Paying You the Highest Amount is not Your Insurance Company’s Priority

All states in the U.S. require drivers to carry proof of financial responsibility, that is, a proof that they are capable of compensating anyone they might injure in a motor vehicle accident wherein they are at fault. This financial responsibility may be shown by:

  • Carrying auto liability insurance, which is the requirement in 48 states;
  • Paying the state’s Department of Motor Vehicles (DMV) the required uninsured motor vehicle fee if they decide to register their vehicle as uninsured (paying this fee in lieu of purchasing an automobile liability insurance policy, obtaining a self-insurance certification, depositing money or securities, or securing a surety bond is a practice allowed in the state of Virginia; in the event of an accident, the at-fault driver would be held personally liable in compensating the person that he or she injures); or,
  • Depositing securities or money with the state treasurer or filing an SR-22 (these are alternatives to purchasing an auto insurance policy, a practice allowed in the state of New Hampshire).

The purpose of financial responsibility, or liability coverage, is to compensate an accident victim for the bodily injuries that he or she has been made to suffer and for all other costs or losses resulting from the injuries.

Some of the types of auto insurance coverage include:

  • This pays for injuries to others and damage to their property if were at fault accident.
  • Personal injury protection (PIP), also known as “no-fault.” This type of coverage pays for your and your passengers’ medical bills by your own insurer even if the accident is not your fault, and may also pay for lost wages, funeral expenses and other losses.
  • This will pay if your car was stolen or damaged by something other than an accident.
  • Uninsured and underinsured motorist. This pays for damages resulting from an accident caused by an uninsured, underinsured or hit-and-run driver.

In the 48 states where carrying auto liability insurance is required, the type of insurance coverage that drivers need to carry depends on the “liability” system recognized in the state where they reside. In states where the “fault” system is recognized (also called “at-fault” or “tort liability” system), the tort insurance coverage is what drivers will need to purchase.

Under the “fault” system, accident victims can get compensation from their own insurance provider or from the at-fault driver’s insurance company; the victim may also decide to file a civil lawsuit against the at-fault driver. Compensation to be paid to the victim will cover cost of medical treatment, loss of income, pain and suffering, and damage to property.

In “no-fault” states, accident victims can recover financial losses from their own insurance providers, regardless of whose fault the accident is. Two major advantages this system has over the “fault” system is that, one, the victim will no longer have to file a lawsuit just to seek compensation (from the at-fault driver) and, two, seeking compensation will also no longer be a problem for: victims of hit-and-run; those whose are hit by a driver in a stolen vehicle; or those who are hit by a driver who is either uninsured or underinsured.

The Chicago car accident attorneys at Karlin, Fleisher & Falkenberg, LLC, explains, however, that despite all the payments you made in good faith to your insurance company, it is pretty safe to assume that your insurer—not to mention someone else’s insurer—will try to avoid giving you any more than they absolutely have to pay you. Unfortunately, even getting the bare minimum can be a difficult task for accident victims.

An article in the website of consumeraction says that tt’s not uncommon for policyholders to disagree with an insurer about the value of their damaged or stolen property, whether a claim should be covered or what constitutes a fair settlement amount. One thing to remember during the claims process: Paying you the highest amount possible to settle your claim is not the insurance company’s priority. If your claim is denied and you believe it should be covered, or if you feel the payment you are offered is insufficient, it’s up to you to fight for what you think is fair.

 

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