If I was recently involve in a car accident, what is my financial responsibility?

My insurance paid the other party with prorated amount of $990 but the damage was $3808. Now the other party hired a lawyer and was asking me to pay the rest but I don’t have the money to pay it. Am I required to pay for the rest?

Asked on August 14, 2014 under Accident Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

If you were at fault in causing the accident (for example, you were driving negligently, or carelessly) then you are potentially liable for all costs or losses of the other party which are not otherwise paid for them, such as by insurance. However, your insurer should not have settled the amount without getting a settlement agreement or release which stops the other party from suing you--that is, the other party should have taken that settlement as payment in full. Ask you insurer if there is a release or settlement agreement; if there is, it can be enforced. If not, ask your insurer why they did not get one and what they plan to do if you are sued--it may that you may have a claim or cause of action against your insurer, for breach of contract or professional negligence, for giving the other party money without making sure you were protected from a lawsuit.

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