Imagine you’ve been involved in a car accident. Insurance information gets exchanged and claims get filed, but how do insurance companies determine who pays for what? The simple answer is that it just depends on the circumstances.
Liability Claims
If you are involved in an accident, the other party may file a claim with your insurance asking for monetary assistance with either physical damage or medical bills. This is called a liability claim. When a claim is filed, a claims adjuster will reach out to all involved parties and take down detailed information. If there happens to be a police report, the adjuster will include this information as well. Who is at fault is determined by the circumstances of the accident. Did someone fail to yield? Did someone run a red light? There are tons of different scenarios that could occur. Typically, if one party receives a ticket from the police, this is the responsible party. The insurance company of the responsible party is most often the company that pays for physical damage to the vehicles involved. This typically holds true for medical claims as well.
No-fault States
There are 18 states that require a special policy called no-fault insurance. This usually covers things like medical expenses or even loss of income, regardless of who is at fault. If you live in a state that is not considered a no-fault state, then it is most often the insurance company of the party that is found to be at fault that pays for most everything.
Homeowner’s Insurance
Homeowner’s insurance can be tricky. There are many scenarios that may cause an insurance claim to be filed. Determining if your policy will help cover losses can be hard and working with your personal Insurance Agent is best.
Medical Bills and Disability Claims
Let’s say you hired a roofer to perform repairs at your home. The roofer falls and gets injured. Is this covered under your homeowner’s insurance or is the roofer responsible for his own expenses? In general, homeowner’s insurance will cover the expenses of anyone injured on your property, even contract workers, like the roofer. One of the few times your homeowner’s insurance policy may not cover an insurance claim is if you were negligent or careless. With that said, the roofer should also carry General Liability insurance as well as a Worker’s Compensation policy. These will cover expenses related to any damage the roofer may have done and any injuries they experience while roofing your house. So, when hiring a roofer, or any contractor, always make sure to obtain a copy of their General Liability and Worker’s Compensation policies.
Property Damage
So your neighbor’s tree fell into your yard, causing damage to your garden shed and fence. Who is the responsible party? More often than not, if it’s in your yard, it’s your responsibility. In this case, you would file an insurance claim with your homeowner’s policy, not your neighbor’s. This may be different if the tree had root damage or other conditions that caused it to be a risk and your neighbor was aware of this and chose to do nothing about it.
Subrogation
What happens when it’s not immediately clear who is at fault or what insurance company should pay for what? Insurance companies have a process called subrogation. This allows for you to file a claim with your insurance company so that you can get back to normal – get your vehicle repaired, cover medical expenses, remove a tree, etc. Your insurance company will then request reimbursement from the insurance company of the at-fault party. This is something that happens behind the scenes and is not a process you are typically involved in, other than providing any requested information.
How to Proceed
If you’ve been involved in a car accident, had someone get injured on your property, had a neighbor’s tree fall in your yard, or any of the other numerous circumstances that could cause insurance companies to get involved, the best thing you can do is to contact your Insurance Agent. Your Insurance Agent is knowledgeable and is there to guide you in the right direction.
If you are in the process of obtaining insurance, be sure to contact us for a quote. We can make sure that all of your questions are answered and that you get the insurance that best fits your individual circumstances. We are here to help.
