In theory, your auto insurance policy protects you against catastrophic financial losses after an accident. In a perfect world, you could file a claim after an accident and quickly and easily receive funds to cover whatever expenses result from your injuries.
If you’ve ever been in an auto accident you know that we don’t live in a perfect world, and insurance companies do not have your best interests in mind when they are settling claims.
When does insurance pay after a car wreck? And, what happens when they don’t pay?
Which Insurance Policy Pays After an Auto Accident?
When you are injured in an auto accident, the at-fault driver’s insurance policy is the primary source of compensation – that’s the whole point of liability insurance.
Soon after the accident – sometimes within a few hours – an adjuster will contact you. They will be very nice. They may say that helping you is their number one priority, but you need to remember that their real goal is to deny your claim or pay you less than you deserve. Don’t even talk to them – let us handle the adjuster for you.
Uninsured (UM) Insurance Coverage
But, what if the at-fault driver doesn’t have insurance? The law requires all drivers to carry auto insurance, but not every driver does. Fortunately, if you have all the coverage you are legally required to have, you should be protected – up to a point.
You are required to have uninsured motorist (UM) coverage, which protects you when:
- The other driver has no auto insurance;
- The at-fault driver’s insurer denies the claim; or
- The at-fault driver left the scene and can’t be identified.
Underinsured (UIM) Insurance Coverage
What happens if the at-fault driver has insurance, but their policy limits are too low to fully compensate you?
You are still covered – up to a point – if you have underinsured motorist coverage (UIM). Unlike UM, UIM is not required by SC law, but it’s a good idea to buy it for exactly this kind of situation.
Your UIM policy will cover damages that exceed the limit of the other driver’s policy, up to the limits of your UIM.
Can You “Stack” Insurance Policies in SC?
When you use one insurance policy – such as UIM – to cover damages beyond the limit of another policy – such as the at-fault driver’s liability policy – it is called “stacking.” Not all states allow stacking, but in SC, you can and should seek compensation from every available source.
In South Carolina, you can recover damages from each available insurance policy until you have been fully compensated or until you run out of available coverage. Your SC auto accident attorney can help you determine all the different policies you can file a claim with.
What Happens When Insurance Companies Act in Bad Faith
Insurance companies are in business for one reason – to make money – and their business model is pretty straightforward: Maximize income, minimize costs.
They do this by collecting premiums from millions of drivers and training their adjusters to deny as many claims as they can and pay as little as possible when someone makes a claim.
To be fair, there are legitimate reasons for insurance companies and adjusters to approach claims cautiously – like any business, they don’t want to be taken advantage of.
Sometimes people make frivolous or even fraudulent claims. Other times, a driver might make a claim they believe to be valid, but, according to the law, the insurance company isn’t liable. And, insurers often deny claims because of a genuine disagreement or misunderstanding about what happened – your auto accident attorney can help clear up such misunderstandings.
But often, insurance companies deny legitimate claims for improper reasons, and, when that happens, you can file a lawsuit against the insurer for acting in bad faith.
What is a Bad Faith Insurance Claim?
“Bad faith” means that the insurance company has failed to meet its duty, under US and SC law, of “good faith and fair dealing” in every contract with every customer.
Auto insurance companies act in bad faith when they:
- Deny a claim without giving a reason;
- Make threatening statements;
- Refuse to defend a lawsuit;
- Deny reasonable requests for documentation;
- Refuse to make a reasonable settlement offer;
- Misrepresent the language in the policy or the law;
- Pressure a plaintiff to accept a smaller settlement by stalling negotiations; or
- Fail to conduct a prompt and thorough investigation.
So, what can you do if an insurance company improperly denies a claim? It depends on whose insurance company is acting in bad faith.
When Your Insurer Acts in Bad Faith
If you’ve made a legitimate claim and your insurer denies it in bad faith, you can file a lawsuit to recover expenses you’ve already paid for medical care, property damage, any damages that resulted from their bad faith denial, and possibly punitive damages, as well.
But, SC law does not allow you to sue an insurance company that you don’t have a contract with. So, if the accident wasn’t your fault, you file a claim with the at-fault driver’s insurance company, and they deny it – even in bad faith – you are not allowed to sue them… unless…
When the Other Driver’s Insurer Acts in Bad Faith
In some cases, your attorney at Coastal Law can still help you to force the at-fault driver’s insurer to honor your claim.
If the at-fault driver’s insurance company refuses to pay the claim in bad faith, and the jury awards damages to you that exceed the policy limits, the at-fault driver will be responsible for paying those excess damages above their policy limits.
We can then use the judgment against the other driver to negotiate – they have the right to sue their insurance company for bad faith, but possibly not the motivation. But, they might be willing to assign their right to sue the insurance company to you in exchange for not going after them to collect the excess judgment…
Once they agree, we will file a bad faith lawsuit against their insurance company, and we will demand they pay what they owe for the original claim, any other damages that resulted from the bad faith denial, and punitive damages.
Auto Accident Lawyers in Myrtle Beach, Conway, Charleston, and Columbia, SC
Your Myrtle Beach personal injury lawyer at Coastal Law will help you to determine all potential sources of recovery, including stacking insurance policies whenever possible to ensure you receive full compensation, and suing the insurance company directly when they refuse to pay a claim in bad faith.
Call Coastal Law now at (843) 488-5000 or message us through our website to speak with an experienced auto accident attorney in Myrtle Beach today.
