I got a letter from other person's insurance that i owed
 

Hi guys!

I had an accident back in April and i only liability insurance that covers $15000 for bodily injury and $5000 for property damage

I paid $13000 to fix my car, and now the other person (who i hit) insurance company sent me a letter saying they paid $12,000 which includes their insured' deductible.

And they are saying they have been informed that their claim exceeds my policy limit, therefore leaving a balance owed by me directly...

Do I really have to pay this..?
I mean.. it seems this insurance company is trying to make up their loss from me. Is this right way to do?

Please advise. Im frustrated.

They should be contacting your insurance. I would ask your insurance about it.

They are assholes. Throw it in the trash.

Don't ignore it. Forward the letter to your insurance agent asap, and do not discuss policy limits with the other person or their insurance company. Ask your insurance company what they will be doing to address the situation. If you are unsatisfied with their response, consider seeking legal counsel to protect your interests.

If you have 5k in property coverage, you're accountable for all damage over that amount. It's called being under-insured. Maybe you can settle for something less, if you don't have the assets.

I have 100k for property damage plus an umbrella policy. I could crash into almost anything and be fine, at least liability wise.

You need to speak with a lawyer. Soon.

Usually the other insurer can sue you for damages above what your policy paid. Turn it around the other way. Suppose someone smashed your car while it was parked and caused $20K in damage, but they only had $10K in coverage. Should you have to come up with $10K to fix your car?

Suppose you filed a claim with your comprehensive coverage instead. Your insurer gets the $10K from the other driver's insurance through subrogation. Should your insurer have to pay the extra $10K when it was the other guy's fault? Your insurer agreed to accept your risk, not the other guy who didn't buy enough insurance. If we didn't have the incentive of potentially getting sued, everybody would just buy the minimums, nobody would ever be made whole after an accident and rates for comprehensive insurance would skyrocket.

Sometimes state insurance regulations put limits on how insurers can recover, so you need to speak with a lawyer and not rely on the idiotic responses posted on a message board. A lawyer will be able to lay out your options and help you find the best way through this.

But whatever you do, don't ignore it, unless you just like having judgments entered against you that result in liens against your property and bank account.

Compulsory third party for around $20 million, costs me around $500 a year, covers people and property

Plus

Comprehensive insurance, cover my vehilce and their vehicle if I'm at fault in an accident, $1000 a year

Plus rego, $500

Total cost to keep car on the road legaly with no risk, around $2k a year

Oh, and by no risk, you need to be sober and not on drugs, if you are found to be over the legal alchol limit, or on drugs, all claims will be denied

That's not just illegal drugs, that also covers misuse of prescription drugs

PPPPP

Yes you can be liable for this. If this is the first letter and it did not come certified yes throw it in the trash and move on. The only way they can make you pay is to take you court and get a judgment against you. Until you get a summons to appear in court don't worry about it. If you do you will have chose to have your insurance company or a lawyer represent you. FYI the insurance company has lawyers that you have paid already. I have been through this with my Son. Similar situation, they sued my son personally for $1,000,000. Sent info to insurance company they worked it out he never had to go to court. it is a ploy to get more money from your insurance. company.

Thanks.. I literally have $100 in my bank account. I can't afford to pay this.

Will I go to jail if I go to court and have to pay this and I can't pay?

I don't even have any assets except my car

No you can't go to jail. They haven't had debtor's prisons for a while now. It will play havoc with your credit score for a long time.
As said you need to talk to your insurance company and see if they have indeed already paid out the max and that you are on the hook for the rest. Once you know where you really stand then you can work to correct it.

Ignore all letters they send you! Do not talk to them on the phone! They are trying to bully/scare you into paying. You do not owe them anything until you have a settlement against you in court. It is a waste of time for them to get a settlement against you. If they sue you it is just do that to get more out of your insurance company.

This is horrible advice. If the costs did indeed exceed his woefully inadequate insurance then the other insurance company is well within their rights to recoup those costs from him directly. His coverage was for only $5,000and the costs to the insurance company were $12,000 this leave a shitload of cash on the table. Ignoring the letters and pushing it to court could only make the whole thing worse for him.


He is a fault. He admits he is at fault. Why should somebody else (yes, even an insurance company) take the hit for his accident? The moral of the story is that if you can't afford to properly insure your car you shouldn't be driving it.


If this was flipped around and he was saying some underinsured guy hit him then everybody here would be screaming for their blood since they were just a horrible human and should not be allowed on the road.

