What is the purpose of buying car insurance? Certainly, one purpose is to comply with California law, which requires drivers to carry certain minimum amounts of coverage. But setting that aside, insurance is there to keep us from carrying the potentially huge cost of an accident, right?
Car wrecks cost money. After an accident, there are frequently medical costs to be paid and cars to be fixed. Some people wind up in the hospital or in long-term treatment, unable to work. These costs add up quickly, and most people are not financially able to cover those costs.
So we pay premiums to obtain coverage in case we are in an accident. We expect that our insurance will cover the brunt of our medical expenses, as well as car repair or replacement. We also expect that if we are at fault, our insurance company will do the same for others injured in the accident, whether they are other drivers or passengers.
While these are normal, reasonable expectations, many people are surprised to learn—after an accident, when it really matters— that their interests do not necessarily line up with those of their insurer. Insurance companies want to pay as little as possible to us and to those injured in crashes with us. Sometimes they refuse to cover the damages altogether.
When these interests collide, the insurance company sends out a “reservation of rights” letter. This is a letter telling the person who bought the insurance that although the company is going to proceed as if the accident is covered for now, it is reserving its rights to later deny that the accident is covered by the policy.
These letters usually look like form letters, but they should not be overlooked or skimmed over. In fact, the minute you receive a letter reserving the insurance company’s rights, you should contact an attorney experienced in insurance law.
The reservation of rights letter is a red flag for you that the company may not cover your accident in full. You may be stuck paying a judgment against you. You may even have to pay legal fees. It’s important that you push back if you disagree with any issue in a reservation of rights letter to protect your own rights. In some cases, you may even need to ask a court to find that your insurance company acted in bad faith in handling your claim.
Having fought insurance companies for more than 20 years, I know the professional help an experienced personal injury attorney can provide. We will work with you to obtain unmatched results and to defend your interests.
If you need help, contact us. That’s what we do.