If I made a settlement with the other person involved in a car accident and she signed the settlement payment, can her insurance company sue me for their loss?

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If I made a settlement with the other person involved in a car accident and she signed the settlement payment, can her insurance company sue me for their loss?

The settlement was made between the 2 person involved in the car accident. On the signed contract I did not specify that her insurance company cannot come after me.

Asked on December 3, 2011 under Accident Law, California

Answers:

L.P., Member, Pennsylvania and New Jersey Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Thank you for submitting your question regarding settlements between drivers that were involved in a car accident.  It is not a simple yes or no as to whether the other driver’s insurance company can come after you for repairs to the vehicle.  A driver always has the right to go through their own insurance company, or the at-fault driver’s insurance company, to get their vehicle repaired and get treated for medical injuries, if necessary.  There are a lot of people that agree to work out any vehicle repairs between themselves without involving the insurance companies, but then after they leave the scene of the accident they fear that the other driver won’t hold up their end of the bargain and out of an extra abundance of caution, they contact the insurance company to file a claim.  They fear that if the other driver does not pay, they will not be able to have their insurance company cover the damages if they wait to long to file a claim. 

However, in a situation where a written contract exists that you will pay for the damages to someone else’s vehicle, and you follow through with your agreement and pay for the damages, then the other driver would be committing insurance fraud if they had both you and their insurance company compensate them for damages.  For instance, if the other driver has $2,000.00 worth of damages, and you pay them the full amount of $2,000.00, then the insurance company should not also be paying them $2,000.00.  Even though the other driver has damages to their vehicle, it does not entitle them to double recovery for those damages. 

If you do pay any out-of-pocket, be sure to have written documentation for anything you pay so that you can let the insurance company know if they should contact you, or for you to utilize in small claims court if the other driver should attempt to collect double recovery.

 


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