[Car accident claim exceeds coverage, send to collection agency?]

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daabearz
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[Car accident claim exceeds coverage, send to collection agency?]

Post by daabearz » Thu May 03, 2018 5:37 pm

[Split into a separate topic from: What happens when car accident claim exceeds insurance limits? --admin LadyGeek]

I feel like an idiot for not bumping up my insurance long time ago. I had the state minimum (CA - $5000), and hit the corner of a car, damage ended up being $7000 (on a $11000 car), so now the other insurance company wants me to pay the difference. They said it would be sent to collections if I don't keep in contact with them, but they are willing to work with me by setting up minimum payments. I lost my job a couple months ago and I only have like $100 in the bank. How would they send it to collections without having my SSN, also I never gave them anything and I have no connection to their company? On what grounds can they send a collection agency after me that would be connected to me outside of going to small claims court?

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Re: What happens when car accident claim exceeds insurance limits?

Post by golfCaddy » Thu May 03, 2018 7:20 pm

daabearz wrote:
Thu May 03, 2018 5:37 pm
I feel like an idiot for not bumping up my insurance long time ago. I had the state minimum (CA - $5000), and hit the corner of a car, damage ended up being $7000 (on a $11000 car), so now the other insurance company wants me to pay the difference. They said it would be sent to collections if I don't keep in contact with them, but they are willing to work with me by setting up minimum payments. I lost my job a couple months ago and I only have like $100 in the bank. How would they send it to collections without having my SSN, also I never gave them anything and I have no connection to their company? On what grounds can they send a collection agency after me that would be connected to me outside of going to small claims court?
You should start a new thread, instead of bumping one two years old.

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by LadyGeek » Fri May 04, 2018 12:26 pm

^^^ I got it.

daabearz, Welcome! It's not the age of the thread, but that starting a new thread allows us to focus on your specific situation.
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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by dm200 » Fri May 04, 2018 12:31 pm

daabearz wrote:
Thu May 03, 2018 5:37 pm
[Split into a separate topic from: What happens when car accident claim exceeds insurance limits? --admin LadyGeek]

I feel like an idiot for not bumping up my insurance long time ago. I had the state minimum (CA - $5000), and hit the corner of a car, damage ended up being $7000 (on a $11000 car), so now the other insurance company wants me to pay the difference. They said it would be sent to collections if I don't keep in contact with them, but they are willing to work with me by setting up minimum payments. I lost my job a couple months ago and I only have like $100 in the bank. How would they send it to collections without having my SSN, also I never gave them anything and I have no connection to their company? On what grounds can they send a collection agency after me that would be connected to me outside of going to small claims court?
The property damage minimum liability in CA is only $5,000?

Collection agencies have a lot of ability to track down folks that owe money. You are, apparently, only talking about $2,000 - and if it goes to collections - added fees can easily add up to a LOT more. Work on getting a job and making modest monthly payments.

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Silk McCue » Fri May 04, 2018 12:35 pm

I expect they have everything they need to pursue collections. Name, address, phone number, DL# etc. I expect they don’t need your Social to report this to the credit reporting agencies.

I recommend you stay in touch with the insurance agency on a regular basis to avoid having to deal with a relentlesss collector.

Sorry to hear of your difficulty.

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Chris K Jones » Fri May 04, 2018 12:39 pm

Sorry to hear of your difficulties, but the insurance company is being reasonable. You are responsible for the damage. Work with them. Best wishes.

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by jimmyrules712 » Fri May 04, 2018 12:44 pm

CA coverage minimum is only $5,000? Is that for personal injury as well? That's about enough to cover a band-aid at a hospital. I thought Oklahoma was low with a $50,000 minimum.

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dm200
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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by dm200 » Fri May 04, 2018 12:53 pm

jimmyrules712 wrote:
Fri May 04, 2018 12:44 pm
CA coverage minimum is only $5,000? Is that for personal injury as well? That's about enough to cover a band-aid at a hospital. I thought Oklahoma was low with a $50,000 minimum.
I suspect the injury liability is much higher than property damage.

