Can An Auto Insurance Company Sue Me?

Car insurance companies are in existence to help you, but there is more to it than that. It is vital to know not only how auto insurance companies can help you, but also have a larger overall view of how they make money. Car insurance companies are for-profit businesses, and in turn, are looking to make money.

Auto insurance providers are always looking to find the balance between assessing risk so that they can make money and providing competitive prices for car insurance plans, so people buy policies from them. Many factors need to be taken into consideration when putting together costs for car insurance premiums.

Car insurance is a relatively easy insurance to get, unlike some other forms of insurance like health insurance. There are no medical exams needed, and home inspections are not required. A car insurance company utilizes statistics to determine your rates, and there are other considerations they have as well. Auto insurance providers will look at your driving record, location, age, marital status, and in some states, your credit score. Not all states allow companies to use a person’s credit score as a factor in determining rates, however. Another factor that affects your rates is insurance fraud.

Can Your Own Car Insurance Company Sue You?

The answer to this can depend on which state you live in., People cannot be sued for an automobile accident in some states, these states being no-fault states. Even if you cause an accident in no-fault states, it is highly unlikely that you will be sued so long as you have a valid insurance plan. These states include Florida, Hawaii, Kansas, Kentucky, Michigan, Massachusetts, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, Utah, and Puerto Rico.

In all other states, you could be sued after an automobile accident. It is possible to be sued by another person’s car insurance company or in some cases, the other driver themselves. It is also possible to be sued by your own auto insurance provider. Generally speaking, an automobile insurance company will not sue its own clients. If they believe you have participated in insurance fraud, however, a lawsuit from your insurance company is likely.

The way to avoid being sued or accused of insurance fraud is to be honest and thorough with your car insurance claim. If you do not try to scam your insurance company and get more money than you are owed, it is unlikely that your own car insurance provider will sue you. Whatever you do, do not fabricate information when filing a car insurance claim. It is possible to be accused of insurance fraud even when a person is making a legitimate claim. If the car insurance company believes you are lying, when you are being honest, you will need to provide as much evidence to your car insurance company as possible. This can include providing photos and video documentation.

In some cases, you may want to get a free consultation from a lawyer specializing in car insurance cases. Fraud claims are not technically lawsuits in many states, and are processed under a unique set of fraud laws as opposed to as a civil suit. Insurance companies can prosecute you for insurance fraud while not technically suing you.

Types Of Insurance Fraud

There are multiple different types of insurance fraud, which include both hard fraud and soft fraud. If you cause an accident or damage a vehicle on purpose, or fabricate a claim seeking compensation from your insurance company, it is considered hard fraud. Soft fraud is where a person exaggerates a legitimate claim from a legitimate accident but exaggerates the extent of damage or other variables to get more compensation than they should be owed.

Regardless of which type of fraud being committed, there are severe penalties if you get caught. Penalties can include legal repercussions and financial penalties alike. Auto insurance providers pay close attention to behaviors that could be considered suspicious. This includes things like frequent claims histories, financial problems that are recent, or adding more coverage to an auto insurance plan just before a loss occurs.

Who Else Can Sue Me?

You can also be sued by the other person's car insurance company. This is more common than being sued by your own provider and is one of many reasons you should get a police report whenever an accident occurs. Also, getting as much documentation as you can of the damages to your vehicle, the other person’s car, and your property, can be vital.

Most auto insurance lawsuits do not go to trial. Instead, they are settled out of court. Both your insurance company and the other driver's insurance company will usually arrive at an agreed amount. If this amount is within the limits of your policy, you can end up paying nothing out-of-pocket. Suing people takes time and money. In most cases, if an auto insurance provider believes you provided false information, they will terminate your policy. Your own car insurance company may sue you if they think you've committed financial fraud, but lawsuits are expensive. Getting sued by your own car insurance company is rare. It is more likely for another person's car insurance company to sue you after an accident. Your insurance policy will usually cover lawyers' expenses in this case. Communicate with your auto insurance provider, and they will appoint a lawyer on your behalf.