Contracts for auto insurance place certain obligations on both the insurance company and the insured driver. For example, the insurance company is generally required to defend an insured driver in court if that driver is sued due to a “covered” motor vehicle accident. Depending on the details of the crash, however, an insurance company may ultimately decide that the insured driver’s actions are not covered under the policy.
Just after an accident occurs, facts can be fuzzy. It can take the police some time to determine what they think happened. Often, even a driver involved in an accident may not be aware of all the facts that caused or contributed to the accident and to his or her injuries.
Similarly, when a claim is first submitted to a driver’s insurance company, the company does not know very much about what happened. To clear things up, it will assign an investigator to obtain relevant evidence — such as the police report, witness statements, medical records, and photographs — and then determine how to handle the case.
It is important to remember that the insurance company is not interested in anything other than finding a way NOT TO PAY. If they can back out of their obligation under the policy to cover a loss, then they will, because it saves them money, even if it hangs you out to dry. By denying the circumstances of coverage, or by claiming that you misrepresented some face when you applied for the policy, they can try to weasel out of their obligation to cover you if you are the person at fault, or avoid paying you if you are the claimant.
Your insurance company only has to meet certain obligations in its contract with you — such as defending you in a lawsuit — if the accident is “covered” by your policy. Insurance companies sometimes cannot immediately tell whether an accident is covered. When that happens, the insurance company sends its insured driver a “reservation of rights” letter. This means that although the insurance company is going to investigate the accident — or possibly even provide a legal defense in a lawsuit — it may later decide that the accident is not “covered” under your policy and stop defending you at that time. A reservation of rights letter, however IS NOT a denial letter. Rather it is a letter that says that, for the time being, they are going to continue to investigate and defend the claim for your, pending the outcome.
Because a reservation of rights letter puts the insured driver on notice that the company may LATER deny coverage, it is usually a good idea to see an experienced injury lawyer if you receive one of these letters.
At the Sandler Law Group, we believe in preventing or avoiding accidents whenever possible. Unfortunately, even when precautions are taken, accidents occur. If you or a loved one was injured in an accident, ASK ABOUT IT! Call the Sandler Law Group—toll free 800-9-THE-LAW or (757) 627-8900—to schedule an initial FREE consultation. You may also contact us online at www.sandlerlaw.net or by email at GSandler@Sandlerlaw.net.