What happens when both drivers in a car accident are insured with the same insurance company?

What do I do after a car accident if the other driver uses the same insurance company as me?

Car Insurance PaperworkBoth drivers in a car accident being insured with the same company is not as uncommon a situation as one might expect.  In Erie, Pennsylvania, there are several large companies which have significant shares of the insurance market.  Hence, it is not that unusual for the same car insurance company to provide insurance coverage to both vehicles in a two-car accident.  How does that change the normal policy processing of the claims?

Auto Insurance carriers are sensitive to the pitfalls in this scenario.  An insurance company contractually owes a fiduciary obligation to protect its insured.  A fiduciary obligation is an extremely high duty of good faith and loyalty and it is one of the highest duties under the law.  This creates difficult conflicts where an insurer insures both parties in an accident.  After all, if the situation is contested, and it takes the position of one insured, it usually damages the interests of the other insured.

In these situations, it is extremely important to document everything.  The insurer will assign separate adjusters to handle the claims of each insured and those files are supposed to be maintained separately from access by the opposing adjuster.  In a disputed accident, the carrier will frequently refer the matter to an independent arbitrator to determine fault.  That is not a perfect system, though, because the arbitrator’s decision will be based upon the evidence submitted.  Keep in mind that while the arbitration can prove helpful, it does not absolutely bind the insured.  Hence, even if an insured is determined to be at fault, he or she could still have rights to sue.  Eventual success may depend upon carefully documenting the situation.

The scenario can be extremely confusing for the typical client.  I had a case a few years back where a client was rear-ended by another vehicle and both vehicles were insured by “A” Insurance.  An adjuster was assigned and contacted the client after her release from a hospital.  He arrived at her house, took a recorded statement and offered her “gas money” to help her with the expenses of treatment.  She signed a “receipt” on a clipboard and when she contacted the adjuster a month later after a week in a hospital to seek additional funds, she was advised she had settled the claim.  After contacting us, we discovered the adjuster had never disclosed he was the “enemy” adjuster for the other driver.  He had tricked her into settling her claim for a pittance.  She had assumed he was her adjuster.  We demanded the release be set aside and that request was refused.  The events precipitated several years of litigation that resulted in a significant recovery for our client, but the situation could have been averted by contacting counsel at a much earlier stage of the controversy.  If you are involved in such a situation, be sure to get a lawyer as soon as possible.

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