I was in a car accident in March. It was determined as my fault. I just received a letter from my insurance adjuster stating that the claims for damages may exceed my policy limits. The letter stated that I have the right to consult legal counsel in this matter. What do I do in this situation?
2007-07-11 19:47:50 · 5 answers · asked by Tiffanie W 1 in Cars & Transportation ➔ Insurance & Registration
You don't say if the excess damages are from a vehicle damage claim or from injury claims. I will address this as if the excess is possible from an injury claim since that is the most common. If it is from vehicle damages then EDIT your post and I can provide some advice on that.
Please don't let the other answers scare you too much. This situation has the "potential" to be serious but seldom is. It is highly unlikely that you will end up paying anything. You do not automatically have to pay any money back even if the claim is worth more than your policy limits.
Legally, your company has to send you that letter if they think the claims "might" exceed your policy limits. Here is what you should do and can expect.
1. If you haven't already done so call your adjuster and talk to them about what makes them think the claims might exceed your policy limits. Do this so you are informed about what is going on.
2. Your company has a duty to defend you and must do everything it can to settle the claims within your policy limits and protect you from excess claims. Send them a letter stating that you expect them to do so and request that they notify you of any and all changes that effect the value of the claims against you. Make sure to include a request to be notified immediately if the other insurance company decides to "substitute a draft". I'll spare you the details of what this means but it is important to tell your company to notify you ASAP if it happens.
3. If your company pays out your policy limits they need to obtain a release from the other party stating that they won't come after you for any addt'l money.
4. The only real thing you need to be concerned about is if the other party makes a UNDERINSURED MOTORIST BODILY INJURY (UMBI) claim to their own company. UMBI's get very complex and I'll spare you the complete details as I would need an hour to type all the info.
As a short example, let's say that you have $25,000 of liability coverage but the injured persons claim is actually worth $35, 000. They can collect 25K from your company and then 10K from their own company. If that happens then the other company may seek to have you reimburse the 10K. However, it does not happen often, (I have done it less than a dozen times during a 20+ year career as a claims adjuster).
In this situation the other company will do an asset check on you to see if you have the ability to pay back the 10K. Most of the asset checks I have done over the years indicated that most people didn't have the assets to repay the claim. If you don't have much for assets the other company will sign off on coming after you and you will be in the clear.
Most decent companies do not make a habit of screwing with people who bought insurance, even if they have low limits. You probably followed the laws of your state and bought the minimum policy limits required. The only people I ever tried to collect excess money from was drunk drivers. I have no sympathy for them at all and enjoy making their lives even more miserable.
OK on to the issue of getting a lawyer. I'm not a lawyer but have handled dozens of UMBI claims from both sides of the claim. I suggest holding off on the lawyer until you are actually notified by your company that the other company will be coming after you. (substituting their draft) I assume some posters will not agree with this advice, but there is nothing a lawyer can do until the other company decides that they actually will seek reimbursement.
I strongly suggest that you keep in touch with your adjuster on a weekly basis. I would suggest email as then you have a written record.
Hang in there.
2007-07-12 03:55:27 · answer #1 · answered by fighting saints 6 · 0⤊ 0⤋
If the claims exceed your policy limits, you will be responsible for paying the amount above your policy limits. I don't know how old you are, whether you're single or married, but this is extremely serious. If you are a minor, they can come after your parents' assets. If you are a minor, you'd better talk to your parents about your options. If you're an adult, you had better start looking for an attorney.
2007-07-12 02:57:13 · answer #2 · answered by Scott H 7 · 1⤊ 0⤋
Do as the letter said and seek legal counsel!
(And get higher limits on your insurance for the future!! With the costs of litigation today, anything less than 100/300 is foolhardy.)
2007-07-12 08:04:45 · answer #3 · answered by Bostonian In MO 7 · 0⤊ 0⤋
You're in deep. Get an attorney ASAP. It means you are responsible for all damages in excess of your policy limits. You could be looking a large judgement.
2007-07-12 09:44:05 · answer #4 · answered by Anonymous · 0⤊ 0⤋
In addition to speaking with legal counsel, start hiding your assets. They won't come after you for money, if they think you don't have any.
2007-07-12 10:42:12 · answer #5 · answered by Hekler 4 · 0⤊ 0⤋