I was at fault in a car accident and the injury claim exceeded my policy amount. Can my insurance carrier ask me to help pay for a settlement?

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I was at fault in a car accident and the injury claim exceeded my policy amount. Can my insurance carrier ask me to help pay for a settlement?

I am at fault in an auto accident. The injury claims exceed my auto policy. My carrier wants to know if I am willing to “contribute” to any settlement in their policy limits notification. Though I want to settle, I can afford only up to X amount. If the other driver submits a demand letter for an amount in excess of my policy limits, will the insurance adjuster negotiate a sum that includes a contribution from me? Or will the adjuster involve me in a negotiation before filing a lawsuit? After a lawsuit is filed and it is learned the amount of damages claimed far exceeds my policy limits, at what point in the lawsuit proceedings should I communicate that a bankruptcy filing is likely? Could I use bankruptcy filing as a negotiation tactic?

Asked on April 12, 2009 under Accident Law, Colorado

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Oh boy. Okay, first and foremost, did your insurance company hire an attorney? If so, generally speaking such attorney is representing your interests and cannot involve bad faith by the insurance company.  First and foremost, do an assessment.  They cannot require you to sign the contribution letter.  In terms of the claims and damages, they may wind up settling for your coverage amount. 

I think at this point, telling your insurance company or anyone anything about bankruptcy filings is not a good idea.  You need to (if you are not legally represented) hire or at least talk with a personal injury attorney who can help you decide next steps.  Try the Colorado Bar, www.attorneypages.com, county bar associations.  Again, check with your insurance carrier -- does your policy require the company to hire an attorney to represent you?


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