Who to Sue in a Car Wreck.
In a typical car wreck case, the at-fault driver will have at least the minimum amount of insurance required by law. Prior to filing a lawsuit, I will negotiate directly with the insurance company. If there is no reasonable settlement to be had, I will file a lawsuit against the other driver. Because of his policy, the insurance company will provide and pay for an attorney to defend their insured driver, and will pay any settlement or judgment against their insured (to the limit of their coverage amount). Since it is the at-fault driver who was, well, “at-fault”, and not the actual insurance company. That is who we sue.
The insurance company doesn’t have to pay anything unless their insured is found at fault, so just suing the insurance company directly is doomed to fail. The exception is when the insurance company is denying or reserving their right to deny coverage. They may claim the dates of the policy have expired, or the driver was not an authorized driver, or some other reason. In that case, an injured driver can sue the at-fault driver’s insurance company directly, not because the insurance company caused their injuries, but because they are contractually obligated to pay for any liability of the at-fault driver up to their coverage limit. Contracts in general do not allow this and only allow the parties who actually sign the contract to be bound by it. But auto insurance contracts cover what is called a third party beneficiary. A person who is injured by an at-fault driver is deemed to have been intended to be protected by the policy of insurance. This is because the statutes of North Carolina require a certain minimum amount of liability insurance for everyone to have expressly to protect innocent victims of an automobile accident.
Usually, an insurance company will either clearly have (or have not) coverage for any particular accident, but if there is a controversy, the injured person is much more interested in resolving that issue than the at-fault driver, and the law gives the injured person an opportunity to have a day in court on whether or not coverage applies.
-Bradley A. Coxe is a practicing attorney in Wilmington, NC who practices in Personal Injury, Car Accidents, Medical Malpractice, Contract and Real Estate disputes, and all forms of Civil Litigation. Please contact him at (910) 772-1678.