Auto Accident Attorney Insurance Claims 1 — Questions and Answers
Question 1: What is the difference between liability coverage and uninsured motorist (UM) coverage in auto insurance?
- Liability covers injuries you cause to others; UM covers your injuries when hit by an uninsured driver (Correct answer)
- Both coverages pay for your own vehicle damage
- Liability coverage is optional in all states; UM is mandatory everywhere
- UM coverage only applies to pedestrian accidents
Correct answer: Liability covers injuries you cause to others; UM covers your injuries when hit by an uninsured driver
Liability coverage protects you from claims by others you injure, while UM coverage protects you when the at-fault driver lacks insurance.
Question 2: What is a 'first-party' insurance claim in an auto accident context?
- A claim filed with your own insurance company (Correct answer)
- A claim filed against the at-fault driver's insurer
- A lawsuit filed against the other driver directly
- A claim filed by the government
Correct answer: A claim filed with your own insurance company
First-party claims are filed with your own insurer under coverages like collision, MedPay, or UM/UIM.
Question 3: What does 'subrogation' mean in the context of auto insurance?
- Your insurer's right to recover from the at-fault party after paying your claim (Correct answer)
- The process of canceling a policy after a claim
- A penalty for filing too many claims
- The right to sue your own insurance company
Correct answer: Your insurer's right to recover from the at-fault party after paying your claim
Subrogation allows your insurance company to step into your shoes and seek reimbursement from the at-fault party after paying your claim.
Question 4: What is 'underinsured motorist' (UIM) coverage designed to do?
- Cover the gap when the at-fault driver's liability limits are insufficient for your damages (Correct answer)
- Provide coverage when you drive another person's vehicle
- Pay for damage to your vehicle from weather
- Cover medical costs regardless of fault
Correct answer: Cover the gap when the at-fault driver's liability limits are insufficient for your damages
UIM coverage pays the difference between your damages and the at-fault driver's policy limits when those limits are inadequate.
Question 5: In a 'no-fault' auto insurance state, what does this mean for accident victims?
- Each driver files a claim with their own insurer regardless of fault for basic medical costs (Correct answer)
- No one can sue for auto accident injuries
- Insurance companies determine fault for all accidents
- Drivers are not required to carry insurance
Correct answer: Each driver files a claim with their own insurer regardless of fault for basic medical costs
No-fault states require each driver to use their own Personal Injury Protection (PIP) coverage for medical expenses regardless of who caused the accident.
Question 6: What is a 'reservation of rights' letter from an insurance company?
- A notice that the insurer will investigate a claim while reserving the right to deny coverage later (Correct answer)
- A letter confirming full coverage for the accident
- A demand for immediate payment of premiums
- An offer to settle the claim
Correct answer: A notice that the insurer will investigate a claim while reserving the right to deny coverage later
A reservation of rights letter notifies the insured that the insurer is handling the claim but may later deny coverage based on policy exclusions or defenses.
Auto Accident Attorney Insurance Claims 1
What is the difference between liability coverage and uninsured motorist (UM) coverage in auto insurance?