It seems like you may have been screwed over, but also don’t completely understand how auto insurance works in most places which might be partly intentional for the industry.
In most places damages to your vehicle are covered by your own insurance. You can sue the other driver and their insurance will cover them if necessary, but generally you’re only able to be reimbursed up to a certain amount which is why you need to have insurance yourself. Yea, it’s backwards and effectively forces you to have more insurance than you might otherwise want or need.
Well, you are generally (AFAIK, this is true of all US jurisdictions) legally entitled to your full actual damages if the other driver is completely responsible, but they are only required to carry a certain amount of liability insurance (or, alternatively in many cases, bond); beyond that, you are stuck collecting from them individually after securing a judgement, which may be impractical if they simply don't have the assets.
Michigan for example. https://www.michigan.gov/documents/autoinsurance/ip206a_6799...
Beyond that, you should insure yourself sufficiently because you can’t depend on others to have adequate coverage. Doesn’t matter that you can sue if they have no money.
The public policy motivation for liability insurance is to protect the lawsuit route. If you sue an uninsured driver and win, you might not be able to collect (getting blood from a stone). But if they have liability insurance you can collect on a judgement.
You choose to drive with only liabilty insurance, and are upset that insurance didn't cover an accident when you had no liability.
That doesn't mean it's a good idea to not get comprehensive insurance, but police reports should probably carry some weight without requiring a suit.
Even without insurance or greater wealth, a party from whom you believe a liability should exist who has no interest in paying could have done the same thing here. If you aren't willing to sue over a disputed liability, it might as well not exist.
> but police reports should probably carry some weight without requiring a suit.
Any proposal to do that in effect makes the police investigation a court of first instance, which either means creating additional procedural rights that apply before it can be completed (driving up costs) or a very real denial of due process.
Not nessasarily. The 'additional weight' could still be something that requires a suit to take advantage of directly, but which the threat of compels behavior. For example, many localities have rental laws that compel the landlord to pay thrice what they would otherwise owe in certain circumstances. E.G. if my landlord simply refuses to refund my security deposit without proper reason, or without following proper procedures within 45 days, then I can sue for 3x the deposit and attorny fees.
A similar thing can be implemented for vehicular damages. Something along the lines of:
1) If you are found liable and
2) Were given adaquete notice and oppurtunity to pay and
3) Ought to have known you were liable
Then the defendent is entitled to punitive damages for your making them take you to court. You don't even have to go as far as most tenent laws go. You could allow for a loosing defendent to argue that there defense was reasonable, (or reasonable given evidence available to them at the time), and that they should therefore not owe punitive damages.
Of course, this still is only tangentially related to insurance.
But there are already additional costs the insurance company would bear if it went to court, which is why they will mostly settle if there is any substantial evidence (like a police report) and even a shadow of a threat of legal action, including—but not limited to—an insurance company on the other side. Neither that nor any additional weight you give the police report that requires going to court alters the calculus at all when the liable party (whether or not they have an insurance company as their agent) is certain you won't take that step.
How would that even be defined? Is it just based on the balance of evidence available? We already have something for this. If one party is really obviously guilty, then the other party can call for a summary judgement and skip much of the expensive trial.
> How would that even be defined?
That depends on how claiment friendly you want to be.
The key piece would be: "based on what the defendant knew when they refused the request for payment". Standard evidenciary rules apply for showing that the defendant knew something. In this case, the key evidence would be a police report and pictures sent to the insurance company, so I don't think there would typically be a dispute here.
The harder part is defining "ought". Courts already have a reasonable person test they apply to other situations. You could also apply the clear and convincing evidence standard to the applicable evidence (or, if you really wanted to, either preponderance or beyond a reasonable doubt).
The real answer is that in this hypothetical the legislature would pass a law, and then the appellate courts will spend decades clarifying the law until the legislature changes it again.
Imagine if murder cases were only prosecuted if the family had funds to investigate, and they only got refunded if the murder were proven.
Vehicular crimes obviously don't depend on either a victim or the victim choosing to take legal action for the offense, OTOH, wrongful death, the civil cause of action parallel to murder and other criminal homicide offenses...has exactly the same requirement as any other tort that someone has to file suit.
