. For that reason, what the insurance company will do, or will not do, is determined only by the words in the insurance contract and the law of the state where the contract is being applied. The insurance company will pay as little as possible on your claim or the claim of anyone else.

B. Insurance Adjusters

The person who administers the insurance contract between you and an insurance company is commonly referred to as an "adjuster." Even in cases involving your own insurance company, the adjuster works for the insurance company, not your insurance agent. The adjuster gathers the facts about the loss that you or another person has suffered, compares those facts with the insurance policy, determines whether or not the incident is covered by the policy, and makes a decision as to what the insurance company will or will not pay. The adjuster's primary loyalty is to the insurance company, not to you or your insurance agent.

C. Why Will An Adjuster Call Me?

In the event of an accident, an insurance adjuster may call you representing your insurance company, or an adjuster may call you representing someone else's insurance company. In either event, the adjuster is reviewing the loss and attempting to determine how to resolve the loss by paying out the least amount of insurance company money possible. The adjuster is calling you to gather information which will help the adjuster accomplish that task.

D. Must I Talk To The Adjuster?

If the adjuster is calling on behalf of an insurance company that covers somebody else, you have no duty to speak with that adjuster. If the call is related to injuries that you have received, the adjuster is attempting to gather facts to determine whether you or the other person is at fault. If the adjuster finds that the other person is at fault, the adjuster will gather facts to try and determine how much will be paid.

Adjusters are highly trained for both tasks. Their calls are carefully scripted based upon extensive psychological research, studies, focus groups, and the experience of the insurance company and adjuster with regard to similar claims. Some adjusters will intentionally deceive you. For example, at one time Allstate adjusters representing the other person were instructed to tell you that they were your insurance adjuster. You do not have to speak with an adjuster without your attorney being present on the call or at the interview. If in doubt, contact an attorney.

E. How About My Own Insurance Company's Adjuster?

If you are involved in a crash, your insurance company will assign an adjuster to assess whether or not you will be found at fault, and if so, how much money the loss is expected to cost the company. Under the terms of your insurance policy, you are required to cooperate with that adjuster in terms of providing truthful and timely responses. Even in that circumstance, however, there is nothing in any insurance policy that prevents you from consulting an attorney who has your interests at heart. That becomes particularly important if there is a question of whether or not the insurance will apply on your behalf. In a close call, a trained adjuster can cause you to say things that will invalidate your insurance coverage. If that happens, you will be left holding the bag despite the thousands of dollars you have paid in insurance premiums.

You may also be contacted by an insurance adjuster from your own company who is responsible for uninsured or underinsured motorist coverage. At that point, your own insurance company is defending and representing the other driver, not you. That adjuster is not on your side. If a lawsuit should occur, your uninsured/underinsured insurance adjuster and an attorney hired by your insurance company will both be working directly against you. For that reason, it is appropriate and fair for you to specifically inquire as to which coverage an adjuster is inquiring about. It is unethical and possibly illegal for the insurance company to use information acquired while defending you (information that you provide to your liability coverage adjuster) against you when you make a claim for the uninsured or underinsured motorist coverages.

F. Your Duty After A Crash Or Loss

Virtually all insurance policies make it your responsibility to promptly contact your insurance company and report any crash or loss which may be covered directly or indirectly by the insurance policy. In addition, the insurance policy will require you to cooperate with the insurance company with regard to the investigation and defense of claims against you. Most policies provide that if you fail to do either, the insurance company can refuse to pay for the loss. Both provisions make good sense, because if you are asking the insurance company to protect you, it would be illogical for you not to cooperate.

6. Will My Case Go To Court?

Most insurance claims never make it to court. The vast majority are resolved before that point by agreement. However, when the parties cannot agree, the case will necessarily end up in court. When insurance companies refuse to pay valid claims, injured people have no place else to go.

A. Do I Need A Lawyer?

Most small insurance claims are resolved without legal representation. If you get a dent in your car, ordinarily you do not have any reason to call a lawyer to get your insurance agent to issue a check and put you back on the road. Often your agent has the authority to pay such claims without the use of a company adjuster. Also, if you suffer a minor injury with only a few hundred dollars in medical bills, you can often obtain fair compensation from most reputable insurance companies with little or no legal assistance.

However, when injuries are serious or property damage is severe, you almost always need an attorney. Take advantage of a free attorney consultation with an experienced personal injury law firm. A reputable attorney who primarily practices in the field of vehicle and insurance litigation can explain the issues that you will face so that you can make an accurate assessment as to whether or not legal counsel will be needed.

