Sorting Out Insurance Coverage: Whose Company Pays After an Accident?
When you are involved in an automobile accident, one of the main issues, besides determining whether or not any injuries were sustained, is to exchange insurance information and submit your claim so that the proper insurance company will pay for the damages.
No matter what the circumstances of your accident were and who may have been at fault, you should always inform your insurance company about the collision. This will make it easier to work through disputes regarding damages that often occur during a personal injury claim.
So who pays what?
The Other Driver’s Insurance Provider
If the other driver is considered to be at fault for the car accident, their company will conduct an investigation to ensure that they were indeed liable. After confirming liability, they will send an adjuster to inspect your car and estimate the damage, or ask you to get an estimate from the repair shop, and will typically pay not only for the repairs but also for a rental car until your car is ready.
If the accident wasn’t your fault, you can bring a lawsuit against the responsible party to recover accident-related past and future medical expenses as well as lost wages for pain and suffering, but the other driver’s insurance will only pay up to the limits of the driver’s liability coverage — and only after the matter is resolved, which can take several years, either through settlement or a trial. If you do recover compensation in the lawsuit, your health insurance contract will likely require you to reimburse your carrier for all accident-related medical bills paid on your behalf.
Your Insurance Provider
If you have collision coverage, you can make a claim on your own policy to pay for your car repairs, and you will pay the deductible. If the other driver was at fault, you will begin a process known as subrogation, during which your company will ask the other’s driver’s insurer to reimburse them for your claim.
Once the other party’s insurer confirms that its insured was indeed at fault, it sends payment to your company, which then refunds the deductible back to you. Subrogation also applies to injury claims if you have medical payments coverage and will pay for accident-related medical bills, up to the limits of your coverage, and no deductible applies.
If you were hit by someone without insurance or with low limits of coverage that aren’t sufficient to pay for all your damages, the uninsured (UM) or underinsured (UIM) coverage on your own policy will pay for injuries to you and your passengers, and sometimes even damage to your vehicle if you are involved in a hit and run or an accident caused by an uninsured driver. But you need to check your policy and make sure you chose to carry this coverage, because although insurers in Colorado are required to offer uninsured and underinsured coverage in the same amount as the bodily injury liability limits selected, UM/UIM can be waived, as long as you do so in writing.
Most every state, including Colorado, requires motorists to have automobile insurance, although some drive without it. In the case of an accident, insurance or lack thereof pays a vital role in sorting out the “whose company pays for what” dilemma.
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