To the extent there is a criminal or other public offense (traffic infractions may or may not be strictly criminal depending on state law) involved in the accident, that would have been pursued without the victim lifting a finger as a consequence of the police report, just like murder investigations.
I think this might be at the heart of it.
The article (about how hard actuarial math is) and the insurance buyers make the mistake of thinking that all that matters is downside in case of event X with particular probability P. However, instead you have to think about chances of X AND chances of being able to navigate a system that is outright adversarial to parties that are not the insurance companies.
The “house” always wins…
Are people going through and calculating the expected utility of purchasing insurance, and that calculation is being thrown off by counterparty risk, leading them to buy insurance they wouldn't have bought? I doubt it.
>The “house” always wins…
is there an expectation otherwise? You buy insurance to protect against risks, not because you think it's a positive expected value investment.
But that's the thing. The other driver was only declared "at fault" by the police report, which might hold some weight, but isn't the final say.
>but police reports should probably carry some weight without requiring a suit.
what would that entail?
Seems clear to me he's upset the other driver's liability insurance isn't covering the accident in a case where law enforcement and others see clear liability for that other driver, and other driver's insurer's reasons seem to more or less amount to "you haven't legally compelled me to pay yet, and probably won't."
So? Law enforcement officer's testimony isn't a court judgement. You can't seriously expect anyone to pay you if all you have is some testimony[1] that they owe you money.
Testimony is worthless until it is admitted into evidence in court. Keep that in mind and you expectations will be in line with the harsh realities, and then you won't be confused and disappointed about the outcomes.
[1] Testimony, even from a LEO, isn't a fact. During a matter in court, testimony that concludes that one party is at fault may be disputed by testimony that concludes that the other party (or no one at all) was at fault. In auto accidents it is not unusual for a court to decide that the liability is shared between the parties (50/50, 70/30, etc) - "Sure, the other guy swerved into you, and he really should have checked his blind-spot before performing the lane-change, but should you have really been overtaking in the slow lane? He should have checked his blind-spot, but you should have not accelerated into his blind spot in the first place."
A friend of mine had the same experience from the other side. She ran into some guy's car, apologised for her mistake and told him not to worry because she was fully covered. The first sign that something wasn't right was when a summons to appear at the magistrate's court appeared in the letter box.
She asked the insurance company what was going on and they said "just send the paper work to us and don't worry, we'll take care of it".
Then she got a knock on the door from a pair of court-appointed officers who were there to discuss her financial situation and assist her in arranging a payment plan to pay off her fine. Her insurance company had not sent a representative to the trial, so the magistrate found in favour of the only party that had turned up.
After some screaming on the phone, the insurance company paid the full amount of the judgement.
Any judge worth his salt will understand the global implications (courts clogged with litigants, inability of poor people to use cars) if insurance companies stonewall when their client is at fault, whatever the odd lot who comment in HN think. The judge should hit the other party.
Bear in mind that this is a matter of public interest and romwell has not signed an NDA. S/He should name that insurance company!
What judge?
The whole scenario is around a party who was not willing to go to court. There's no judge involved.
The judge will know that the other driver's insurance will ultimately pay, so he can punish the insurance company for its intransigence by putting a heavy financial penalty onto the other driver.
Yes, that's how you formally sue in an accident. It's not the hack you think it is, though, the insurance company defends the lawsuit, that's part of the insurance agreement.
It's also specifically what OP was unwilling to do which resulted in the insurance company not paying, and why any “the judge should...” is missing the point. If there was even the slightest expectation there would be a judge, the insurance company would have likely paid without batting an eye.
And often just filing is enough for them to do the math and just pay out.
Sure, it’s not fair, but that’s why we have courts in the first place.
Which, given that the OP resides in California and was unwilling to pursue legal action in Texas because of inconvenience, isn't really helpful.
> And often just filing is enough for them to do the math and just pay out.
Yes, even just hinting at willingness to file a claim probably would have gotten the insurance company to settle in this case. That’s been the whole argument from the beginning.
