Can insurance refuse payment if they can't find the at-fault driver?

by Ken
(Houston, Texas, US)

My attorney's case manager told me that they haven't been able to serve the person that I am suing for a car accident injury case, because she hasn't been located. The case manager said that if this person can not be found that her insurance company has no obligation and no accountability to compensate me in this process.

If we get a default judgement in court, payments of medical bills and legal fees will come from my UM/UIM coverage. My UM/UIM was much lower than the other person's main coverage.

Is this true that the insurance company can refuse payment? How can this be legal if it is true? It would seem to me if this were true, insurance companies would instruct their at-fault insureds to hide until a default judgement was in place. What's going on here? Thanks.

Visitor Question:
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ANSWER for "Can insurance refuse payment if they can't find the at-fault driver?":

Ken (Houston, Texas, US):

An insurance company would never tell one of their insured to "hide" in an effort to escape the legal process, or in any other manner instruct, suggest, direct, or imply to an insured to take action to avoid the legal process. To do so would be a crime. In your case you can be assured the insurance company is not going to commit a crime over a car accident case...or for that matter, any other case.

Unfortunately, the at fault driver's insurance company can refuse to pay your claim. This is especially true if the insurance company hasn't been able to communicate with their insured, or receive his or her cooperation in the investigation of the accident.

Refusing to pay a claim can occur even when an insured cooperates with their insurance company. The company may just not believe their insured was at fault, or may not believe the other driver's (your) demand for compensation is reasonable. Almost all insurance policies have written in the policy that the company can refuse to pay a claim if the insured refuses to cooperate in the investigation of the accident, or fails to report it to them.

Insurance companies don't like to pay out money. They look for any legitimate reason not to. In this case, if their insured has failed to cooperate, the company has no reason to pay out the claim. It is obviously unfair to you, but because you don't have a contractual relationship with the other driver's insurance company, you have no legal standing to force them to pay your claim.

Hopefully the at fault driver will eventually surface. If so, his insurance company may go ahead with your claim, but they also may remain steadfast in their position not to pay the claim.

The above is general information. Laws change frequently, and across jurisdictions. You should get a personalized case evaluation from an attorney licensed in your state. Find a local attorney to give you a free case review here, or call (888) 647-2490.

Best of luck,

Judge Calisi

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