What Does This Letter from My Insurance Company Mean, Anyway?

Nov 1, 2016

One of the purposes of buying car insurance is to so that your insurance company will defend you if you’re sued because of a car wreck, right? That’s what many people think. But often, after an accident, insurance companies send out a letter telling you that they may not cover your claim or they may not defend you if you have been sued.

Car insurance policies require insurance companies to defend against lawsuits filed for accidents. But this requirement only applies if the accident is “covered” under the policy. Most policies cover what is called “negligent” acts. They don’t apply to things the policyholder does on purpose, known as “intentional” acts.

For example, if a car with non-working taillights backs out in front of you in a parking lot and you hit it, you were either not at fault or negligent. It would depend on other facts in the case. Either way, it is likely that your insurance company would defend you if the other car’s driver sued you. But what if you were angry and ran into a pedestrian in the parking lot on purpose? That would likely be considered intentional, so your insurance company would probably not defend you if the pedestrian sued you. It also would not cover the damage to your car or medical bills for injuries you or the pedestrian might have suffered.

As you might imagine, it can sometimes be hard to tell whether something was a mistake or was intentional. When an insurance company isn’t sure, it will issue what’s called a “reservation of rights” letter.

The purpose of this letter is to tell you that the insurance company is not sure whether your accident is covered or not. When a lawsuit is filed, the only facts the insurance company knows are usually those in the lawsuit itself. The problem is that it’s a one-sided story. Until the insurance company gets to investigate what happened, it may not be sure what is has to do under your policy.

From your standpoint, it’s important to see an experienced Louisiana personal injury lawyer if you get one of these letters. These letters tell you that the insurance company may later decide not to cover your claim. If that happens, you would be on your own in the lawsuit, or at least for part of the lawsuit.

Don’t ignore a “reservation of rights” letter. It is a sign that your insurance company may not pay to defend you in a lawsuit and may not cover your injuries or injuries of others. If you’re not sure what to do, call the attorneys at Wright Pichon & Gray. We are experienced in working with insurance companies, and we’ll help you get the money you deserve. Contact us today for a free case review.

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