Virginia is minimum $20,000 property damage, $25,000 one person injury, $50,000 two or more. I carry much higher.

Really surprised that CA minimum is only $5,000

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by alfaspider » Fri May 04, 2018 12:59 pm

dm200 wrote:
Fri May 04, 2018 12:53 pm
jimmyrules712 wrote:
Fri May 04, 2018 12:44 pm
CA coverage minimum is only $5,000? Is that for personal injury as well? That's about enough to cover a band-aid at a hospital. I thought Oklahoma was low with a $50,000 minimum.
I suspect the injury liability is much higher than property damage.

Virginia is minimum $20,000 property damage, $25,000 one person injury, $50,000 two or more. I carry much higher.

Really surprised that CA minimum is only $5,000
I have to imagine those minimum limits haven't been updated for inflation in 25+ years. $5k barely covers a fender bender these days.

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by celia » Fri May 04, 2018 1:07 pm

jimmyrules712 wrote:
Fri May 04, 2018 12:44 pm
CA coverage minimum is only $5,000? Is that for personal injury as well? That's about enough to cover a band-aid at a hospital. I thought Oklahoma was low with a $50,000 minimum.
I recently took someone to the ER in the middle of the night for a severe reaction to a medicine. A one-hour visit was billed to the insurance for over $4,000.

OP, do you agree you should pay the $2,000? I assume you are collecting unemployment benefits and should therefore be able to pay the other insurance company $10 or $20 a month until you have a job again. Avoid collections and just make arrangements that work for you.

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dm200
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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by dm200 » Fri May 04, 2018 1:16 pm

I suppose low property damage limits are an argument for carrying collision insurance. In this case, the owner of the car damaged by the OP would be out $2,000 unless he/she carried collision insurance.

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Rupert » Fri May 04, 2018 3:46 pm

The bodily injury minimum in CA is $15,000, so not included in the $5000 figure. Still way too low given the cost of healthcare these days. OP, I think you've learned a valuable lesson about insurance, i.e., buying the minimum (especially in CA) is penny wise and pound foolish.

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Candor » Fri May 04, 2018 8:20 pm

The insurance company is willing to work with you and they have requested you keep in contact with them in order to avoid going to collections but it seems you intend to avoid contact with them. Are they 'not working with you' or are you just looking for advice to avoid your obligation?

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Fan23 » Fri May 04, 2018 9:42 pm

Buying the minimum car insurance is sometimes the only option. My daughter moved to Detroit, a city full of poor people who drive uninsured because they can't afford car insurance. My daughter is insured at the lowest level, since it's all she can afford. I don't know about the OP's location, but some places have astronomical rates.

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by dm200 » Sat May 05, 2018 12:48 pm

Fan23 wrote:
Fri May 04, 2018 9:42 pm
Buying the minimum car insurance is sometimes the only option. My daughter moved to Detroit, a city full of poor people who drive uninsured because they can't afford car insurance. My daughter is insured at the lowest level, since it's all she can afford. I don't know about the OP's location, but some places have astronomical rates.
That is, a bit, surprising. I thought higher limits usually were not that much more in annual premiums.

I wonder if it is because of her (young) age? Maybe it will be better when she is a bit older - and has a good driving record?

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by dm200 » Sat May 05, 2018 12:51 pm

We are fortunate to have reasonable rates. We have well above the Virginia minimums - two older cars - liability (both property and injury) and pay about $72/month for 2 drivers and two cars. We drive the lowest annual mileage category and have good records. Have been with State Farm since 1972 (me) and us (DW and I) since 1978. Also have homeowners State farm since 1978

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by golfCaddy » Sun May 06, 2018 3:39 pm

Where's your insurance company in this? It's their job to defend you.

