Automobile Collisions and Insurance Claims
Dealing with automobile collisions claims can present additional demands on top of the accident that just occurred. No one knows just when a collision may occur, so it is best to be prepared beforehand in the event that the situation arises. You should understand how to report an accident so you don't have to try and figure it out at the scene of a crash.
A majority of car accidents are remedied through settlements with an insurance company before they get a chance to be litigated. A settlement can help avoid the extra costs in time and money that are associated with a lawsuit. Some insurance companies actually include a prohibition against lawsuits in their insurance terms, instead requiring arbitration or mediation, or no litigation at all.
The Purpose of Automobile Insurance
Most people cannot afford to cover the costs associated with an automobile collision. These costs may include such things as car repair bills, medical bills, and lost wages. For this reason, private insurance companies exist in order to help people shoulder such expenses. This serves the role of reducing much of the financial burden for both private citizens and the state.
Owners and operators of automobiles can purchase insurance by paying monthly rates for varying degrees of coverage. The types of accidents that an insurance company covers, and the amount of money they will provide for accident costs, depends on the type of coverage that the person buys.
Laws regulating the operation of insurance policies are different from state to state, so be sure to have a basic understanding of the insurance laws in your state and local jurisdiction.
"No-Fault" Insurance Policies
The majority of insurance purchased for automobiles is called "no-fault insurance". There are many forms of no-fault insurance packages available to consumers. The basic idea behind no-fault liability is that the insurance company will only cover drivers who purchase their insurance, and will not compensate for injuries caused to others. Some no-fault insurance policies limit recovery to instances of "very serious" injuries or collisions.
The term "no-fault" comes from the theory that if everyone purchased no-fault insurance, then all accidents would be covered, and it would not matter who caused the accident. In reality, not everyone carries insurance, and so some people have to resort to lawsuits in order to recover damages.
Traditional, strict "no-fault" policies originally prohibited people from bringing a lawsuit in the event of an accident. However, this too is impractical in reality. Recognizing this need, any state that imposes a no-fault liability requirement also provides for the option of suing in civil court. So while not all states require no-fault policies, the states that do are technically hybrid no-fault states in that they also allow lawsuits.
Reporting an Accident to the Insurance Company
Regardless of the type of automobile accident, the insurance company will require at least a basic amount of information regarding the incident.
You, however, should provide a report that is as detailed as possible, which will also be helpful in case a lawsuit is necessary in the future. After an accident, be sure to collect the following facts and documents:
- Details of the accident
- Names, phone numbers and addresses of the parties involved
- License plate numbers of the cars involved
- Contact information of any witnesses and accounts of what they witnessed
- Any police reports or traffic tickets
- Photographs of the collision scene including the cars involved
- Photographs of any injuries
- Medical bills and hospital records
- Hourly wage stubs from your employer to determine any amount of lost wages
Demand Letter to the Insurance Company
Understandably, insurance companies seek to compensate victims of a collision for the least amount of money possible. Your main avenue of negotiating with the insurance company will be in a "Demand Letter" sent to the company which outlines the details of your insurance claim. A demand letter should include the following:
- Reasons why you should be compensated
- Reasons why the other party and their own insurance company would be accountable
- Any injuries you received, as well as the effects of those injuries (such as an injury that interferes with your employment)
- Any medical costs you have already incurred and future costs
- Loss of income
- Any damages
- Demand statement for a specific amount of money
Even if a lawsuit is not anticipated, you may still wish to consult an attorney who can help you prepare important documents such as a demand letter.
Settling with the Insurance Company
Insurance companies will usually respond to your demand letter with an offer that is less than the amount that you requested. It is important that you employ bargaining skills while remaining honest about the compensation that you need. Insurance companies will easily be able to spot any suspicious or frivolous claims involving excessive amounts of money. Your expenses must be directly related to or caused by the accident.
If the claim is satisfied, the insurance company will provide coverage based on the package that you purchase. The coverage will typically help with repair and medical costs. In some cases insurance companies will provide a rental vehicle for use while your automobile is being repaired.
Considering a Lawsuit
In the event that you cannot settle and are considering suing the other party, remember that automobile accidents are like other personal injury cases. You must be able to prove the following in a court of law:
- The opposing party owed you a duty of care (i.e., to drive in a reasonably safe manner)
- The opposing party's acts resulted in a breach of the duty of care
- Their breach was the cause of the accident
- Actual damages resulted from the breach of duty
If you cannot prove any of these elements, you will not be able to recover in a lawsuit. For example, if you cannot prove that the other party caused the accident, you will not be successful in court. Be sure to examine these basic elements before spending time and money on a lawsuit.
The current attitude towards obtaining recovery in an accident is that it is better to settle than to get involved in a lawsuit. If your injuries are great, or you feel that there is malice and wrongdoing involved, a lawsuit can sometimes be appropriate. Consult a lawyer for important decisions such as bringing a lawsuit.
Recap: Tips for Obtaining a Timely Insurance Settlement
In closing, here are some tips that will help you succeed on an automobile accident insurance claim:
- Collect information and file a report and demand letter as soon as possible
- Obtain information on the insurance policies of any other parties involved
- You may wish to obtain a lawyer early on so they can help you with negotiating and signing
- Use basic bargaining and negotiating skills- don't agree to a settlement offer without understanding your own position
- Have a basic knowledge of your state's laws and regulations on insurance
- If you are considering a lawsuit, understand the elements that you will be required to prove in a court of law