Can my auto insurance company sue me?
Car insurance companies usually will not sue their own customers, but there are some exceptions. Read on to find out when you might be at risk of getting sued by an insurance company.
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Daniel Walker
Licensed Auto Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Auto Insurance Agent
UPDATED: Nov 27, 2023
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Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Nov 27, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Your car insurance company is unlikely to sue you for getting into an accident and filing a claim
- If you commit auto insurance fraud, your insurance company can take you to court
- If you have an accident, the other driver’s insurance company can sue you to recover the damage
Many people fear being sued, and rightly so, as being involved in a lawsuit is an expensive and time-consuming process. If you’ve been involved in an accident, you may even worry that your auto insurance company might sue you. It can cause you to wonder “can my insurance company sue me?” Could you face a lawsuit with another driver’s insurance company? Read on to find out.
Can my auto insurance company sue me?
Your car insurance company is highly unlikely to sue you for being involved in an accident. You are their customer, and it is their job to work with you and not work against you. They must compensate for the damages up to the limits stated in your insurance policy.
What if the accident is your fault? Can you claim auto insurance if it’s your fault? It is the insurance company’s job to cover you even if you are at fault.
Your auto insurance company will not sue you simply because you got into an accident. This doesn’t mean you have free rein. You can find yourself in a lawsuit for breach of contract or a bad-faith claim.
Another reason your auto insurance company will not sue its customers is that they are in business to make money. Suing their customers will cost them a lot of time and money and will give them a poor reputation. Therefore, suing their clients isn’t in an auto insurance company’s best interest.
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Can another car insurance company sue me?
Yes, the other driver’s insurance company can sue you. But this isn’t as simple as it sounds. The chances of you being sued by the other driver’s insurance company will depend on the state you live in and the car insurance requirements in your state. If you live in a no-fault state, you probably do not have to worry about getting sued by the other motorist’s insurance company. But If you live in an at-fault state, the other driver’s insurer can sue you.
Receiving any communication about lawsuits can be scary. If you find yourself being sued by a car insurance company, you should take the following steps.
- Contact your insurance company as soon as you receive a subpoena or a complaint, as this is a time-sensitive process
- The insurance company will provide a lawyer for you. Your insurance company is required by the terms of the policy to provide an attorney.
- Your attorney will file an appearance on your behalf
- All the further communication will go through your lawyer
- You will have to pay for the damages that occurred to the other vehicle if you lose the lawsuit and the damages sustained are beyond your coverage limit.
If you live in an at-fault state, how do you protect yourself from being sued? You will need liability insurance to protect yourself. In case you are involved in an accident and have liability insurance, your auto insurance company will pay up to the limit of your policy. Your auto insurance pays up to the limits of bodily injury to settle lawsuits if you are sued. If the damages suffered by the other driver are more than your liability coverage, you will have to pay the difference out of pocket.
Can my auto insurance company sue me for fraud?
Yes, you can. While insurance companies are liable to pay for the damage that occurs to your vehicle when you have an accident, they aren’t in the business of getting duped.
To detect insurance fraud auto companies keep a close eye on suspicious behavior such as:
- Your claim history. Insurance companies keep a record of all the claims made by you. If you have a history of making frequent claims or if you make a very large claim when you have no history of previous claims, such behavior might make your insurer suspicious. Check your insurance claims history to see what they are looking at.
- Financial problems. If your claim coincides with financial issues, this will make your insurer suspicious as you have a motive and a need for money.
- Adding more coverage just before a loss. Should you have an accident just days after doubling your coverage, this could be a red flag that might make your insurer suspicious of fraud.
These behaviors don’t prove that your claim is fraudulent. However, it might make the insurance company wary of potential fraud, and they might ask you for additional explanations to prove your case.
Final Thoughts on Being Sued by an Auto Insurance Company
Your chances of getting sued by your auto insurance company are relatively low. In case you are involved in an accident, the other driver’s insurance company may sue you, but your insurance company will be there to help you. Your insurer is unlikely to sue you as long as you don’t commit fraud.
Frequently Asked Questions
Can my auto insurance company sue me for fraud?
Yes, if you commit insurance fraud, your auto insurance company can take legal action against you. Insurance companies monitor suspicious behavior such as frequent or large claims without a history, claims coinciding with financial problems, or adding coverage just before a loss. While these behaviors don’t prove fraud, they may lead to additional scrutiny and explanations to prove your case.
Can my auto insurance rates increase if I am not at fault in an accident?
In most cases, your rates should not increase if you are not at fault in an accident. However, it’s always a good idea to check with your insurance company to understand their specific policies regarding accidents and rate changes.
What is an insurance deductible?
An insurance deductible is the amount you are responsible for paying out of pocket before your insurance coverage kicks in. For example, if you have a $500 deductible and file a claim for $1,000 in damages, you would pay the $500 deductible, and your insurance company would cover the remaining $500.
Can I add someone to my auto insurance policy who doesn’t live with me?
It depends on your insurance company’s policies. Some insurance companies allow you to add drivers who don’t live with you to your policy, while others may have restrictions or require certain qualifications. Contact your insurance company to inquire about adding a driver who doesn’t reside with you.
Can I switch auto insurance companies if I have an open claim?
Yes, you can switch auto insurance companies even if you have an open claim. However, it’s important to consider the potential impact on your claim and any applicable deductibles or waiting periods with the new insurance company. Discuss your situation with both your current and prospective insurance companies before making a decision.
What is the difference between liability insurance and full coverage?
Liability insurance covers damage or injuries you cause to others in an accident, while full coverage typically refers to a combination of liability insurance, collision coverage, and comprehensive coverage. Full coverage provides broader protection for your own vehicle in addition to liability coverage.
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Enter your ZIP code below to view companies that have cheap auto insurance rates.
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Daniel Walker
Licensed Auto Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Auto Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.