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by CurlyDave » Mon May 07, 2018 3:13 am

golfCaddy wrote:
Sun May 06, 2018 3:39 pm
Where's your insurance company in this? It's their job to defend you.
I don't think it is their job -- they have already paid out the policy limit.

I think the OP is going to have to get a job and make payments on the $2000.

This is not exactly a staggering sum, and just last week national unemployment went to 3.9%. Finding a job ought to be pretty easy.

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Earl Lemongrab » Mon May 07, 2018 12:04 pm

golfCaddy wrote:
Sun May 06, 2018 3:39 pm
Where's your insurance company in this? It's their job to defend you.
Defend against what? Do you think the insurance company would go to court over a tiny amount like this? As noted, they are only on the hook for the insured amount.
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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by jbmitt » Mon May 07, 2018 12:14 pm

The insurance company owes a defense only up until a settlement. They will likely try and obtain a release in exchange for payment of the limits. The other carrier may chose to substitute the limit, if they feel that the at fault party as assets that are collectible.

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Jack FFR1846 » Mon May 07, 2018 12:22 pm

Earl Lemongrab wrote:
Mon May 07, 2018 12:04 pm
golfCaddy wrote:
Sun May 06, 2018 3:39 pm
Where's your insurance company in this? It's their job to defend you.
Defend against what? Do you think the insurance company would go to court over a tiny amount like this? As noted, they are only on the hook for the insured amount.
No, the insurance company won't bother. They'll sell the debt to a collections agency. I don't see that as a good thing.
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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by dm200 » Mon May 07, 2018 12:24 pm

Jack FFR1846 wrote:
Mon May 07, 2018 12:22 pm
Earl Lemongrab wrote:
Mon May 07, 2018 12:04 pm
golfCaddy wrote:
Sun May 06, 2018 3:39 pm
Where's your insurance company in this? It's their job to defend you.
Defend against what? Do you think the insurance company would go to court over a tiny amount like this? As noted, they are only on the hook for the insured amount.
No, the insurance company won't bother. They'll sell the debt to a collections agency. I don't see that as a good thing.
That amount is well worth sending to a colection agency (will collect 30-50%) and then to an attorney (add more fees, charges). $2,000 is not such a "tiny" amount they will ignore it, in my opinion..

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Earl Lemongrab
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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Earl Lemongrab » Mon May 07, 2018 12:39 pm

I guess the question is whether there has been a court case and judgment. The OP doesn't really owe just because the opposing insurance company says so.
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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by zuzimb » Mon May 07, 2018 1:27 pm

dm200 wrote:
Sat May 05, 2018 12:48 pm
Fan23 wrote:
Fri May 04, 2018 9:42 pm
Buying the minimum car insurance is sometimes the only option. My daughter moved to Detroit, a city full of poor people who drive uninsured because they can't afford car insurance. My daughter is insured at the lowest level, since it's all she can afford. I don't know about the OP's location, but some places have astronomical rates.
That is, a bit, surprising. I thought higher limits usually were not that much more in annual premiums.

I wonder if it is because of her (young) age? Maybe it will be better when she is a bit older - and has a good driving record?
Based on my, admittedly quick, preliminary search for an individual policy the premiums vary drastically. Minimum in my state (TX) runs around $80/month, while my current coverage limits can run $400-$500/month on an individual policy. Somewhere in the middle would be a more reasonable $200/month. Perfect record, no accidents or tickets.

One car, one driver, but the driver is a 23 year old male. :moneybag :annoyed

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by dm200 » Mon May 07, 2018 1:33 pm

Earl Lemongrab wrote:
Mon May 07, 2018 12:39 pm
I guess the question is whether there has been a court case and judgment. The OP doesn't really owe just because the opposing insurance company says so.
It seems that the other owner's insurance company must have paid $7,000 to repair the damage done to the other car, under the other owner's collision coverage - then gone after the original post's property damage coverage for that amount - HOWEVER, that limit was only $5,000. Hence, the $2,000 deficiency. The facts seem not at dispute at all.

