Is an insurance company claiming subrogation a CA or OC?

[Lecasbas]

There has been an accident where one vehicle sustained less than $1000 damage. The insurance company of that driver paid the said damages directly to its insured and is now pursuing a claim against the other driver who is thought to have caused that damage.

The insurance company is claiming Subrogation. Here is the Merriam Webster's dictionary definition:

the assumption by a third party (as a second creditor or an insurance company) of another's legal right to collect a debt or damages.

By this definition then, doesn't this make the insurance company a CA during its pursuit of this Bad Debt?

[Lyssarene]

No not a CA. The insurance company can however give it to a CA, which they generally do if you don't respond. They can also suspend your DL if they chose in some states for not making payment.

[bigjohnstud4200]

No not a CA. The insurance company can however give it to a CA, which they generally do if you don't respond. They can also suspend your DL if they chose in some states for not making payment.

If you the party doesn't pay, it will likely go to a CA and possibility to a lawsuit.

[Methuss]

Damages due to neglegence (which is how insurance subrogation is dealt with) are not "debts" as defined in the FDCPA. They are not incurred for personal or household use. It's not that much different from a citation.

Incidentally, you insurance will have a subrogation clause in it whereby you agreed (by obtaining and paying for the policy) to cooperate with and be liable for subrogation issues that may arise.

And as was previously pointed out, not cooperating can result in your policy being declared void and you would then be treated as an uninsured motorist by the State licensing agency.

[Lyssarene]

Wording will be different but your policy contract states in part as follows:

Our right to recover payment

A. If we make a payment under this policy and the person to or for whom payment was made has a right to recover damages from another, we shall be subrogated to that right.

Basically this allows them to recover the money they paid, period. They can also request the deductible paid and any out of pocket expenses made by an insured from the uninsured party although they did not make payment for those damages. That is usually done as a convenience and they will not press the issue is pushed. However, the party who paid the out of pocket expenses (ded etc) can sue in small claims court for the amount they paid.

TX - if it is under $1000, generally they won't sue or suspend your license. That is not a guarantee but.. just general. You can set up payment plans with them.

[Lecasbas]

Original post by:Lyssarene

No not a CA. The insurance company can however give it to a CA, which they generally do if you don't respond. They can also suspend your DL if they chose in some states for not making payment.

Okay... so if it does go to court the insurance company is not bound by the FDCPA. There must be some sort of guidelines they should abide by which is enforceable by law.

Basically this allows them to recover the money they paid, period.

Let's say the total damages were $800 and the insured had a deductable of $300. The insurance company paid $500 to its insured. The insurance company can sue for $500, not $800. Is this correct?

They can also request the deductible paid and any out of pocket expenses made by an insured from the uninsured party although they did not make payment for those damages

.

Then, in this same lawsuit, the insurance company would ask for the deductible and expenses as a separate issue such as interest is usually requested while suing for a Bad Debt?

If this be the case, then the insured is returned its deductible, (assuming the insurance company did pay the insured the damages minus the deductible) and the insurance company keeps the expenses? Or... does the insurance company put all the money in its pocket?

However, the party who paid the out of pocket expenses (ded etc) can sue in small claims court for the amount they paid.

These expenses probably do not include lawyer wages.

TX - if it is under $1000, generally they won't sue or suspend your license. That is not a guarantee but.. just general. You can set up payment plans with them.

Iowa has a $1000 limit also. The state should not honor a request from the insurance company to suspend the other driver's license. The insurance company can still chose whether to pursue its claim regardless of this limit by the state - at least this is my interpretation.

[Lyssarene]

The insurance company generally would not be the one to file suit, it would be from the CA. The insurance company is acting as a business and will make a business decision. They will consider if you have any assets, money, etc. They will look at the amount of damages ($800 I assume) and decide if their costs will reap a benefit or if they just forget it and let the CA continue to try and collect. They also use the same theory in determining to request suspension of license as well. They have to pay a fee to do this, so it is a business decision. If this is your 5th uninsured loss, they may do it to make a point.

If the insurance company actually only incurred $500 ($300 ded), they should be able to only sue for the $500. I am not positive on Iowa law on this. If the ded is recovered, the insured gets that money back from the insurance company. In TX, it is first money to the insured. So in this example if all the insurance company collected was $300, the insured would get it all and the insurance company nothing.