Okay, I'm confused. My anecdote, which comes from Australia, indicates a 100% expectation of a judge. Are you saying that in Texas, a $US6K matter is likely to be considered too vexatious/trivial to receive a trial?
Or is it actually possible to decline a lawsuit in the USA?
This is an "explain it to me like I'm five years old" moment. I really don't know what you guys are talking about.
His point is that the OP (ie. https://news.ycombinator.com/item?id=29719047) is refusing to sue, so there's no case to bring before a court. Everything else is irrelevant. Even if you'll obviously win, but you don't sue, it's not the state's job to file lawsuits for you.
As I read it, the teller of this story was unwilling to go to court, not even small-claims. If the justice system is not brought into the picture you can't seriously expect anyone to take claims of "you owe me money" seriously.
What do you call someone who victimizes people he know have a disadvantage in suing him?
A for-profit business.
Sure, unequal, wealth-gated practical access to the courts is a real problem, and it impacts basically every area of American society.
But it doesn't make mandatory auto liability insurance a scam, any more than it makes literally every commercial industry a scam.
Looking back, the original post's comment on that point was a final aside that was ambiguous. But my defense is of the charitable interpretation of that remark. Any auto liability insurance system should be written to avoid that kind of gaming.
Seems like it's working as intended? The purpose of auto liability insurance is to... insure the policyholder from liability. If you're not the policyholder, it's not working for you. If you're a policy and you're not experiencing losses stemming from your liability (ie. you crashed your own car), it's not covered. Others in this thread seem to think it's a general purpose mechanism for making all parties involved whole, which is a misunderstanding.
Your comment is like saying “yeah that corporation used a natural pond as a toxic waste dump, so what? Corporations are supposed to make a profit, right?” Yes, they are … subject to other social desiderata like respecting others’ rights.
You seem to be attached to some bizarre strawman that the OP was expecting his own liability to cover the other party’s faults. That was never the argument.
That's not auto insurance that's the underlying legal system, and it's not the feature of the underlying legal system that mandatory liability insurance exists to address.
The intent of mandatory liability insurance is to fix a specific problem: a liable party might not have the resources to pay even a moderate damage claim if found liable. That's what mandatory liability insurance exists to address. That is the whole intent.
If you want to fix the “problem” that people aren't incentivized to proactively pay expected liabilities even when there is a clear indication that the party to whom they would be owed is not willing to pursue them in court, well, you are certainly free to propose a solution, though I don’t expect that there is one that doesn't have more adverse effects than benefits. And, in any case, that's not what mandatory auto liability insurance is designed to address.
This seems to be based on the "making all parties whole" interpretation of insurance, rather than "protect the policyholder". Are you ignoring my prior comment entirely? Are you trying to argue that insurance companies ought to have a "making all parties whole" imperative rather than a "protect the policyholder" imperative? Or perhaps you take issue with insurance companies reneging on their obligations?
It seems like from the rest of your comment that you take issue with the latter, rather than the former. My response to that would be: I agree reneging on obligations in general is bad. However, even you seem to agree that there's some room for dispute, hence why answer was qualified with "obviously at fault". Other commenters have suggested somehow punishing insurance companies in cases where they're "obviously at fault" and refuse to pay up. However, the trouble then becomes, what counts as "obviously at fault"? I have not received a satisfactory answer for that https://news.ycombinator.com/item?id=29720344.
No, you’re ignoring the three comments I’ve made now that clearly indicated I was talking about “the structuring of the insurance system” (rather than the OP’s liability policy), and continuing to argue against something you should be aware I’m not endorsing.
And yes, making victims whole is the purpose of mandating liability coverage for drivers.
Can I ask what you think your comment is adding to the discussion that it didn’t have before?
Yes, agreed, but you aren't a victim until a court issues a judgement that you are, hence the other parties insurance has no reason nor obligation to make you whole.
A dispute is just a dispute until a court rules on it. Statements made by LEOs and witnesses are only examined when it is presented before a court. If you don't present your argument before a court, you are not automatically in the right.
Really it’s just they’re used to someone else doing all the hard work and don’t want to shell out or expend effort for when something doesn’t go smoothly.
