Can an Insurance Company Sue You for an Accident in Illinois?

A car accident can be a terrifying ordeal. The collision could cause life-altering injuries, expensive medical bills, vehicle repair costs, and emotional distress. After a car accident, most drivers or passengers will turn to their car insurance companies for compensation.

Depending on your insurance policy, the damages from the car accident may be covered. In some cases, injured victims may even sue other drivers or their insurance companies for legal damages if insurance claims are insufficient to cover their losses.

Can an insurance company do the same? Perhaps you are worried that a car insurance company may sue you for the accident. Although rare, there are some circumstances where an insurance company could sue the at-fault driver or policyholder.

The Primary Function of Car Insurance Companies

A car insurance company handles claims from policyholders and provides compensation to injured parties. Insurance coverage may be used to pay damages, including medical expenses, vehicle repair or replacement costs, or uninsured motorist costs.

In most cases, an auto insurance company has no reason to sue individual policyholders who are clients. Additionally, it is rare for an insurance company to sue another driver who causes an accident.

Subrogation

If you get hurt in a car accident, an insurance company will likely end up paying those damages through subrogation. This means your insurer pays you and recovers those costs from the at-fault driver’s insurance company.

This scenario occurs when the injured party initiates the insurance claim process and recovers compensation from their own carrier. Then, their insurance company recovers those costs from the at-fault driver’s insurance company to recoup the losses.

This process ensures you receive prompt compensation while insurers handle the behind-the-scenes financial details.

Situations Where an Insurer Might Sue

Though a car accident lawsuit usually comes from the injured victim, an insurance company can sue an individual policyholder or driver. Here are some scenarios that could result in an insurance provider filing a lawsuit.

Lack of Cooperation

Each party involved in the car accident must cooperate with authorities, lawyers, and insurance adjusters. If you did not cooperate with the investigation after the accident occurred, an insurance provider could sue you to deny coverage or recover costs they have incurred.

If you breach your insurance contract, this could also lead to lawsuits. For example, if you have a specific timeframe for reporting an accident to your provider and fail to do so, it could constitute a breach of contract. This action opens you up to a potential lawsuit.

Fraudulent Claims

The claims process is an essential legal process that allows injured parties to recover compensation after an accident. If you abuse this system and make fraudulent claims, your insurance company may sue you for misrepresenting facts.

Attempting to claim compensation based on a material falsehood is dishonest, so avoid exaggerating or misrepresenting information when you file an auto accident claim.

Failure to Pay Premiums

Your liability insurance contract requires you to pay premiums to maintain the policy. If you fail to make timely payments according to your contract without ending the policy outright, the insurance provider has the right to sue you for those unpaid amounts.

Exceeding Policy Limits

Damages after a car accident may exceed the insurance policy limits of the injured party. For example, property damage liability and bodily injury combined could cost far more than the individual’s policy can cover.

If you have enough assets to make up the difference, the injured party or their insurance company could sue you for additional compensation.

Subrogation Claims

Subrogation is a claim an insurance carrier can file to recoup its losses. Subrogation is not a lawsuit.

Let’s say you are at fault for a car accident. The other driver in the accident was hurt and dealt with high medical costs to recover. Initially, their insurance coverage paid for these costs when they filed a claim with their provider. However, since you are at fault for the company’s losses, they can file a subrogation claim against you or your insurer.

This claim gives them a legal right to recover the losses they incurred when their policyholder claimed compensation for medical expenses, even though you were responsible for the collision.

The Subrogation Process

Subrogation often occurs without much input from the drivers involved in the accident. If you were hurt in an accident caused by someone else, your insurance policy would cover your losses. Then, the insurance company would initiate a subrogation claim against the other driver’s carrier to recoup those costs.

You can also sign a subrogation waiver, which prevents the insurance company from filing this type of claim. This process is usually done if you and the other driver agree to settle after the car accident without involvement from the insurance companies.

Protecting Yourself from Lawsuits

Life after a car accident is challenging enough, so the last thing you want is to become a defendant in a lawsuit. Here are a few strategies to protect yourself from potential personal injury claims.

Adhere to Policy Terms

Read your insurance policy terms carefully. Even if you have not been involved in an accident recently, brushing up on these terms is wise. You must understand the terms and conditions of your insurance coverage to ensure you don’t violate any terms that could compromise your standing.

Pay your premiums on time, avoid fraudulent claims, and practice safe driving to protect yourself from potential lawsuits.

Cooperate with the Investigation

If there is an investigation surrounding the car wreck, cooperate fully with all parties. That includes police officers, lawyers, and insurance adjusters. If you misrepresent any facts or avoid responding to them, you could be held accountable with a lawsuit for failing to cooperate.

Seek Legal Advice

Contacting an experienced car accident lawyer is an essential step after a collision. Navigating claims and lawsuits can be overwhelming, so seeking legal advice would be wise. If you receive notice of a potential lawsuit or have concerns about your liability coverage, you should consult an attorney who will answer your questions.

How a Car Accident Lawyer Can Help You

An experienced attorney can make all the difference in protecting your rights and financial future. Whether you plan to sue the at-fault driver or defend against lawsuits from an insurance company, you will need a legal expert to help you navigate the process correctly.

Here are a few ways a car accident attorney can help.

Defending Against Lawsuits

Being a defendant in a lawsuit can be stressful. If you lose the case, you could owe a lot of money to the insurance companies or injured parties. You will need a strong defense, especially if the odds are stacked against you.

Having your own lawyer will level the playing field so you can defend yourself against the lawsuit. This legal professional could be the difference between winning the lawsuit and facing significant financial issues after a payout.

Negotiating with Insurers

Negotiations with insurance companies are common as many car accident cases settle out of court. The insurer will attempt to offer the lowest possible settlement to avoid losing money. To accomplish this, they will undermine your personal injury claim and minimize the impact of the collision.

Your lawyer will negotiate with the insurance carrier for fair compensation that covers all your legal damages.

Protecting Your Rights

Whether you are the claimant or defendant, you have certain rights protected by state and federal laws. Other parties could violate your rights, especially if you are unfamiliar with them. When you work with a professional lawyer, they will help you understand your rights throughout the process.

Their expertise will be invaluable as they ensure you are treated fairly by lawyers, claimants, defendants, insurance adjusters, and even judges.

Secure Expert Legal Counsel!

If you plan to seek compensation after a car accident, or you are the defendant in a lawsuit from an insurance company, you need experienced legal representation to build a strong case and defend your rights.

The team at Rosenfeld Injury Lawyers specializes in car accident cases. We know what it takes to negotiate with insurance companies, collect compelling evidence, and convince judges or mediators of your side of the case. Car accident lawsuits are complex, so you’ll need the right attorney by your side to navigate them successfully.

We work on a contingency fee basis, which means there are no upfront costs for our services. Instead, we only receive payment once we have won your case. Additionally, you can take advantage of our free consultation before filing a claim or personal injury lawsuit.

Call us today at 888-424-5757 or complete our contact form to book a free consultation with a Chicago car crash lawyer.

All content undergoes thorough legal review by experienced attorneys, including Jonathan Rosenfeld. With 25 years of experience in personal injury law and over 100 years of combined legal expertise within our team, we ensure that every article is legally accurate, compliant, and reflects current legal standards.