Is it worth the risk (to the OP) of actually having to pay (much) more than the $2,000 (well documented) amount being "requested"? With collection fees, attorney fees, potential interest, etc. that can be added to the $2,000 - my opinion is no. That $2,000 can easily grow to $3,000 - $4,000 in a relatively short time.

I believe that carrying this to a court judgment by refusing to pay will (in my opinion) almost certainly cause added amounts to be owed.

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Earl Lemongrab » Mon May 07, 2018 1:44 pm

dm200 wrote:
Mon May 07, 2018 1:33 pm
It seems that the other owner's insurance company must have paid $7,000 to repair the damage done to the other car, under the other owner's collision coverage - then gone after the original post's property damage coverage for that amount - HOWEVER, that limit was only $5,000. Hence, the $2,000 deficiency. The facts seem not at dispute at all.
Yes, but why does the OP owe that? By what legal authority has the debt been levied against the OP? He's not a customer of the other insurance company.
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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by dm200 » Mon May 07, 2018 1:52 pm

Earl Lemongrab wrote:
Mon May 07, 2018 1:44 pm
dm200 wrote:
Mon May 07, 2018 1:33 pm
It seems that the other owner's insurance company must have paid $7,000 to repair the damage done to the other car, under the other owner's collision coverage - then gone after the original post's property damage coverage for that amount - HOWEVER, that limit was only $5,000. Hence, the $2,000 deficiency. The facts seem not at dispute at all.
Yes, but why does the OP owe that? By what legal authority has the debt been levied against the OP? He's not a customer of the other insurance company.
No expert, BUT I suspect that the owner of the damaged vehicle is having his/her insurance company (that paid the $7,000 collision claim) represent him/her. The other insurance company represents the other party. Why risk the probability (in my opinion) of owing more (or much more) than the $2,000?

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Earl Lemongrab » Mon May 07, 2018 1:57 pm

dm200 wrote:
Mon May 07, 2018 1:52 pm
No expert, BUT I suspect that the owner of the damaged vehicle is having his/her insurance company (that paid the $7,000 collision claim) represent him/her. The other insurance company represents the other party. Why risk the probability (in my opinion) of owing more (or much more) than the $2,000?
That's a valid question. I just doubt the "you owe this and we'll turn it over to collections." Who says the OP owes that? Without an agreement or a court judgment, I don't see that it's owed . . . yet. They could send you same letter. You'd laugh because you're not too worried about going to court, but the principle applies. No legal authority has assigned fault to the OP. Just an insurance company.
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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by TropikThunder » Mon May 07, 2018 2:01 pm

Earl Lemongrab wrote:
Mon May 07, 2018 1:44 pm
dm200 wrote:
Mon May 07, 2018 1:33 pm
It seems that the other owner's insurance company must have paid $7,000 to repair the damage done to the other car, under the other owner's collision coverage - then gone after the original post's property damage coverage for that amount - HOWEVER, that limit was only $5,000. Hence, the $2,000 deficiency. The facts seem not at dispute at all.
Yes, but why does the OP owe that? By what legal authority has the debt been levied against the OP? He's not a customer of the other insurance company.
Would it be better if he waited for it to go to collections (or to court for a judgement)? He's going to lose without a lawyer (which will cost more than the $2,000 they say he owes). All the other insurance company will need to show is what they paid the repair shop minus what OP's insurance company coverered. Plus, it sounds like the OP either didn't contest the interpretation of the incident or he was assigned fault regardless.

Let's turn it around: if someone with insufficient coverage causes $10,000 damage to your car and their insurance will only pay $8,000, who should pay the rest? You? You're insurance?

