How do car insurance payouts work?

Question

Curious as to how this all works.  If I get into an accident for which someone else is at fault, I understand that insurance companies make an initial offer, and if I accept it, I sign a release, and that means I can't sue the insurance company or other driver for more.
   
So my first question is this:  How soon does the insurance company make the initial offer?  Do they wait to see if medical bills accumulate?  Or do they estimate it quickly based on initial medical bills?   But what if the damages exceed the other driver's coverage?  I imagine the insurance company will offer the full extent of the other driver's coverage, but do I have to sign a release saying that I will not sue the other driver for more?  Or does it just mean I can't sue the insurance company, but I can sue the other driver for the amount that the insurance company did not cover?   What about uninsured motorist coverage?  I have $25k of that.  Do I have to exhaust that before suing the other driver?   I imagine some of my answers will depend on the extent of injuries.  So assume the following:  No overnight hospitalization, no broken bones, no permanent disability as a result of the crash, and no surgery, but I did go to the ER without an ambulance.

regerugged · Answer

You can make a demand for settlement for any amount you think is fair.  You cannot sue the insurance company.  Only the other driver.  If and when you are recovered, make a demand.  The adjuster might say OK if he thinks it is reasonable.  After you sign a release, the company has to pay up within 30 days.  (retired claims adjuster)

A Hunch · Answer

You will have two claims if there is physical property (the car) and a separate medical claim if there are also medical bills.  If multiple family members were in the car and each has medical bills, there is a separate claim for each person.

Your medical claim will not be handled until you have finished treatment or the treatment exceeds the policy limits.
- If the policy limits are exceeded the insurance company doesn't do any negotiation.  You either tax the $25K (or whatever it is) or not.  They will not pay more than the policy limits.

If the damages exceed the policy limits, the individual has the option to sue them personally for the additional amount owed or not handle it with the individual.
- Most people who have low policy limits, like $25K, don't have any assets either.  What's the sense of suing you except to make you file BK??  Most people don't want to deal with that.

You don't have to use your own insurance, if you don't want.  But if you want the money that is probably the only way that you will get it.

Anonymous · Answer

Usually about a week after they receive a reported accident, thus depends upon the other driver.  Typically they are aware of what out of pocket expenses the injured driver owes and then pads the total a little to give you a little motivation to sign off. Your insurance company would cover your damage and medical bills, then seek to recoup the money from the at fault driver's insurance.  If the at fault driver didn't have insurance, that is when your insurance company taps into the uninsured driver money and may pursue the other driver for that money later.

You can sue the at fault driver immediately.  Typically car wreck personal injury cases get drawn out because the injury suffered in the accident continues to be treated (increasing the punitive damage claim).  But if there is no ongoing injury, often it is more logical to take the offer from the at fault driver's insurance company because the settlement amount wouldn't be much larger, and a third would go to the lawyer resulting in a smaller payout.

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How do car insurance payouts work?

3 Answers