Dealing with Insurance Companies After an Accident - California Law
You should be cautious about giving recorded statements to insurance companies after a California car accident. You are generally required to cooperate with your own insurance company under your policy terms, which may include providing a statement. However, you are under no legal obligation to provide a recorded statement to the other driver's insurance company.
Insurance adjusters are trained to ask questions designed to minimize payouts. Common tactics include asking leading questions that imply fault and getting you to admit you feel fine before injuries are apparent. If you must give a statement, consult an attorney first, stick to basic facts without speculation, don't estimate speeds or distances, avoid saying you're uninjured, and request a copy of the recording.
California requires minimum liability insurance of 15/30/5 ($15,000 per person/$30,000 per accident for bodily injury/$5,000 for property damage). However, these minimums are often insufficient. Important optional coverages include:
Higher liability limits are strongly recommended. Consider 100/300/100 coverage or higher given California's high costs.
Dealing with insurance claims adjusters requires understanding that their goal is to minimize the company's payout. When communicating with adjusters:
If the other driver's adjuster calls, you're not required to speak with them. You can direct them to your attorney or state that you're not ready to discuss the claim. Never feel pressured into quick decisions.
If an insurance company denies your California car accident claim, you have several options to challenge the decision. First, request a written explanation of the denial including specific policy provisions cited. Review your policy carefully and compare terms to the denial reason.
Gather additional evidence addressing the denial reason. Write a formal appeal letter responding to each point with documentation. If dealing with your own insurer and the denial seems wrongful, file a complaint with the California Department of Insurance. Consider consulting an attorney for significant claims. If your own insurer acted in bad faith through unreasonable delays or denial without proper investigation, you may have grounds for a bad faith lawsuit.
California law imposes strict timelines on insurance companies for handling claims:
These timelines apply to your own insurance company. The other driver's insurer isn't bound by the same requirements for third-party claims. If your own insurer violates these timelines without justification, it may constitute unfair claims practices subject to regulatory action and potentially bad faith liability.
Insurance bad faith occurs when your own insurance company unreasonably denies, delays, or underpays a valid claim. Common bad faith practices include:
If you believe your insurer acted in bad faith, document all interactions, file a complaint with the California Department of Insurance, and consult a bad faith attorney. Remedies can include the original claim amount, consequential damages, emotional distress, and potentially punitive damages.
Whether to file with your own insurance (first-party claim) or the other driver's (third-party claim) depends on several factors. Filing with your own insurance is often faster, useful when the other driver is uninsured, and your insurer can pursue subrogation to recover costs including your deductible.
Filing with the other driver's insurance means no deductible upfront and potentially recovering damages your own policy doesn't cover like diminished value, but is often slower since you have less leverage. You can file with both insurers simultaneously. For example, use collision coverage for quick repairs while pursuing a third-party claim for injuries. Your insurer will seek reimbursement through subrogation.
Subrogation is the process by which your insurance company, after paying your claim, seeks reimbursement from the at-fault driver or their insurance. When you file a claim with your own collision or medical payments coverage, your insurer pays you and then pursues the at-fault party.
If subrogation is successful, you should receive your deductible back. For example, if you have a $500 deductible and your insurer pays $5,000 for repairs, they'll seek $5,500 from the at-fault driver's insurer. If they recover the full amount, you get your $500 back. Your policy likely requires you to cooperate with subrogation efforts. If you pursue your own claim, coordinate with your insurer to avoid duplicate recovery.
Medical Payments coverage (MedPay) is optional no-fault coverage that pays for medical expenses for you and your passengers regardless of who caused the accident. In California, MedPay provides:
MedPay fills gaps while liability is disputed, pays co-pays and deductibles your health insurance doesn't cover, and usually won't increase premiums when used after a not-at-fault accident. Review your policy for limits and subrogation provisions.
Whether your California car insurance rates increase after an accident claim depends on several factors. If you were at fault, expect increases typically ranging from 20% to 50% or more depending on severity. If you weren't at fault, California law prohibits insurers from increasing rates solely because you were in a not-at-fault accident.
Filing under your own collision coverage when you weren't at fault should not increase rates. Comprehensive claims for theft, vandalism, or weather typically don't affect rates. Factors affecting increases include your driving history, severity of accident, and your insurer's policies. Some insurers offer accident forgiveness programs that prevent first-accident rate increases.
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