What can an insurance company do to get their money back from an auto accident?

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What can an insurance company do to get their money back from an auto accident?

My 17 year old daughter caused an accident and we did not have liability insurance (by error). The insurance company said my husband and my daughter, now 18, has to pay $25,800. It also said if they do not it will suspend their licenses. I just want to know does this all sound right? My husband is working on an agreement for $166 a month but my daughter can not afford to pay much if anything.

Asked on March 4, 2012 under Insurance Law, Florida

Answers:

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

Answered 9 years ago | Contributor

The amount the insurance company is claiming that your daughter and husband owe from the accident may include both property damage to the other vehicle and the personal injury claims of the occupants.  The personal injury claim(s) would include the medical bills, pain and suffering which is an amount in addition to the medical bills and wage loss.

The insurance company could file a lawsuit for negligence against both your husband and daughter.  If the insurance company obtains a judgment, it could enforce the  judgment by a wage garnishment, placing a lien on your property, etc.  If your husband and daughter are unable to pay the amount of the judgment, they might want to consider filing bankruptcy.  You should also be included in the bankruptcy.  As for having their drivers's licenses suspended, that can occur for not having insurance.

As for filing bankruptcy, Chapter 7 is straight liquidation which eliminates debts.  Income and other factors determine whether or not one is eligible to file Chapter 7.  If ineligible for Chapter 7, a Chapter 13 bankruptcy could be filed; however, Chapter 13 requires a plan (budget) for repayment of creditors.  It would be premature to file bankruptcy until there is a court judgment against your husband and daughter.


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