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Earl Lemongrab » Mon May 07, 2018 2:06 pm

TropikThunder wrote:
Mon May 07, 2018 2:01 pm
Would it be better if he waited for it to go to collections (or to court for a judgement)? He's going to lose without a lawyer (which will cost more than the $2,000 they say he owes). All the other insurance company will need to show is what they paid the repair shop minus what OP's insurance company coverered. Plus, it sounds like the OP either didn't contest the interpretation of the incident or he was assigned fault regardless.
You're missing the point. How can they send it to collections? The OP could just send a letter that demands that the debt be validated. What will the insurance company be able to provide? "Umm, we decided that daabearz was at fault in an accident and we want the money."
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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Rupert » Mon May 07, 2018 2:12 pm

TropikThunder wrote:
Mon May 07, 2018 2:01 pm
Earl Lemongrab wrote:
Mon May 07, 2018 1:44 pm
dm200 wrote:
Mon May 07, 2018 1:33 pm
It seems that the other owner's insurance company must have paid $7,000 to repair the damage done to the other car, under the other owner's collision coverage - then gone after the original post's property damage coverage for that amount - HOWEVER, that limit was only $5,000. Hence, the $2,000 deficiency. The facts seem not at dispute at all.
Yes, but why does the OP owe that? By what legal authority has the debt been levied against the OP? He's not a customer of the other insurance company.
Would it be better if he waited for it to go to collections (or to court for a judgement)? He's going to lose without a lawyer (which will cost more than the $2,000 they say he owes). All the other insurance company will need to show is what they paid the repair shop minus what OP's insurance company coverered. Plus, it sounds like the OP either didn't contest the interpretation of the incident or he was assigned fault regardless.
OP appears to be judgment proof, i.e., broke, so this may just be an idle threat by the insurance company. Or it could be a real threat.
Because it could be a real threat, OP should talk to a lawyer and not just ignore the insurance company's demands. OP, contact your local bar association and ask if there is a volunteer/pro bono lawyer's program or legal help line in your community. This would be a very simple question for a personal injury/plaintiff's attorney or insurance defense attorney to answer.

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by TropikThunder » Mon May 07, 2018 2:33 pm

Earl Lemongrab wrote:
Mon May 07, 2018 2:06 pm
TropikThunder wrote:
Mon May 07, 2018 2:01 pm
Would it be better if he waited for it to go to collections (or to court for a judgement)? He's going to lose without a lawyer (which will cost more than the $2,000 they say he owes). All the other insurance company will need to show is what they paid the repair shop minus what OP's insurance company coverered. Plus, it sounds like the OP either didn't contest the interpretation of the incident or he was assigned fault regardless.
You're missing the point. How can they send it to collections? The OP could just send a letter that demands that the debt be validated. What will the insurance company be able to provide? "Umm, we decided that daabearz was at fault in an accident and we want the money."
No, OP's insurance company conceded he was at fault or they wouldn't have paid the $5,000 that his coverage provided for. Do you really think the other company will fail validation?
1. Copy of charges paid to repair the other person's car (showing what the cost was)
2. Copy of check incoming from OP's insurance company (admitting fault and showing how much is still owed)

Debt validated.

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by TropikThunder » Mon May 07, 2018 2:35 pm

Rupert wrote:
Mon May 07, 2018 2:12 pm
OP appears to be judgment proof, i.e., broke, so this may just be an idle threat by the insurance company. Or it could be a real threat.
Because it could be a real threat, OP should talk to a lawyer and not just ignore the insurance company's demands. OP, contact your local bar association and ask if there is a volunteer/pro bono lawyer's program or legal help line in your community. This would be a very simple question for a personal injury/plaintiff's attorney or insurance defense attorney to answer.
I agree OP is likely judgement proof, so his primary concern would be a collections account on his credit report. However, insurance companies have lawyers on staff, so OP's lack of assets likely prevents the other company from collecting on a judgement while not preventing a judgment from being obtained.

