What Are Insurance Companies Obligated To Do In A Personal Injury Claim?

Anyone involved in a Mankato personal injury claim will likely be dealing with insurance companies at some point. For example, the typical car accident case involves the exchange of insurance information between the drivers, regardless of which party is at fault for the incident. These claims will then usually be resolved in some way between the claimant and the insurance adjuster of the at-fault party’s insurer. Insurance companies, however, can be notoriously difficult to deal with, and it is important to understand exactly what they are responsible for.

Insurance companies owe a duty to their clients

Insurance companies have a set of responsibilities that they must abide by. Policyholders should be able to count on the support of their insurance companies during times of need to follow through on the promises outlined in the policy. Insurance companies have an obligation to act with good faith when a person files a claim under their own insurance policy. If a person faces a claim from a third-party, their insurer is required to appropriately defend them.

However, if you make a claim against another party’s insurance carrier due to an injury you have incurred, their insurance carrier owes you no obligation. The other party’s insurance carrier’s obligation is to their policyholder, and you can guarantee they will do what they can to limit the amount of money they pay you in a settlement.

What happens if the claim goes to court?

Insurance companies have a duty to defend their client when a third party files a personal injury lawsuit. Why would a third party file a lawsuit?

This may happen if the insurance carrier denied a claim made against their client or refused to offer a settlement that the other party deemed appropriate. If a case goes to court, the insurance must hire a lawyer at its own expense to represent its policyholder. They must provide a meaningful defense and pay for all of the litigation costs associated with the case.

This duty is broad and extends to all claims that are covered under the policy. The courts have long held that a meaningful defense includes all claims and does not allow insurance carriers to parse claims.

If an insurance company fails to properly defense its policyholder, whether during the initial claims process or during the court process, they could be found to be acting in bad faith. This behavior could result in severe penalties for the insurance company, and they could face a lawsuit of their own from the policyholder.

What if there is no insurance for the at-fault party?

If you are injured due to the negligence of another person, but the other party does not have insurance (or the other party is not caught after causing the injury), then you may have to turn to your own insurer to cover the costs of your damages. In these cases, the insurance company is required to fulfill their obligations according to the insurance policy. For example, if you are struck by an uninsured driver, you could turn to your own uninsured motorist coverage to get compensation for your damages. If you have this coverage, your insurer is required to provide coverage for your damages up to the limits of the coverage agreed upon in the policy.