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How to Sue an Insurance Company After a Car Accident

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how to sue insurance company after car accident

If you were injured in a crash and the insurer is refusing to pay for your losses, understanding more about how to sue an insurance company after a car accident can help ensure you recover fair compensation. Insurance functions as a contract that is meant to provide financial protection to the insured. Normally, victims injured in car accidents do not need to sue the insurance company directly. Instead, they can simply file a claim to recover compensation for the accident. In some case, however, they may need to sue the person that caused the accident who is indemnified, i.e., financially covered, by the insurance company. Due to the hostility insurance companies face in court, cases in which an insurance company is named as a liable party are fiercely defended.

Making a Claim Against the Other Driver’s Insurance

A car accident can cause a victim to suffer severe injuries. A car accident can also create several legal issues. Illinois utilizes a fault-based approach with insurance. The driver that caused the collision is responsible for providing financial compensation to you and any other injured victims. This means that the at fault driver in a rear-end collision, which is typically the driver in the back, would owe damages to the other driver. However, modified comparative negligence plays a role in Illinois car accident claims. If you contributed to causing the accident, you must carry less than 50% of fault to recover damages. Additionally, your award is reduced by your degree of fault. 

The common way car accident victims receive compensation is by filing a claim after a car accident with the at-fault driver’s insurance company. To file a personal injury claim, you need to contact the other driver’s insurance company and inform them of the collision. Prior to contacting the other driver’s insurance company, it is advisable to hire a car accident injury lawyer

Filing a claim with the other driver’s insurance company is known as a third party claim. It is called a third party claim because you, the victim, do not have a contractual relationship with the at-fault driver’s insurance company. 

Illinois requires all automobile driver’s to carry insurance. Drivers must have minimum liability coverage of $25,000 per person and $50,000 per claim. Additionally, Illinois Law requires insurance policies to carry a minimum of $20,000 worth of coverage for property damage claims. Liability coverage is meant to satisfy any personal injury and property damage claims arising from a car accident in which the policyholder is at fault. 

If the at-fault driver was driving a company vehicle, additional insurance coverage may be available from his or her employer’s insurance company.

What Is Uninsured/Underinsured Motorist Coverage?

In addition to liability coverage, Illinois also requires drivers to carry uninsured motorist bodily injury coverage. UM coverage pays for your injuries, up to your policy limits, if you were struck by a hit-and-run driver or a driver who didn’t have liability insurance. Additionally, uninsured motorist coverage provides protection if you are a pedestrian who was struck by an uninsured vehicle or a driver who leaves the scene of the accident. In Illinois, it is common for impaired or drowsy drivers responsible for fatal crashes to flee the scene to avoid liability and/or criminal charges.

Underinsured motorist coverage is designed to protect you if the driver that struck you lacks sufficient insurance coverage to compensate you for your injuries. UIM will pay the difference between the at-fault driver’s liability limits and your uninsured motorist coverage limits.

The minimum limits for UM coverage are currently $25,000 per person and $50,000 per accident. Higher coverages are available for an additional premium. However, if you purchase a policy with higher UM limits, you must also purchase underinsured motorist bodily injury coverage. 

Making a Claim Against Your Own Uninsured/Underinsured Motorist Insurance After a Car Accident

Uninsured and underinsured motorist claims are first party claims because the victim pursing the claim has a contractual relationship with the insurance company. In uninsured and underinsured motorist claims, the policy usually requires you to provide your insurance company with written notice of the accident.  You will need to include:

  • The insured’s name
  • The name and address of all individuals involved
  • The time and location of the accident
  • The name and address of any individual that witnessed the collision

Illinois is not a no-fault state for car accidents. Instead, it uses a fault-based (tort) system in which modified comparative negligence laws apply. If you were injured in an automobile collision that was not your fault in Illinois, you cannot automatically make a claim against or sue your insurance company. You must make a claim with the at-fault driver’s insurance company. The other driver’s insurance company must then defend the at-fault driver, and settle the claim or pay the judgment. However, if you were injured in a hit-and-run accident, the at-fault driver lacked insurance coverage, or the driver did not have adequate liability coverage to pay for your injuries, you can make an uninsured or underinsured motorist claim against your own insurance policy. 

How Uninsured Motorist Claims Work

To make an uninsured motorist claim with your insurance company, you must establish that the at-fault driver lacked insurance at the time of the collision, or that you are unable to identify him or her. Your insurance company will investigate this aspect of your claim. If your insurance company learns that the at-fault driver was insured, they will deny your claim and instead direct you to make a claim with the at-fault driver’s insurance company. When you make an uninsured motorist claim, your insurance company will step into the shoes of the uninsured driver that struck you. They will pay damages on behalf of the uninsured motorist that caused the collision and your injuries.

How Underinsured Motorist Claims Work

Similarly, if you were struck by a motorist that had valid insurance at the time of the collision, you cannot automatically make a claim with or sue your insurance company. You can only make an underinsured motorist claim if the at-fault driver’s insurance policy lacks sufficient insurance coverage to compensate you for your injuries.