My insurance claim department is not even pickinup..

F*** Geic*

So once I figure out my insurance company has paid the max.

What would you recommend to do next? Call their insurance company and tell them I have no money..?

I can't even hire a lawyer. I have $100 in my bank account

I am going to make some assumptions here so correct me if anything is wrong.


You are distinctly at fault in the accident. You received a ticket or charge and did not fight it. It is now too late to get a lawyer and try to fight the level of responsibility.
Your insurance policy was for up to $5,000 property damage and the repairs were $13,000. This leaves $8,000 left over. Your insurance company is NOT going to cover that since your premiums paid were only for the $5,000 max. The remaining part is your responsibility not theirs.
You have no money but that means nothing when you now owe some. There is really no way to get out of it and the $$ amount is high enough that the other insurance company is not going to just walk away.


What I would do is speak to the other company and see if you can make any arrangements for payments. Ignoring it isn't going to make it go away since the insurance company has a totally legitimate and reasonable claim against you. If they take it to court and get a settlement against you (not having any money is not a defense and they WILL win) then you will end up paying even more since legal and court costs will add up fast and will get tacked onto what you owe. Contacting them and getting a deal made will cost you money but it will be less than a court judgement and will probably not impact your credit score. Even if you had to take out a loan or (I hate to say it) sell the car to cover the costs you may be better off than any forced settlement.


Yes the whole thing sucks but hopefully you now understand the importance of full coverage insurance.

You're not going to jail.

Find a legal aid group:
http://www.calbar.ca.gov/Public/Need...ree-Legal-Help
https://www.courts.ca.gov/selfhelp-lowcosthelp.htm

Also call your insurance agent or whoever did the claim for you. See if they have any advice or know somebody at Geico to talk to.

Your insurance company probably doesn't have a reason to defend you. Your liability limit is so low, their lawyers would cost more. If you had a 1 mil policy, they'd definitely hire lawyers for you. Insurance is not a legal service.

Oh and THIS ^


Don't know if you have debt services there but they may be able to negotiate with the insurance company as well.

As an aside, I was completely taken aback by California having a minimum insurance coverage level of $5,000 for property. In Georgia, its $25,000 which is still totally inadequate but 5x more! Massachusetts also has a $5,000 limit.

If any states I would have thought those two would have some outrageous minimums.

In two states, New Hampshire and Virginia, insurance is totally optional, you just have to show means to be able to self insure. I'm assuming this is on paid for cars though.

Here's a listing by state.

We don't break it into property and injury here it is all lumped into "liability". The minimum coverage is $200,000.

Makes way more sense to me, but you know 'Merica!

Even at $200,000 I don't feel that comfortable. If you kill or injure somebody then $200,000 could be gone fast. I pay an extra $50 a year for $1,000,000 in liability.

I grew up in Virginia, at the time it was $500 to be uninsured. No proof you could afford anything more than the $500 "fine".


I'm on the receiving end of this situation. T-boned in my old pickup a few years back when a lady ran a red light. Not her car, no license, no insurance, etc etc etc. I get a check for $75 every month from the Missoula County court. The body shop quote was $3200-ish. Assuming the judgement was for the full amount, I'll keep receiving a check for another 3 years.

Thank you for the gracious advice.

One thing I am considering is that I don't have any asset nor any balance over $1000 in my bank account.

One lawyer told me that they are not even collecting debts when the person at fault doesn't have any asset.

Should I appeal this to the insurance company to waive or reduce the amount?

Is there any tip that I can make the situation better?

And.. should I wait for another letter since this is the first letter?

Damn I JUST went through this last month. I was found at fault and also $5,000 property damage and wasn't aware and also first accident found at fault. Total cost was over $12,000 but spoke with the other insurance and got it to go down to $4,000 if I paid the whole lump sum instead of payments. Had to use some of what I've been saving but lesson learned.

I'm going to suggest something that I don't think has been mentioned here yet.

You say you have $100 dollars in your bank account, you just spent several thousands fixing your car after this incident. You're _likely_ going to be on the hook to owe the other party's insurance.

If I were you, I'd attempt to sell the car; the sooner the better. Get what you can from it and settle your financial situation as best as you can.

You'll also be saving money from not having to pay the insurance (which will likely have gone up because of this incident too) and registration.

It sucks but I think this is the kind of situation where you need to learn how to make the right decision, even if it hurts a bit.

