I just caused an accident…
Since 2014, there have been over 6 million auto accidents every year in the United States. On average, every American is involved in an accident every 18 years and four times throughout their life. Using these stats, you have a one in four (25%) chance of causing an at-fault accident in your lifetime. Auto accidents continue to take place even as vehicle technology and safety features have increased. And even the most careful person can cause an accident on a bad day. Everyone has had near-miss accidents where a split-second reaction prevents an accident. The day you didn’t sleep well or the sun hits your eyes at the exact wrong second causing a delayed reaction.
After being in an accident, the most important thing to do is move your car to a safe location. If your car isn’t drivable, contact 911 so local police can assist with blocking lanes. They will also arrange a tow truck to come to the scene to move your car. Once the logistics are set, the next step is exchanging information with the other party. If the police are at the scene and will write a police report, the officer will likely not want you to interact with the other party. You will provide your information directly to the officer for their report.
In most states, you are legally required to exchange driver’s license, vehicle registration, and auto insurance information. Once you get home, file a claim with your insurance carrier. The most important thing when reporting a claim is being honest. Yes, it can be embarrassing to admit you caused an accident but it’s the morally right and legal thing to do. Falsifying facts on an insurance claim can be considered fraud. Insurance fraud can lead to your insurance carrier denying coverage for all damages on the claim, severe fines, and even jail time.
After reporting the claim, your insurance carrier will contact the other party to verify how they want to repair their vehicle and if they were injured. The other party can use their own insurance or go directly through your insurance carrier for vehicle repairs. Bodily injury claims will go through your insurance carrier. Your insurance carrier will protect you based on the liability coverage you purchased. Liability coverage includes property damage and bodily injury coverage.
Property damage covers a prefixed agreed upon amount of property/physical damage. Bodily injury coverage includes two sets of numbers. For example, $50,000/$100,000. The first number means your insurance carrier will cover injuries you caused to one individual for up to $50,000. The second number means your insurance will cover a maximum of $100,000 for all injured parties. Every state (except New Hampshire) requires liability coverage to drive a vehicle. Each state requires their own set amount of minimum liability coverage. For example, the minimum liability coverage in Texas is $25,000 for property damage and $30,000 for bodily injury per person, up to a total of $60,000 per accident. Whereas the minimum amount in California for liability coverage is only $5,000 for property damage and $15,000 for bodily injury per person, and up $30,000 per accident.
So, can I get sued even if I have insurance?
Here are some hypothetical examples:
If you only have $25,000 property damage coverage and struck a new luxury vehicle causing $30,000 in vehicle repairs, tow, and rental costs, the other parties insurance carrier or the other party can sue you for the remaining $5,000 plus associated legal fees. However, most lawsuits associated with car accidents are with bodily injury claims. The other party’s insurance carrier will not assist them on a bodily injury claim. Most parties obtain an attorney if they sustained serious injuries. If their attorney is claiming $50,000 in bodily injuries (pain and suffering, loss of income, and medical expenses) and your insurance carrier offered the maximum on your bodily injury coverage of $25,000, their attorney can legally sue you for the remaining $25,000.
If you own any property, a business, stock investments, valuable belongings, and/or earn enough money for an attorney to seek legal action against you must insure yourself and your belongings by purchasing higher liability limits. The more you own, the more you need to protect yourself. The attorney can run a background check on you, review your financial assets and decide to proceed with suing you if the attorney feels you have enough assets to pay their demand. And even if you don’t have any real assets, your credit score could be severely hit if their attorney persists with seeking reimbursement. Simply put, do not let one mistake ruin your life.