Having dealt with contractors and others who decided doing what they were supposed too was clearly too hard (and then making them do it or deal with the consequences), it’s just how life is. Some people will make you make them, because most people are too busy or distracted to do it, and they usually get off Scott free.
It sucks, but it is what it is.
The original comment seemed to be complaining that no one was pushing the button for them, and the other side wasn’t just doing something without them pushing the button.
Well duh.
You have to play the game to get compensated unfortunately. The lawyers and chiropractor know how to do the dance. Most people just get discouraged by the offending insurance compay and take it in the ass. You should be paid for your time talking to lawyers and going to get massages and dealing with all the logistics of repair, inconvenience of the accident etc.
"They can" because you let them... most people don't value their time and do the the same. Great business, insurance.
Another way of looking at it is that you could recover all of the money you have ever paid out for auto insurance in one settlement--zeroing out your contribution to the scam.
Grind them into dust for every last penny you can pry out of their hands because they do the same to you and all of us. Forget the propaganda about "raising everyone else's rates." That's a joke. This is an industry that punishes loyal customers by raising rates every year until you notice. Then they hope you leave. They are very sensitive about people shopping around each year and always talk about discounts for people who were at their last insurance company for x consecutive years. Scam indeed.
Also, this is why auto insurance offers uninsured & underinsured riders (add ons). There’s no guarantee that some jackass who hits your car will have enough insurance or any insurance at all.
Source: was an insurance agent
Here in New Zealand there is a court process that is cheap and fairly efficient for low value claims. This sort of thing would probably sneak into that category.
And the idea is you sue and when they get served they just settle as it’s cheaper.
Shouldn‘t the other driver pay you personally?
And then he‘d have to hash out whether his insurance pays him that money?
If rando-joe you go to the other insurance company...yeah, of course they'll tell you "we investigated our client and found we don't have to pay you" because they're very much hoping you'll say "well shoot then" and go away.
The other option is to have an attorney do it. With multiple witnesses and video footage, it's a slam-dunk case unless the driver's identity can't be established. That means a)an attorney is happy to take it on and b)the other insurance company will likely cave well before anyone even starts talking about court cases.
> Shouldn‘t the other driver pay you personally?
That still means the burden is on OP to sue the other driver since their insurance company was not paid to represent them in this type of case.
You don't need collision coverage to cover collisions that are the fault of other drivers -- just uninsured motorist coverage.
Well, yeah, you didn't legally establish any liability, or even, apparently, make even the suggestion of the intent to do so.
Insurance companies, being for-profit entities, aren't in the business of giving out gifts.
> Now, if I had comprehensive coverage, they'd be facing my insurance company
Yes, dealing with other driver's insurance companies (along with uninsured drivers) is among the more significant reasons to carry more than liability coverage.
> The whole thing is a scam.
I don't see a scam anywhere.
Police reports are evidence that can support a finding of liability, but they are not a legal establishment of liability. There are very good reasons (the due process clause of the 14th Amendment comes to mind) why that should be the case, it's not a scam..
> Throwing ones hands up to say "well, of -course- the company is going to avoid paying anything out unless taken to a court of law" is to abdicate corporations of all responsibility other than profit making.
Untrue. The corporation here has other responsibilities, but they are all to their paying customer.
They have the opposite responsibility, if anything... They have a fiduciary duty to their shareholders, and considering that the behavior being suggested here would see them quickly run out of business by their less-moral competition, it would probably be a breach of that duty.
The solution is to change laws about redress. For example, statutory punitive damages and attorneys' fees in lawsuits against insurers where the final judgement is significantly different from the insurer's initial offer.
Talk about what is ethical is idle because that simply does not drive corporate behavior.
1. I you're supposed to have negotiated with the counterparty in good faith prior to a lawsuit. If not, that will be looked negatively by the judge. https://www.sbwllp.com/rule-68-offers-of-judgment/
2. This probably doesn't play well with probabilities/statistics. Suppose we accept your proposal, and say any final judgement that's 5x larger than the offered settlement should be hit with extra damages. Now a lawsuit comes along that the insurance company thinks there's a 12.5% chance of winning, and if they win, the damages awarded will realistically be $1M. Based on expected value calculated from the previous facts, and factoring in court/attorney's fees, the insurance company offers the plaintiffs $150k to settle. That seems like a good offer for all parties involved. However, if the plaintiff gets greedy, and on the off chance he wins, the insurance company will have to pay extra damages, because from an initial offer to final judgement perspective the disparity is huge.
