- 1. Legal concepts
2. Insurance concepts
3. Settlement process concepts.
Basic Car Accident Claims Legal Concepts
Car accident claims are actually negligence claims.
Negligence is a breach of a duty that causes damages. The general duty imposed on every driver is to use reasonable care in their driving.
Basically, negligence as “carelessness.”
In the context of car accidents, negligence includes these types of conduct . . .
- Driving through a red traffic light.
- Making an unsafe turn.
- Making an unsafe lane change.
- Failing to stop your vehicle in time to avoid a rear-end collision with the vehicle in front of it.
- Entering a roadway when it is not safe to do so.
- Backing up without paying proper attention.
- Being inattentive to your driving because of talking on the phone, texting or anything else that keeps you from paying attention to your driving.
- Driving under the influence of alcohol or drugs.
In the most common type of car accident, a rear-end collision, the striking driver is negligent because he did not keep a safe distance between vehicles and he failed to stop his vehicle in time to avoid the collision.
Proving negligence is the first requirement for a successful car accident claim.
There are possible defenses to a negligence claim.
In 4 states – Alabama, Maryland, North Carolina and Virginia — as well as the District of Columbia, there is a defense called contributory negligence.
Contributory negligence means that the person making the negligence claim was also negligent and that her negligence contributed to causing the accident.
For example, if a driver makes a lane change without looking and collides with a vehicle that is speeding, both drivers would be negligent. The driver changing lanes is negligent for not looking before changing lanes. However, the other driver is contributorily negligent for speeding. In a state that recognizes the defense of contributory negligence, the injured driver’s claim would be defeated by his contributory negligence.
In the 4 states that recognize it, contributory negligence which is as little as a 1% cause of the accident completely defeats a negligence claim.
Many, including me, think this rule is unduly harsh and outdated; but, for some reason, it remains the law in these 5 jurisdictions.
The other states have adopted a fairer rule called comparative negligence.
Although there are at least four different versions of comparative negligence, this is generally how it works.
The negligence of the person making a claim is “compared” to the negligence of the other driver and the claimant’s recovery is reduced by the percentage of her “comparative negligence.”
Let’s use the lane change example discussed above.
If that happened in a state that applied the doctrine of comparative negligence, the speeding driver would probably be determined to be negligent and her recovery would be reduced by the percentage of her negligence. If, for example, she were determined to be 20% at fault, her recovery would be reduced and she could only recover 80% of her damages. But her claim would not be completely defeated as happens in contributory negligence states.
To recover damages in your negligence claim, you have to prove not only that negligence caused the accident but also that each element of your damages was caused by the negligence.
For example, if your neck is hurt in a car accident and you seek compensation for your injury, the defense can claim that the car accident did not cause your neck injury, that you already had the neck injury before the accident occurred or that there was some later cause of your neck injury which is not related to the car accident.
This is one of the most common defenses that insurance companies raise to try to avoid their responsibility to fairly compensate the claimant for all accident-caused injuries.
Questions of medical causation are usually determined by common sense and expert medical opinions.
Basic Car Insurance Concepts
Normally, car accident claims are paid by insurance companies, not individual drivers.
Therefore, you must know basic insurance concepts that are involved in car accident claims.
Every state requires drivers to have liability car insurance. Liability insurance pays if the driver-policyholder is liable for causing an accident.
There are two types of liability insurance, covering property damage and personal injuries.
The personal injury policy limit may be either a single limit, say $100,000, or a split limit. When there is a split limit, the policy pays a maximum amount per person and a higher maximum amount per accident.
For example, bodily injury liability insurance of “100/300″ means that the insurance company can be obligated to pay up to $100,000 per person as a result of an accident but no more than $300,000 total per accident if there are multiple injury claims.
If there is liability, the at-fault driver’s liability insurance must pay both your property damage and fair compensation for your injuries, up to the policy limit.
In addition, you may have benefits under your own insurance policy.
On your insurance policy, you may have a type of car insurance called Personal Injury Protection or PIP (which rhymes with “sip”). In no-fault states, PIP is the primary coverage.
Mainly, PIP insurance pays your medical bills and replaces your lost income. It is a no-fault coverage. You do not have to prove the cause of the accident, just that there was one and that you have had covered losses as a result of the accident.
In some states, if you later recover from the at-fault driver, you will have to repay your insurance company for the PIP benefits they paid. In other states, you will not have to repay PIP benefits paid by your insurance company. So, check the law of your state for details.
Another type of insurance that will pay your medical bills – as well as those of your passengers – is medical payments insurance.
As the name states, this insurance pays your medical bills.
Here, again, the law of the different states varies on the question of whether you must repay MedPay benefits you received from your insurance company if you ultimately recover from the at-fault driver.
A driver is obligated to pay any damages that he causes by his negligence.
That’s the main reason we purchase car insurance, to pay damages if we cause a car accident. Well, that and the fact that the law of all 50 states requires us to have car insurance.
However, many drivers don’t comply with the law. They drive without insurance.
What happens if an uninsured driver causes an accident?
You can chase after them, if you want, hoping that they will have the financial means to pay your damages. But that’s not likely.
A better option is to make a claim under your uninsured motorists insurance coverage, if you have it.
Your uninsured motorists coverage pays all amounts that the at-fault driver would be obligated to pay you for your property damage and personal injuries, up to your policy limit.
In essence, your uninsured motorists coverage functions as if it were the liability insurance of the at-fault driver.
Uninsured motorists insurance also covers damage done by phantom vehicles, where the identify of the driver is never known.
