If you caused a wreck, you have rights too
By law, a person injured by someone else must sue the at-fault driver, rather than the at-fault driver’s insurance company. (This is a law we believe needs change in our state — read more here)
At-fault drivers have rights and responsibilities too. Most insurance policies have a “cooperation clause,” which means that the at-fault person must report a lawsuit to their insurance company and otherwise cooperate in the defense of the case. The best way to do this is call your agent, but you can also call the injured party’s attorney on the bottom of the paperwork you received and request the name and number of the insurance adjuster assigned to your case.
The “cooperation clause” means you cannot do anything to jeopardize the carrier’s rights. For example, in exchange for your premium dollars, auto insurance carriers typically have a policy provision that goes something like this:
“We (the carrier) will settle or defend, as we consider appropriate, any claim or suit asking for damages for bodily injury or property damage. We will use attorneys of our choice. In addition to our limit of liability, we will pay all defense costs we incur. Our duty to settle or defend ends when our limit of liability for this coverage has been exhausted. We have no duty to defend any suit or settle any claim for bodily injury or property damage not covered under this policy.”
These types of policy provisions give the carrier the exclusive right to settle any claims made against you.
Unfortunately, many insurance companies use a “delay, deny, defend” strategy in automobile and other cases. That is, insurance companies now use aggressive litigation to deny claims and boost profits, since many people either give up or take settlements for less than fair value, rather than going to court. The problem with this approach is that it drags the at-fault driver through the litigation process. This is difficult on the at-fault driver for several reasons:
The at-fault driver may get sued, which gets reported to credit reporting agencies and is a negative factor when the at-fault driver tries to obtain loans for home, auto, or other major purchases.
If the at-fault driver gets sued, then the lawsuit becomes a public record, and the lawsuit may harm the at-fault driver’s reputation in the community.
A lawsuit may require the personal involvement of the at-fault driver at depositions, hearings, and trial, which takes time away from work and family.
The litigation process is stressful for all litigants.
If the at-fault driver loses the lawsuit, the at-fault driver’s personal assets may be at risk.
If the at-fault driver loses the lawsuit, the at-fault driver may lose his or her driving privileges.
Because the carrier has the exclusive right to settle or defend claims made against you as noted above, an insurance carrier is supposed to give at least as much consideration to the interests of the insured as to its own interests according to Arkansas law. In most cases, the at-fault driver wants the insurance company to pay the claim against her as quickly as possible with little or no involvement in the case.
So what can an at-fault driver do? Here are some suggestions:
Demand in writing that the insurance company settle the case within your policy limits. In your demand, be sure to tell the insurance company you have much more to lose than they have to gain by not settling the lawsuit against you, and explain why.
Ask the insurance company to reimburse you for time away from work.
Ask the lawyer appointed by your insurance company to advise you of the risks of litigation so that you can give informed consent to the insurance company’s actions.
Insurance defense attorneys have to frequently write reports and make recommendations to insurers. Demand in writing to be copied on any communications from the insurance defense attorney and your insurance company.
Insurance companies frequently insist their evaluation of the injured party’s claim is below the amount in which the injured party has offered to settle. In this event, demand in writing for your insurance company provide you with a warranty to pay any judgment above your applicable liability insurance policy limits so your assets are protected.
Some insurance companies threaten to deny coverage if at-fault drivers give truthful statements that hurt the defense. This is illegal — tell the insurance company you will tell the whole truth and nothing but the truth.
Report insurance companies to the Arkansas Insurance Department when they drag you into a lawsuit, and tell them you want your case settled quickly without your personal involvement.
Ask your state senators and state representatives to change the law to allow direct actions against insurance companies.
Tell your state senators and state representatives that you oppose tort reform, which makes it easier for the insurance companies to deny claims and drag you through a lawsuit.
Consult your own personal attorney to advise you of your legal rights.
At the Chaney Law Firm, we would much prefer to sue insurance companies, rather than individuals. However, the law in Arkansas doesn’t let us do that in most situations. If you know your rights and responsibilities, you can protect yourself. The more people who stand up to the insurance companies, the better off all of us will be.
