What happens if my insurance company has gone into liquidation?

I was in a car accident a year go when I hit someone’s car from behind. We exchanged information and drove off, whereby I got reimbursed by my insurance company for repair. I thought that was the end of it. However, I was called by the plaintiff’s insurance company today asking for information about the accident, since the plaintiffs have filed suit against me for personal injury. I did not get served but there is a statute in VA that allows for out-of-state

drivers to be served by sending process to the DMV. Anyway, the plaintiff’s insurance firm said they got a UIM claim as well, and they are evaluating the merits of the claim, because my insurance firm has since gone into receivership, but the insurance website seems to say that all claims will proceed as normal. I want to know what will happen since I don’t know if my

former insurance firm can/will hire a lawyer to defend the suit? What is the role of the plaintiff’s insurance in this case, will they step in to fight the suit? Should I hire a lawyer?

Asked on April 22, 2016 under Accident Law, Virginia

Answers:

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Prior to hiring an attorney, it would be advisable for you to contact your state's Insurance Commissioner.  The Insurance Commissioner's office takes over a case when an insurance company has gone out of business.  Since your insurance company should have provided you with an attorney at no cost to you, if it is unable to do so, the Insurance Commissioner's office may be able to step in and provide an attorney.
As for the role of the plaintiff's insurance company, since the case was not settled, their insured has filed a lawsuit against you.  If the case is an uninsured motorist claim, the plaintiff's insurance company will file a lawsuit against you to recover the amount it paid on the claim.


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