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Earl Lemongrab » Mon May 07, 2018 2:41 pm

TropikThunder wrote:
Mon May 07, 2018 2:33 pm
No, OP's insurance company conceded he was at fault or they wouldn't have paid the $5,000 that his coverage provided for. Do you really think the other company will fail validation?
1. Copy of charges paid to repair the other person's car (showing what the cost was)
2. Copy of check incoming from OP's insurance company (admitting fault and showing how much is still owed)

Debt validated.
Does your insurance company's decision make a binding debt for you? I'm not sure on the law here.
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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Rupert » Mon May 07, 2018 2:43 pm

Earl Lemongrab wrote:
Mon May 07, 2018 2:41 pm
TropikThunder wrote:
Mon May 07, 2018 2:33 pm
No, OP's insurance company conceded he was at fault or they wouldn't have paid the $5,000 that his coverage provided for. Do you really think the other company will fail validation?
1. Copy of charges paid to repair the other person's car (showing what the cost was)
2. Copy of check incoming from OP's insurance company (admitting fault and showing how much is still owed)

Debt validated.
Does your insurance company's decision make a binding debt for you? I'm not sure on the law here.
Exactly. That's why OP needs to talk to a lawyer and stop taking advice from folks posting on Bogleheads.

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by golfCaddy » Mon May 07, 2018 3:17 pm

CurlyDave wrote:
Mon May 07, 2018 3:13 am
golfCaddy wrote:
Sun May 06, 2018 3:39 pm
Where's your insurance company in this? It's their job to defend you.
I don't think it is their job -- they have already paid out the policy limit.
The OP didn't say the insurance company paid out the policy limit.

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by golfCaddy » Mon May 07, 2018 3:20 pm

Earl Lemongrab wrote:
Mon May 07, 2018 12:04 pm
golfCaddy wrote:
Sun May 06, 2018 3:39 pm
Where's your insurance company in this? It's their job to defend you.
Defend against what? Do you think the insurance company would go to court over a tiny amount like this? As noted, they are only on the hook for the insured amount.
It doesn't matter whether they are on the hook for $1 or $1M. They have a legal duty to defend their insured until the policy limits are exhausted in a judgment, which would require a trial, or a settlement, which would require a release of liability against their insured.
Last edited by golfCaddy on Mon May 07, 2018 3:24 pm, edited 2 times in total.

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by dm200 » Mon May 07, 2018 3:21 pm

golfCaddy wrote:
Mon May 07, 2018 3:17 pm
CurlyDave wrote:
Mon May 07, 2018 3:13 am
golfCaddy wrote:
Sun May 06, 2018 3:39 pm
Where's your insurance company in this? It's their job to defend you.
I don't think it is their job -- they have already paid out the policy limit.
The OP didn't say the insurance company paid out the policy limit.
Sure seems like OP did - (the way I read it)
so now the other insurance company wants me to pay the difference.
Damage sated at $7,000
Difference requested; $2,000
Policy property liability limit = $5,000

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dm200
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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by dm200 » Mon May 07, 2018 3:22 pm

golfCaddy wrote:
Mon May 07, 2018 3:20 pm
Earl Lemongrab wrote:
Mon May 07, 2018 12:04 pm
golfCaddy wrote:
Sun May 06, 2018 3:39 pm
Where's your insurance company in this? It's their job to defend you.
Defend against what? Do you think the insurance company would go to court over a tiny amount like this? As noted, they are only on the hook for the insured amount.
It doesn't matter whether they are on the hook for $1 or $1M. They have legal duty to defend their insured.
What is to be defended?? The OP limit is $5,000 and it is not contested that the OP is "at fault".

golfCaddy
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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by golfCaddy » Mon May 07, 2018 3:26 pm

Seeing the OP posted on Thursday and hasn't returned, I'm thinking this may be a hit and run poster.