Regarding Part 2, I actually don't see the problem. If the result is causing insurance companies to be more cautious about lowball offers when there's a range of reasonable outcomes, is that bad? The plaintiff still must succeed at proving damages, so it's not like that outcome is unforseeable.
It does increase "settlement risk" for insurers, but _they're insurers_. Of every kind of entity out there they should be the most comfortable with risk. The greater risk of unfavorable settlements would obviously increase insurance premiums, but if premiums increase because insurers are actually paying more in fair settlements and/or punitive judgements because they failed to pay a fair settlement, again I cannot see the problem.
But the problem is that in the example I given, the lowball option is fair given the probabilities/expected value.
Citation please.
https://www.nolo.com/legal-encyclopedia/fiduciary-responsibi....
My apologies.
Being on the shitty end of the stick, of course the poster sees what is happening. But until a judge or impartial third party with some pull sees it, it might as well not exist. And that’s hard.
They are telling the government they will pay out if the insured party is at fault for an accident, but in some (many?) cases they don't actually pay out. That sounds like a scam to me.
No, they aren't.
They are telling the government and their customer they will pay out if the insured party is found to be legally liable for injury or property damage while driving. (That is, in exactly the situations where the customer would legally be obligated to pay.)
They are also telling their customer that they will defend them from such claims to the extent reasonable, settling where it makes sense to contain liability. That is actually a big part of why one would pay for insurance rather than posting a liability bond (as most states allow) unless you have the funds to keep a general attorney on retainer and seek task-specific representation as needed.
Had they paid out when there was no expectation you would establish liability, that would be a scam against their paying customer.
A police report doesn’t establish proof of fault. Neither does a video. Neither does eye witnesses. All of those are evidence of fault, but not legal proof of fault.
And its not “cheap” to not get comprehensive insurance. Its a calculated risk.
As somewhat of an aside, since I think a lot of people don't realize this: Most of the time attempting to allocate blame in auto accidents is a massive waste of resources and time. Insurance companies usually just settle with each other before even getting to court unless the claim involves big $. Even if you were 0% at fault, your insurance company is still incurring some cost to process the claim. Their assessment of your risk is still going up (as it should). They're still going to up your premium. The whole fault concept is just not helpful to the actual functioning of the industry, most of the time. In some states they just got rid of fault altogether, for exactly this reason.
> And its not “cheap” to not get comprehensive insurance. Its a calculated risk.
Yeah, a risk that in this case, did not pay off. So why is this guy whining all over this thread that he got "scammed" when he knew it was a risk?
Because the "other party is 100% at fault" is actually determined by courts, rather than the cops, hence the need for lawsuit.
I was on coast-to-coast road trip when I got into an accident in TX. Someone was trying to pass me on the left in a turning lane, veered into the incoming lane, and then hit my vehicle's front wheels from the back.
The police ticketed the other driver, and told me that insurance will surely take care of that on my side. "Wow, it's worse than we thought", they said, looking at the footage from the security camera. There were eyewitnesses too.
Now, this was a $6K car (used Fiat 500) that I got specifically for the road trip, intending to resell it in the future. I didn't get comprehensive coverage for it, figuring that if I damage it, welp, it's on me; and if someone else does — that's why we have mandated liability insurance, right?
...I got zero ($0.00, zlich, nada) from the other driver's liability insurance. They informed me that their expertise concluded that the accident was my fault, and, by law, they don't have to abide by the police report.
That's to say, the only way to get any money from them is to sue them, in TX. Figuring that the car is registered in California, and the damage was about $3K, they decided to not pay me anything at all.
Because they can.
Now, if I had comprehensive coverage, they'd be facing my insurance company — because one of those has to pay up. But they're facing me, so I'm welcome to sue or get shafted (with a nice side of gaslighting from the insurance agent, who was very convincing about how I should trust their assessment).
The whole thing is a scam.