Uninsured motorists insurance pays if the at-fault driver has no insurance. Underinsured motorists insurance pays if the at-fault driver does not have enough insurance.
Say, for example, that fair compensation for your damages is $100,000, but that the at-fault driver only has $50,000 of liability insurance. If you have underinsured motorists insurance of at least $100,000, you can make a claim against your policy for the portion of your damages that the at-fault driver’s insurance does not cover.
When you make an uninsured motorists or an underinsured motorists claim, your insurance company “stands in the place” of the at-fault driver.
In that case, they will treat you as an adversary. Don’t expect special treatment in return for your 20 years of faithfully making premium payments without ever making a claim.
If your insurance company pays you uninsured motorists benefits or underinsured motorists benefits, it has a right to try to recoup its money from the at-fault driver.
Here’s a tip. You may have underinsured motorists coverage even if it is not listed in your insurance policy as one of your coverages. That is because, in some states, uninsured motorists coverage is interpreted to also be underinsured motorists coverage. So check with your insurance agent to see what coverages you have.
If your vehicle is damaged in an accident, your collision insurance applies.
If, for example, the at-fault driver did not have insurance, you can have your car repaired by your insurance company. Or, if your vehicle is totaled, your insurance company must pay your its actual cash value (ACV).
Collision coverages have deductible amounts that you must pay which normally range from $0 to $1,000, or more.
Not everyone has collision coverage, especially on older vehicles. So check your policy to see if you have it.
You may have rental reimbursement car insurance as one of your coverages.
If you have rental reimbursement insurance, it pays for a rental car while your vehicle is being repaired (or until you are paid for your vehicle if it was totaled).
Your policy will include limits on the amount your insurance company must pay per day and on the total number of days they must pay for your rental car.
This coverage comes in handy if the at-fault driver does not have liability insurance. It also comes in handy if the at-fault driver’s insurance company does not initially admit liability and therefore will not promptly provide a rental vehicle.
Of course, if you caused the accident, and you do not have rental reimbursement coverage, you must pay for a rental yourself, or do without.
Basic Settlement Process Concepts
Just as when you are driving, negotiating the car accident claims settlement process is easier if you know where you are going and how to get there.
This is how the car accident claims settlement process normally unfolds . . .
First, property damage claims are resolved. That is, your vehicle is repaired or you are paid for it if it was totaled. If you need one, you get a rental car while the repairs are being done. This is done by the insurance company for the at-fault driver. If you were the at-fault driver, or if the other driver’s insurance company denies liability, your car damage claim is handled by your insurance company under your collision coverage.
Next, even if the accident was caused by someone’s negligence, you submit no-fault claims to your insurance company, such as PIP or MedPay.
If you have additional medical bills or lose more income later, you can file supplementary claims.
Of course, beginning at the time of your accident, you get necessary medical care. You should begin treatment promptly. In many cases, this will happen automatically because you were taken from the accident scene to a hospital by ambulance. If that was not done, as soon as you have symptoms such as pain, numbness, tingling, bruising or anything else that you did not have before the accident, you should see a health care provider.
Not only should you initiate treatment promptly but you should also continue treatment without interruption – or gaps – until your health care providers release you from further treatment.
In most situations, you should wait until you have recovered from your injuries before initiating an injury claim.
Because you only get one opportunity to resolve your injury claim. Therefore, you want to make sure all the information about your medical condition is known before you make your claim. You only know that when you have recovered.
Think of it this way.
When you make an injury claim, you tell a story – the story of your accident, how it was caused and all that you had to go through as a result of the accident. You do not know the whole story until you have recovered and returned to your normal pre-accident health and routine. So, wait until the whole story of your accident is written before making an injury claim.
But keep this in mind.
There is a time limit within which you must either settle your claim or file a lawsuit in court. That time limit is called the Statute of Limitations. All states have them. It is probably at least 2 or 3 years in car accident claims, but the Statute of Limitations could be shorter in the state where your accident occurred.
So, early in the process, learn the statute of limitations and note it in your records. Then, comply with it. If you do not settle or file within the time period set by the statute of limitations, your claim is too late and will be dismissed.
And, if your claim will be against a government, such as a local government that operates the bus that caused your accident, there is an additional time limit, a different and even shorter time limit to notify the government of your claim. These limits can be as little as 30 days. If in doubt, contact a car accident lawyer promptly.
After you recover, you initiate settlement discussions by sending the insurance company a letter – which is alternately called a “settlement letter” or a “demand letter” – in which you document how the accident happened, to show liability, and document all of your losses, to prove your damages.
In your settlement letter, you “demand” a specific amount that you will accept to settle your claim.
Your letter initiates a back-and-forth negotiation that, with solid documentation and reasonable negotiation skills, will lead to a settlement of your car accident injury claim.
If it does not, and provided that the statute of limitation has not expired, you can sue the at-fault driver in court.
In my opinion, you can effectively represent yourself in small claims court, without a lawyer, if you are willing to dedicate time to educating yourself and preparing your case.
However, I think that if you will be filing your case in regular civil court, where there are formal procedures and technical rules of evidence, you must have a car accident lawyer represent you.
After you reach a settlement agreement with the insurance company, or win a judgment against the at-fault driver in court, there are a few details you will have to take care of to complete the car accident claims settlement process.
If you settled, you will have to sign a release of your right to make any more claims as a result of this accident.
Also, after you recover money damages, you will have to deal with any unpaid medical bills or claims for reimbursement from your health insurance company (called subrogation claims).