For example, if the at-fault driver that struck you only had an insurance policy with minimal limits of $25,000 per person and $50,000, and your medical bills total $5,000, there is sufficient insurance coverage from the other driver’s policy to compensate you for your injuries. However, if the at-fault driver that struck you had an insurance policy with minimal limits of $25,000 per person and $50,000 per claim, and your medical bills total $30,000, you will have to make an underinsured motorist claim with your insurance company. If your insurer refuses to pay the claim, you may have to sue your own insurance company to recover compensation. In effect, your own insurance company will stand in to provide additional insurance coverage for the other driver and fill the coverage gap between the at-fault driver’s insurance policy and the total amount of your medical bills.

However, if your underinsured motorist coverage has identical coverage limits to the at-fault driver’s, you cannot make an underinsured motorist claim. For example, if the at-fault driver had a policy with limits of $25,000 per person and $50,000 per claim, and your underinsured motorist coverage has limits of $25,000 per person and $50,000 per claim, you cannot make an underinsured motorist claim. 

The purpose of the uninsured/underinsured motorist statute is to place injured victims in the same place they would have been if the at-fault driver had insurance or sufficient insurance to compensate a victim for his or her injuries. If your policy limit matches the at-fault driver’s policy limit, you are in the same financial position, and therefore not entitled to underinsured motorist coverage. Similar to uninsured motorist claims, to make an underinsured motorist claim, you must report the collision to your insurance company as soon as you realize that the other driver lacks sufficient insurance coverage to compensate you for your injuries.

Building an Uninsured/Underinsured Motorist Case

To successfully sue an insurance company, you must establish that the driver of the vehicle that struck you caused the collision and your injuries. You must prove all the elements of a negligence claim by preponderance of the evidence, i.e. 51%. In uninsured and underinsured motorist lawsuits, the insurance company is entitled to raise all the legal defenses that are available to the at-fault driver.  

Defenses Against Your Car Accident Claim

Illinois utilizes the doctrine of modified comparative negligence. Under this doctrine, you can still recover as long as you were less than 50% at fault. However, any judgment you obtain in court is reduced in proportion to your level of fault. For example, if you are awarded $10,000, but were found to be 30% at fault, your award is reduced to $7,000. Accordingly, if you file an uninsured or underinsured motorist lawsuit against your insurance company, they can raise this defense. Along with this, your insurance company may deny your claim on the basis that no collision occurred or that you suffered no injuries or damages.

When faced with these defenses, you may be wondering what to do to protect your case. First and foremost, you should obtain evidence that the collision occurred. Specifically, you should photograph your vehicle to document the collision and the property damage. Property damage photos can serve as powerful evidence that you and your vehicle were involved in a collision. 

Additionally, you should contact the police following the collision, and obtain a copy of the police report. Police reports are useful as they provide additional evidence to support your claim. Your insurance company is more likely to believe that a collision occurred if you contacted the police and documented the collision. 

Finally, you should obtain the names and contact information of any witnesses. Independent witnesses can help you establish that a collision occurred. Independent witnesses can also help you establish an uninsured motorist claim if they can provide testimony demonstrating that the at-fault vehicle fled the scene. 

Evidence, such as property damage photos and independent witness testimony, can assist your Chicago Car Accident Lawyer in overcoming or defeating a possible comparative negligence defense.

When You Should Sue an Insurance Company After a Car Accident

You should file a lawsuit if your insurance company outright refuses to settle your claim. Accordingly, if your insurance company is refusing to settle your case in a timely manner, you must file a lawsuit prior to expiration of the statute of limitations. If your insurance company takes the position that your claim is barred because you are more than 50% at fault or that you were not injured, you must file a lawsuit. An attorney will know how to prove you are not at fault for a car accident. Insurance companies want to settle claims early and for minimal value. As such, if your insurance company refuses to make a fair settlement offer, you should file a lawsuit. If your insurance company debates whether your injuries were from the accident, such as pre-existing injuries aggravated by a car accident, you may need to file a lawsuit.

Illinois imposes time limits on how long a car accident victim has to file a lawsuit for personal injury. This is known as a statute of limitations. Specifically, Illinois imposes a two-year statute of limitation on personal injury claims, including those for underinsured and uninsured motorist claims, and a five-year statute of limitations for property damage claims. The statute of limitations begins on the day the collision occurred.

Financial Compensation From Suing Your Insurance Company

Illinois law allows you to claim both economic and non-economic damages in a car accident claim. Economic damages are those that can be numerically quantified. You can claim economic damages for the cost of past and future medical treatment, medications, and past and future lost wages. These damages are easier to prove, as they typically coordinate with a documented paper trail.

Non-economic damages are those that do not have a particular numerical value. You can claim non-economic damages for the pain and suffering caused by the collision, along with the mental trauma you endured. Additionally, you can also claim non-economic damages if you were disfigured due to the collision. A car accident lawyer can help you calculate the damages available in your car accident claim. If the insurance company refuses to pay a reasonable settlement, your attorney can represent you in court.

About the Author

Kurt D. Lloyd is a plaintiff’s trial lawyer who focuses on medical malpractice and other catastrophic injury cases. He lives in Chicago and represents injured clients throughout Illinois. He is also the founder of Lloyd Law Group, Ltd.

Chicago accident lawyer Kurt D. Lloyd