Can an insurance company refuse payment on a claim if their insured as not yet contacted them regarding the accident?

I was parked in my car in a legal parking space when someone who was making an illegal turn after discovering that he was on a 1 way street going the wrong way hit me from behind. His insurance company is claiming that they cannot pay the damages until they hear from him. So far he has not called or contacted them. His insurance is obviously active and up to date. Can they legally refuse to pay the damages because they have not heard from him?

Asked on June 9, 2017 under Accident Law, Oregon


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Of course they can. They are *his* insurer, not yours: their obligation under their policy (which is a contract between them and him) is to defend him in court and/or pay any court judgments against him. They have no duty directly to you. You have not sued yet: there is therefore no judgment. Any payment by them would be voluntary on their part: an insurer will often voluntarily offer payment if they believe that if the other party were to sue their insured, their insured would lose--if they'll end up paying anyway, may as well pay now, before having to pay for litigation. But without hearing from their insured, they have only your version of events, and you could be lying, exagerating or wrong. And even if they heard from him, and even with a police report in your favor, they could *still* refuse to pay if they feel that you unlikely to sue, or that if you did, that they had a reasonable chance of winning--all payments, unless you sue and win at trial, are voluntary, so they could choose to not pay even if refusing to pay is, frankly, stupid.
Your recourse to move matters along would be to sue the at-fault driver: prove in court that he was at fault and he and/or his insurer will have to pay.

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