January 8, 2010

Does Having Auto Insurance Protect Me From Lawsuits

Having the right auto insurance can protect you from lawsuits. As a matter of fact, this is one of the major reasons for purchasing an insurance policy. We live in a litigious society where people sue each other without hesitation for the smallest things – and a motor vehicle accident is by no means a small thing. When you purchase auto insurance coverage through a carrier, they assume the role of protecting you in an accident. This means that if the other driver hires an attorney to sue you for injuries and vehicle damage, your insurance carrier will step up to the plate and defend those auto insurance claims that arise against you.

This means that your carrier will gather claim documents, investigate the circumstances of the claim and make a decision regarding your liability in the matter. If your insurance company determines that payment should be made to the claimant, it will negotiate a figure with the claimant’s attorney that will settle the matter. This is essentially the means by which insurance prevents you from being sued in court. However, people should understand that such protection against lawsuits is not bulletproof. You can still be sued following a motor vehicle accident, as you can be sued for almost any act of negligence today. If the other driver demands more money to settle the matter than the limits of your policy coverage, your personal assets can be the targets of the lawsuit. Drivers should be aware that at such a juncture, their insurance carrier might place them on notice that they have the right to retain counsel on their own.

This is why some insurance experts advise people to obtain the most insurance coverage they can afford. A high level of coverage can prevent the catastrophic lawsuit that results in the targeting of a defendant’s personal assets such as a home, car, investments and bank accounts. The more assets a person owns, the more the reason to purchase higher limits of insurance. Maintaining adequate policy limits is one means of avoid being sued. Another means to prevent being sued is to comply with the conditions of your policy. This means using the car for the purpose for which you told your insurance carrier you would be using it. If you stray from these conditions, you may open the door to being sued (despite the existence of coverage on your part).

Perhaps the most important thing to remember is there is no such thing as a silver bullet’to protect you from auto-related lawsuits. However, policyholders can enjoy peace of mind knowing that driving prudently, maintaining adequate coverage limits and following the conditions of their policy helps them avoid it.