Car accident injury, insurance, and lawsuit question?

Question

My wife got into a car accident on 2/2004. The accident may have been her fault, as she did not see the speeding car when she proceeded from a stop sign. I far as I know the damage was not too bad. No injuries were reported. We exchanged information. No police report filed. We both have the same insurance company, but the ins. co. said our policy was cancelled. We were with the ins. co. for 7 years. Apparently what happened is the ins. co. did not process our check for payment. Several months later the accident occurred. A representative from the ins. co. asked me several questions which were recorded about the dispute whether or not I was insured, and about the accident. I never heard anything else from the Insurance Company other than a couple of letters stating I was not covered by the ins. co when the accident occurred. On 9/2006, over two years later, I received a call from a collection agency saying I must pay 14,000. Is this valid? Ca. has 2 year statue of limitation law.

Thanks everybody for responding. To answer the questions: we both had the same insurance co. The insurance company is trying to get money from me. Apparently the other driver sued the insurance co, the insurance paid $14,000, and now they are using a collection agency to make us pay. There has been no lawsuit against me, only threats. I don’t understand why the insurance co. waits so long, and while they are being sued by the other driver they don’t notify me.

Answer 1

Always check your local laws. You need to first check within the statue of limitations of your state for a property damage claim. If its within the boundaries the claim is potential. Either the other party or the other party insurance company has sent that file to collection.

A claim is handled in three components. Coverages, Liability & Damages. When I handle a coverage investigation, I will ALWAYS do a recorded interview with the policyholder, which is what happened with you. Those letters your received were denial letters, which are needed for someone to come after you personally. From the accident description you provided above, it appears your wife would be at fault, due to the fact she had a control (stop sign, light, yield sign) and if the other party didnt have any controls. Your insurance company failed to tell you that because your three component of the claim stopped from progressing because you had coverage problems.

When an insurance company pays out on a claim for their insured, and they believe there insured is not at fault, they will do something called subrogation; which is basically going after the tortfeasor (at fault party) for the damages along with their insureds deductible. When they received the denial letter, they are only forced to go after you personally, in which in this case they are legally entitled to do that.

Most insurance companies will work with you on the situation in terms of negoiating the price down and working out a payment plan. Alot of time if you refund the deductible initially up front, they'll take the file out of collections (generally thats what I do in cases like this).

You may need to seek legal advice from an attorney, although many people have done it themselves. And you definately need to get in touch with the Payment Recovery Adjuster for that insurance company.

Hope this helps.

Answer 2

Yes, this is all probably valid. If you were uninsured, the other party would go through their own insurance for any injuries or damages. Their insurance company cannot pursue your company (since there was none), but they will pursue you directly. In many states (I don't know about CA) the statute of limitations doesn't go from the date of the accident in uninsured cases, but from the date a payment is made.

Tell the collection agency you want all documentation of this $14,000 to determine why it was paid. If it was paid though, you do owe it to them.

Answer 3

if you have proof that you sent the cheque to the insurance company then you are legally insured. In Canada and I am sure it is the same all over north America, in order to have a claim for damages you must go to court and get a judgement. In order to go to court you must prove that the other party was notified of a trial date. All insurance companies will do anything, legal or illegal to get money from you. Perhaps you should think about suing the insurance company, otherwise ignore the notice and wait to see what happens.

Answer 4

Who is asking you to pay? The insurance company? If so, what for? If the other person was insured, and you weren't then the other person's insurance should cover their own car. Unless you are taken to court and ordered to pay, I don't think they can make you if you weren't a client of theirs at the time. At this point you would be considered just another uninsured driver.

Answer 5

You need to talk to a California Lawyer...
But I know if you were NOT served with Law Suit Papers for a Civil suit you don't Pay anyone....

A Collection Agency ??? For whom? If the other driver is trying to Collect out side of Civil suit you can file againast him in California.

Good Luck....