B. Will I Need To File A Lawsuit?

Lawsuits become necessary when insurance companies fail to pay valid claims. That can occur for a number of reasons. Sometimes it is based on an insurance company's corporate decision to "low ball" claims. Sometimes it is due to a failure of communication with regard to the facts or damages, and sometimes it is simply an honest disagreement as to the amount of fair compensation to which the injured party is entitled. Regardless of the reason, if your attorney and the insurance company lawyer or adjuster cannot come to an agreement, the only remaining choice that you have is to file a lawsuit.

C. Do All Lawsuits Go To Trial?

Our experience at Hill, Peterson, Carper, Bee & Deitzler, PLLC tells us that only about five to ten percent of filed lawsuits make it to the courtroom. After a lawsuit is filed, the exchange of information between your attorney and the other party and the insurance company becomes much more intensive. Sworn statements (called depositions) will be taken of you, many of your doctors, witnesses to the accident, and the other party. Experts are hired. The insurance company has the right to have you examined by their paid doctors. Sometimes the case will be diverted to arbitration by agreement. Sometimes mediation is conducted instead. When any case is placed in litigation, additional expenses are incurred by both parties. Each side ordinarily makes a serious effort to compromise and reach an agreed resolution. If that fails, there is no place else to go other than a courtroom trial.

D. If There Is A Trial, Then What?

A trial means that you and the other people involved will go to a courtroom before a judge and present your respective positions to a jury. The jury is made up of randomly selected citizens who will do their absolute best to treat both sides fairly. The jury is not told that the real dispute is between you and the other person's insurance company. The jury usually thinks that the other person had to personally hire a lawyer, and usually the jury believes that the other person will have to pay the verdict from his/her personal resources. Ordinarily, nothing could be further from the truth.

The other person's insurance company will hire a lawyer who will tell the jury that he/she represents that other person. Neither the lawyer nor the client will mention the fact that the insurance company is paying for both the lawyer and the full amount of any verdict that will result. Similarly, the jury is not told that your legal fees, and case expenses, will by paid by you, nor the fact that reimbursement of all of your medical bills to your health insurance carrier will also be paid by you out of whatever verdict the jury returns. Therefore, at the point when all other options have failed and your case lands you in front of a jury, it is critically important to have a competent attorney at your side. In spite of all of the obstacles which we have just described, a trial may be your only chance to receive justice.

E. Who Gets The Money?

When a claim is resolved with or without a lawyer, regardless of whether the resolution is through settlement or trial, you are still personally responsible to pay the medical bills or vehicle repair bills related to your settlement or verdict. If your medical bills have been paid through health insurance or government benefits, the health insurer or government almost always has a right to be repaid out of the money which you receive. The legal/technical term for that repayment right is called "subrogation." Sometimes you or your attorney can negotiate a reduction of the amount which you owe, but subrogation claims cannot be ignored.

Sometimes the medical provider will agree to defer collection efforts on medical bills until the end of your case. However, the fact that you have received money, or have not received money, to resolve your claim does not relieve you from the obligation of paying your medical bills. Medical providers expect to be paid regardless of whether you get car insurance money or not. Sometimes, your attorney can negotiate a reduction in the amount of medical bills owed if you do not receive enough money to pay outstanding medical bills.

The same situation of personal responsibility applies with regard to the cost of repairing or replacing your car. Regardless of whether the insurance company compensates you or not, you will be expected to pay the bill. In addition, be aware that if the amount of compensation from the insurance company is insufficient to pay off the value of your car in a total loss claim, you will still be stuck paying the difference to the bank.

You need to be aware that in today's world, nobody gets double payment. If you get money through an insurance claim or litigation for something that somebody else has already paid for, in most cases that money must be paid back to the person or company who made the original payment. Sadly, when your case goes to trial, the law prohibits the jury from being told about the fact that the payments that have already been made on your behalf, will necessarily be repaid from the verdict that the jury returns. Instead, the jury mistakenly thinks that your health insurance paid the bills and you will get to keep the money.

We at Hill, Peterson, Carper, Bee & Deitzler, PLLC have included this information explaining your obligation for bills and repayment because most insurance adjusters do not tell you about it. Typically, the adjuster offers you a lump sum settlement, and more often than not, you may mistakenly assume that the insurance company's settlement money is in addition to any amounts which you have previously received.

Hill, Peterson, Carper, Bee & Deitzler, PLLC accepts motor vehicle accident cases on a contingent fee basis and all fee arrangements are provided to clients in written form. Please Contact Us for additional information or a free consultation.

© Hill, Peterson, Carper, Bee & Deitzler, PLLC

All Rights Reserved