Insurance Laws Concerning Auto Accidents

Many insurance laws concern auto accidents, and each state has slight differences in application of those laws and in policy language. From a general perspective, auto insurance law starts, in large part, with carrying liability coverage, applying the correct law in terms of fault and recovery for damages and understanding the duties and conditions under your insurance policy in case of a lawsuit against you.

Financial Responsibility

Mostly all the states require drivers to carry liability auto insurance, even if it's the minimum state-required liability limits. Liability insurance is protection in case you become at fault for a car accident and insures you for someone else's bodily injuries and vehicle repairs. Each state has its own requirements regarding what and how much insurance coverage a driver must carry.

Comparative Fault

Comparative fault is the percentage of liability assigned to a driver in an auto accident. There are four kinds of fault, depending on the state. Some states allow up to 50 percent negligence and still allow the plaintiff to recover damages, while other states completely bar recovery if the plaintiff is liable for the same percentage. A number of states allow recovery even if you are 99 percent negligent, while on the other hand, a small number of states completely preclude recovery if you are found just 1 percent negligent.

Subrogation

Subrogation allows your insurance company to seek monetary reimbursement for vehicle or injury damages from the at-fault driver of an auto accident. For example, if the person that struck your car caused $5,000 in vehicle damage, your insurance company pays the costs to fix your car less the policy deductible under the collision coverage of your auto policy. Your insurance company then files a subrogation claim against the other driver (or other driver's insurance company) for recovery of the full amount of the vehicle damages including your deductible.

Attorney Representation

One aspect of auto insurance law that many people are not familiar with is that car insurance policies provide legal representation in case you are sued in a court of law for injuries or vehicle damage. If you have a covered loss under your auto policy, your insurance company will provide a lawyer to defend you in the legal action and pay the costs and expenses associated with the litigation, including the payment of a settlement or judgment up to your policy limit of liability coverage.

Duty to Cooperate

While your car insurance policy provides an attorney and pays the legal bills, you as the defendant have the duty to cooperate with your insurance company and the defense attorney throughout the litigation. Under the duties section of the policy, you need to turn over legal papers to your carrier and attend all hearings, as requested by your counsel. Auto insurance law has determined that in certain instances, if you fail to cooperate, insurance coverage for the accident could be jeopardized.

References

• Carinsurance.com: Do All States Require Car Insurance?
• MWL-law.com: Contributory Negligence Comparative Fault Chart
• Insurance.wa.gov: Subrogation and Your Rights
• Asianjournal.com: Your Insurance Company's Duty to Defend You; Conrado Joe Sayas; February 2010
• All-about-car-accidents.com: How Can I Avoid Violating My Insurance Provider's Cooperation Clause?; Christy Rakoczy; December 2010