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Earl Lemongrab
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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Earl Lemongrab » Mon May 07, 2018 6:51 pm

golfCaddy wrote:
Mon May 07, 2018 3:26 pm
Seeing the OP posted on Thursday and hasn't returned, I'm thinking this may be a hit and run poster.
I hate to think what he'll owe for that!
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by boglerdude » Tue May 08, 2018 1:30 am

And he was such a promising Boglehead... =)

So, can I send my neighbor to collections for not returning my leaf blower?

Rupert
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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Rupert » Tue May 08, 2018 6:43 am

Creditors (e.g., credit card companies, utilities) send accounts to collections without court judgments all the time. That's why you can dispute a collections account when it pops up on your credit report.

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dm200
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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by dm200 » Tue May 08, 2018 9:33 am

Rupert wrote:
Tue May 08, 2018 6:43 am
Creditors (e.g., credit card companies, utilities) send accounts to collections without court judgments all the time. That's why you can dispute a collections account when it pops up on your credit report.
Yes..

Jags4186
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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Jags4186 » Tue May 08, 2018 9:39 am

No job, $100 in the bank? I'd simply tell them the situation, you can't pay, you have no ability to pay, and they can send it to collections. I would even tell them if you get the ability to pay you'll reach back out to them but for now there is no money to give them.

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Jags4186 » Tue May 08, 2018 9:44 am

TropikThunder wrote:
Mon May 07, 2018 2:01 pm
Let's turn it around: if someone with insufficient coverage causes $10,000 damage to your car and their insurance will only pay $8,000, who should pay the rest? You? You're insurance?
Your insurance company should pay provided you carry uninsured/underinsured motorist coverage. What your insurance company does after that is their business. You're whole.

If you don't carry UM coverage then you're out the $2,000 unless you want to go collect it. That might mean going to small claims court and then trying to collect even if you win.

One thing to keep in mind is that if someone is judgment proof and the cost to get a judgment against them is low, it still might be worth going through with it. If that person does eventually get their act together and they want to buy a car/house/anything that requires borrowing money, they will need to clear the judgment before anyone loans them anything.

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dm200
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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by dm200 » Tue May 08, 2018 9:58 am

Regarding Uninsured/Underinsure motorist coverage, I suspect (perhaps others could comment) that if a claim was paid by your insurance company because of damages from such an uninsured party, then the insurance company would than try to collect what it could from the other party - wouldn't they?

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Earl Lemongrab
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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Earl Lemongrab » Tue May 08, 2018 10:00 am

Rupert wrote:
Tue May 08, 2018 6:43 am
Creditors (e.g., credit card companies, utilities) send accounts to collections without court judgments all the time. That's why you can dispute a collections account when it pops up on your credit report.
But you have a contractual relationship with them. You don't with some other insurance company.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

texas lawdog
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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by texas lawdog » Tue May 08, 2018 10:04 am

It's kind of amazing to me that people think that ability to pay is actually a defense.
Winning a judgement and then collecting on judgement are two different things.
All kinds of bad things can happen to people that don't pay - garnishments, levies, liens, interest charges, and bad credit is but a short list...
If the individual doesn't want to pay then wait until judgement is entered and get it dismissed via BK.
If accident was found to be due to negligence, then it probably will not be dismissed.

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Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Lynette » Tue May 08, 2018 10:11 am

Fan23 wrote:
Fri May 04, 2018 9:42 pm
Buying the minimum car insurance is sometimes the only option. My daughter moved to Detroit, a city full of poor people who drive uninsured because they can't afford car insurance. My daughter is insured at the lowest level, since it's all she can afford. I don't know about the OP's location, but some places have astronomical rates.
I looked at one source and Michigan has the third highest insurance price in the nation. Michigan is a no-fault state. I also looked at another factor. Insurance rates are determined by credit score and zip code. So if I lived in Detroit, my rates would be at least twice what they are where I live. Some of this is because an "injured" person can sometimes get medical for life. Of course there are a large number of ambulance-chasing lawyers.
Last edited by Lynette on Tue May 08, 2018 10:33 am, edited 1 time in total.

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