Can Someone Sue You for a Car Accident if You Have Insurance?

In this article, we examine the topic of whether someone can sue you for a car accident if you have insurance. 

If you have been involved in a car accident and think you may have been at fault, you may be worried about any legal action the other party might want to take against you. Before even considering your insurance policy, it’s important to know how your state’s laws deal with these types of situations.

can someone sue you for a car accident if you have insurance

Are You in A No-Fault State or a Tort State?

In no-fault states, a person who has been involved in a car accident is generally required to seek any form of compensation from their own car insurance coverage. The circumstances under which someone can step outside of the no-fault system and file a lawsuit are very limited.

That means that even if you don’t have insurance but live in a no-fault state, the other driver most likely can’t sue you and seek compensation directly from you. This is typically the case when injuries aren’t deemed “serious” or “significant” or when the medical expenses don’t exceed a certain amount of money.

However, that also means that you will probably be unable to take any legal action against the other driver if they were technically at fault for the accident and your own insurance will be responsible for covering your damages. The thinking in no-fault states is that everyone is responsible for their own problems and drivers cannot hold someone else liable for property or even injury damage.

States that don’t follow the “no-fault” insurance system – which are in the majority – are called tort states. In those states, if you are responsible for a car accident and someone is injured, they can sue you for all the damages they suffered from the accident, including medical bills, property damage, lost wages, and physical and mental suffering.

If you are uninsured, you are personally responsible for paying these damages and you will have to pay everything out of your own pocket.

I Have Insurance, Can I Still Get Sued?

can someone sue you for a car accident if you have insurance

Unfortunately, yes; even if you have a car insurance policy, it may still be possible for the other party to sue you if the damages exceed your auto insurance’s coverage level and you were found to be at fault for the accident.

Fortunately, an auto insurance policy reduces the financial repercussions of being sued. Having liability coverage ensures that the insurance company will pay for any settlement or judgment against you up to the limit you purchased. You may also receive a lawyer that will represent you in a lawsuit as well as coverage for certain expenses relating to the lawsuit.

The insurance policy should be enough to cover injuries and penalties in most cases, but if that isn’t the case and you can’t make the remaining payments out-of-pocket, your personal assets can be taken to satisfy the judgment won by the other person.

If you are being sued, the first thing you should do is notify your insurance company and give them the suit papers so that they can hire counsel which will defend you. Failing to report the suit in a timely manner may jeopardize your coverage, so be sure to take care of that as soon as possible.

can someone sue you for a car accident if you have insurance

If it’s been a while since the accident and you are hit with a lawsuit: immediately contact your insurance company. If you’ve changed companies since the accident occurred, contact the company that originally handled the case, as your original coverage should still be valid, and they should still be responsible for providing you with the protection afforded in the policy at the time of the accident.

Statute of Limitations

One important thing you should do is find out what the statute of limitations is in your state. If too much time has passed, filing any new claims against you would be pointless. Lawyers know about the statute of limitations and if the suit is filed by a reputable attorney, that will likely not be an issue. However, some disreputable representatives may try anything to pressure you into paying more money than you are liable for.

In most situations, the policy of the at-fault person is enough to cover any penalties and injuries. In those very few circumstances where this is not the case, you will know about it very shortly after the accident. If someone files a lawsuit a year or more later, they will have to show a great deal of causative effect and they will have to explain their delay.

Can They Sue Me After Agreeing to Settle?

Typically, when settling a claim with the insurance company, the other driver is required to sign a release which prevents them from filing any other claims in the future. This applies regardless of whether they face any other accident-related expenses in the future.

The only way a case may be reopened after agreeing to settle is if the other party disagrees with your attorney or insurance company on the terms of the settlement. The release the other party needs to sign is usually very straightforward in car accident cases, but disputes can still arise.

can someone sue you for a car accident if you have insurance

If the dispute is serious enough, the other party can sometimes back out of the settlement, depending on whether they settle before or after filing a suit.

If the settlement was reached before any lawsuit was filed but the claimant doesn’t want to sign the release, their only option is to file a lawsuit and hope that a judge will allow them to back out of the settlement or have the release changed.

If the case is settled in a suit and the attorneys can’t come to an agreement, the dispute will be submitted to the judge, who will either order the plaintiff to sign the release as it is, order that it be changed, or cancel the settlement and allow both of you to continue with the lawsuit.

In conclusion, if you have auto insurance, that means that most of the time there’s no need to worry. Cases, where the insurance policy doesn’t cover everything, are very rare and once the other party accepts payment from your insurance company, they also sign a release that prevents them from filing any further claims.

Involved in a car accident and seeking legal help? Palm Legal Group has an experienced team of skilled lawyers that can get you the best possible settlement for your case.

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