Auto Insurance Claims: Auto Accident, diminished value, insurance company


Question
Last week I rear-ended a lady who had slammed on her brakes to stop for a pedestrian... My property damage max is $15,000, but she drives a Mercedes (2005)...  Well, a week and a half later (today) I found out that SHE doesn't have insurance...  My insurance company is refusing to cut her a check unless she signs a release saying she won't sue me later on down the road for extra damages over the $15000...  Now SHE has a lawyer and wants to sue my insurance company!!!  I know I'm covered up to my max amount, but what is she doing???  Does she have a leg to stand on, with not having insurance and all???  I know my insurance needs to pay, but how am I protected from her coming after me, even though she doesn't have insurance??? Please help!!!!

Answer
Hi Jessika,

The fact that she doesn't have insurance does not matter at all.  Since you were at fault for the accident you are responsible for all costs and expenses that arose from the accident. You will owe for the cost of repairs, a rental car as well as the diminished value of her vehicle.

When you purchase auto insurance you select the amount of coverage you want to buy. Your insurance company will then pay any claims made against you up to the limits of your policy. If the claims made against you are more than the amount of coverage you purchased then you are personally responsible for the balance. If her lawyer files a lawsuit it will be against you not your insurance company. If the total of the claim exceeds your coverage limit, your insurance company may try to get them to settle for the amount of your coverage as you indicated. However, if they are unable to do so they will offer their limiit without a signed release and they will be free to pursue you for the rest.  Although it will not help in this case, you should contact your insurance company to increase your policy limits so this does not happen again.

I hope this helps
Richard Hixenbaugh