Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager Chris Harrigan

UPDATED: Sep 19, 2020

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Key takeaways...

  • Your auto insurance is a product that offers you protections after you have an at-fault auto accident
  • It’s your Bodily Injury and Property Damage coverage that pays for third-party damages if the law says that you’re liable
  • It’s your duty to let your insurer know if you have a loss so that they can take every step to prevent legal action
  • If the other company does sue you, your policy includes supplemental protection that pays for legal defense
  • Unfortunately, if you hide a claim for too long, the insurer isn’t obligated to defend you in court or pay for awards

The last thing you ever want to do is fight a legal battle. Unfortunately, if you ever have an accident, you could find yourself in just that type of scenario. As nice as a person seems at the scene of an accident, attitudes change after claims are filed and investigations start. As soon as insurers start to talk about settlement offers, things can get everything but friendly.

Read on to learn more about your options if you are sued and make sure to use our free insurance comparison tool above!

If you find yourself on the other end of the lawsuit, it’s important to take the right steps to protect yourself. In fact, taking the right steps right after the accident can make all the difference weeks or months before a lawsuit is ever filed. Fortunately, you also have a reputable insurer to lean on who will help you every step of the way.

Here’s what to expect now:

The Importance of Filing a Claim After an Accident

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If you’re in a collision and property owned by someone else is damaged, you must file a claim. The only time that any policyholder should even contemplate skipping the claims process is when they’re in a single-car accident and they’re on private property that they own when their car is damaged.

In every other scenario, you need to file a claim if not just for your protection. Notifying the insurer that you’ve had any type of loss is part of the rules, even when you’re not claiming against your coverage just yet.

As long as you’ve picked up the phone and informed the agent that you were involved in a collision with a specific driver, you’re complying with the terms of your contract. The insurer can’t deny future claims made against your policy within the statute of limitations as long as you fulfill your duties.

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What happens after you file a claim?

Your insurance company has a robust team of specialists who help run the operations side of the company. The claims specialists record information about a claim, answer claims questions and investigate claims. By filing your claim after a collision, you’ll get help from an adjuster, who handles most aspects of your case.

The adjuster will take statements, review damage estimates, and investigate the loss to determine fault. At the end of the investigation, both your adjuster and the other adjuster have to agree on which driver caused the accident. The adjusters also need to agree on a settlement amount.

If you didn’t involve an insurer, you could easily be blamed for a loss you were only partially at-fault for. Not just that, but you would have to come up with your own means to try and prove the other carrier and driver wrong when they take you to court. The fault allocation makes a major difference in many states and that’s why you need to involve your carrier the most.

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Will your insurer help you if you didn’t file a claim?

If you got into a fender bender down the street from your home and you and your neighbor decide to settle the accident privately, it could turn into a major nightmare. You could agree that you’re the one to blame and accept liability, but that doesn’t mean that things will go smoothly. Most problems arise around estimates.

After weeks of waiting for your neighbor to give you estimates, you finally discover that it’s going to cost nearly twice as much to do the repairs.

You don’t agree with the estimates and want to get an opinion from someone you trust. This is where it gets sticky. Your neighbor says no and decides to involve their insurer. They have proof you admitted fault, so you can’t deny it now.

The claim for third-party or first-party benefits could be denied entirely depending on how long you wait to involve your insurer. If you don’t notify your insurer of the incident within a reasonable amount of time, the claim could be denied.

The problem with insurance contracts is that all carriers have a different definition of the term reasonable.

When it’s only been a couple weeks, it might still be okay. It’s when it’s been months that you’re pressing your luck. By that time, the company doesn’t have to investigate the loss, defend you in court, or pay for settlements. It’s kind of pointless to pay premiums for months or years just to lose the protection you’re paying for because of a small mistake.

Can you be sued after you’ve filed a claim with the insurer?


You must carry protection that pays for damages that you cause in vehicular accidents. This is what the state calls mandatory coverage. It pays for medical bills, funeral expenses, lost wages, and property repairs if you’re liable for the accident. Unfortunately, there are no guarantees that the coverage that you have will be enough.

You have both a per person limit and a per accident limit for injuries. If either of those or your property damage limit is exceeded, your company doesn’t have to pay the rest. They can try to negotiate down the bills, but there’s no obligation to pay over the limits that you’re carrying. This is when there’s a risk of a lawsuit.

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What is Supplemental Payments Coverage?

You pay premiums for your liability coverage. They are based on your history as a driver, the car that you drive, and also on the limits that you have. One part of the policy that’s not usually focused on is the Supplemental Payments Coverage. As part of this protection, the company offers you a legal defense if you’re sued. That’s why insurers have huge legal departments with the best lawyers.

If you do owe the other party money after the claim is settled, you could have your wages garnished. The best way to avoid all of this is to buy higher limits of liability. When you have minimum limits, you have minimal protection. Get instant comparison quotes online and see if you can find a policy with broader coverage for less.

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  1. http://guides.wsj.com/personal-finance/insurance/how-much-car-insurance-do-you-need/
  2. https://www.irmi.com/online/insurance-glossary/terms/s/supplementary-payments.aspx
  3. https://www.claimsjournal.com/news/national/2013/09/05/235755.htm
  4. https://www.rmiia.org/auto/steering_through_your_auto_policy/Filing_an_Auto_Claim.asp
  5. https://www.investopedia.com/terms/c/compulsory-insurance.asp
  6. https://www.investopedia.com/terms/a/aggregate-limit-liability.asp
  7. https://www.thebalance.com/what-are-supplementary-payments-462635
  8. https://www.iiat.org/infocentral/policy-guides/auto-dealers-(iso)/general-liability-coverages/supplementary-payments-and-limits-of-insurance
  9. https://www.propertycasualty360.com/2015/06/12/is-it-covered-the-purpose-of-supplementary-payment