This is why you should pay for under insured motorist coverage. Especially if you lived in a state that had that low of a requirement.



I still believe it is not financially feasible for the insurance company to go after him. they are just bullying him to recoup some of their loss.



Mitama have you received a certified letter? if not they are not serious yet.

I can't see carrying less than $200k in property damage coverage. What if you hit a house or some of the cars that cost more than a nice house? There are plenty of those cars on the roads around here, I don't want to tangle with that mess.

Once they have a judgement they can collect themselves or sell it to a collection agency. They can do things like put a stipend on your wages or tax returns, put a lien on your car, etc. Will they? Maybe not. But before a judgement you may have some control to the circumstances.

Talk to your insurance. Contact your county bar association for a consult. Usually you can speak to a lawyer to get brief advice for under $100 for a 30-60 minute consult. While there are some knowledgeable people here it is still a random group of people on the internet and nothing can replace solid legal advice. I would not speak to the other party's insurance until I had done these at least.

I talked to someone working in collection in my company. The whole department meets every morning to talk about every single account and progress. It's not bullying, it's their job. It doesn't take that much to get a judgement and once they have that, they can hand it to the sheriff to enforce it. They may leave it at that but having the judgement in your credit history will really mess you up. hate to say this but the OP is lucky he didn't hit a Porsche or Ferrari. Then it run into $30 to $50K damage. I agree with what others say, start talking to the other insurance company and reach some kind of payment deal. Once they have the judgement and go after you, your credit history is toast and that affects you more than you know. .

Yep. Under/non insured policy is required by law here. Everybody has it even if they don't realize it.

He could wait for the more serious letters but he should be preparing while doing it. If it was a couple of hundred then ya I would agree but this is too high an amount to expect them to just give up.

I also repeat that they are not "bullying" anybody. They are trying to recoup the loss in a standard business manner. If somebody owed you $8,000 would you not send a letter or make a call? Should insurance companies just write off thousands of dollars from every claim and then just up the premiums for everybody to make up for it?

These kinds of situations could probably be averted entirely if states would require reasonable mandatory minimum coverage and require insurance companies to accept them as full settlement in an accident. Obviously an individual would have the right to sue for more, but they would have to hire their own attorney and file a separate civil action.

Typically jury's do not award damages over and above a reasonable amount unless there is something like drugs or alcohol involved.

Don't know what else you can do in your situation but hopefully you've learned the importance of rainy day funds and not cheaping out on car insurance coverage? You spent $13k repairing your car, you blew $9k at the Casino, and now your bank account is $100... Dude.

***I'd recommend following the advice of what has already been laid out, but wanted to add one additional item.

You have your car insured, did you happen to bundle with a renter's insurance policy? Renter's insurance covers your personal property AND has coverage for personal liability. Depending on your state (check with your company), the additional funds you are on the hook for could be covered under a renter's insurance policy since you are personally liable. It's worth looking into if you have one.

Only $200k? I could have sworn it was either $500k or $1M minimum. Pretty sure I have either $1M or $2M for roughly $15 a year.

Yep the minimum is $200K. Doubt there are many that take that though.


Third Party Liability Coverage - This type of insurance covers you if you cause an accident that hurts or kills another person, or causes property damage to their car. Under FSCO rules, all Ontario drivers must carry at least $200,000 in third party liability coverage. For many reasons, a lot of people choose to carry more than this minimum amount


https://www.myinsurancebroker.com/in...ce-in-ontario/

Canada isn't as sue happy. Also not as big on personal responsibility/freedom like the US.

yep I have seen your concept of "responsibility" (great example in a thread this very minute) and love the California idea of "freedom". You obviously are clueless about Canada and Canadians and our ideals.

What is considered as a certified letter?
Their company name and representative is on the letter, but not like stamp or anything

Certified mail would look like the envelope below, with tracking to the sender to verify it was delivered to you. It is entirely possible that you would have had to have signed for it, but not always required.

https://www.stamps.com/assets/images...ed-mail@2x.jpg

WAIT!
Where did the $9K come up?

I don't think you're interpreting me as meant. Philosophically, no-fault insurance is offensive to a lot of Americans. Of course it's somebody's fault, they'd say. Just because no-fault makes everything easier, reduces suing, and costs everybody less doesn't mean Americans will give up their ideals. Plus the insurance companies and lawyers gotta make money, so they push that philosophy.