Also note that if you recieved a ticket for no insurance, when you go to court they can order restitution as part of concluding the charges. Not sure how common that is in Iowa, but I have seen it done before in TX.

This is just from my experience --- not legal advice on it. Every insurance case differs by each circumstance, so it is hard to tell.

My best advice if it is you they are coming to, is call and make payment arrangements. Also, purchase liability insurance on your vehicle so it doesn't happen again.

[Lecasbas]

Let me add a little more to the story....

Whether there was actually an accident has not been established.

The driver who did not have any damage believes he may have lost a piece of furniture from his pickup while traveling down the freeway. While stopping to check his load he thought he noticed something was missing and returned back the way he had come to investigate.

Down the road 5 miles or so he saw splinters of wood which may or may not have been his piece of furniture. Witness said that a semi had plowed through the piece of furniture and just kept going. He confronted two officers at the scene and said that this could possibly be his and volunteered to pick up the mess. The officers gladly accepted his offer otherwise, they said, they would have to call the county to come clean it up.

There was not an accident reported so no ticket was issued. The driver of the pickup did volunteer his driver's license. One of the officers did write down that information along with the license number of the vehicle.

Several weeks after the incident the driver of the pickup received a bill from the insurance company, of which we have already discussed.

The driver of the pickup has always had insurance and could have given that information to the other driver's insurance company but he felt that the other driver had waited too long to report the alleged accident and was possibly taking advantage of the situation for a few quick bucks.

They did threaten to take the driver's license but the guy in the pickup knew there was a $1000 clause. They are now on their 2nd CA. The time elapsed since the incident has been over 3 years.

So...now that I have connected a few dots, although good advice, this is not what I am looking for:

Original post by: Lyssarene

My best advice if it is you they are coming to, is call and make payment arrangements. Also, purchase liability insurance on your vehicle so it doesn't happen again.

The guy in the pickup feels that the insured found an easy way to scam $500 from his insurance company with no regards to how it would effect the driver of the pickup.

The insured got his ill-gotten gains years ago and only shows up as an insignificant name with the assailing claim letters.

It has been 2 and 1/2 years since he last received a dunning letter. He believes that because a new CA is involved that the demands for payment will continue and that it's time to do something about it.

They guy in the pickup does not wish to give in to extortion. He is willing to go through the validation and court process. As a matter of fact, he may be willing to file a suit against the insurance company itself if they do not file a claim.

So, what guidelines are the insurance companies required to follow so I can investigate as to whether they have violated any laws? It has already been established that they are not required to adhere to the FDCPA because they are not a CA.

I am keeping in mind that the CA the insurance company has currently given assignment to is under the FDCPA and I will be tallying up the infractions but I'd like to see if I can a throw few jabs at the insurance company itself.

[Lyssarene]

An insurance claim is different than that of a debt owed. They first must establish negligence. 4 elements of legal liability: Duty, breach of duty, damages, proximate cause, and damages

Q: How was the truck carrying the furniture negligent?

- failing to secure the load?

- failing to pick up fallen object or notify oncoming traffic of it?

the truck had a duty to secure the load and breached that duty because it obviously fell off

-- these are questions and possible negligent duties the carrier of the furniture had.

Q: The party who hit the furniture, did they hold negligence?

- failing to maintain proper look out?

- failing to travel at a safe distance to avoid emergency situation?

- failing to stop in a timely manner to avoid accident?

Iowa has a 5 year statute on recovery under Property Damage. But again, they have to prove negligence and that their party is less than 49% negligent. In Iowa you can collect your damages if you are equal to or less than in negligence than the other party.

example : Hauler = 40%

Truck = 60%

the truck would be barred from recovery.

Reverse is Hauler =60%

truck = 40%

the truck that hit the furniture could collect 60% of his damages.

If you were going to defend negligence I would argue the furniture, large piece evidently sitting in roadway not moving - it was there to be seen. Hitting a stationary object and not attempting to avoid by stopping or going around, you can be negligent. Is there a shoulder? multiple lanes? speed limit? day or night? Load was tied down with what? How many straps? No advance knowledge it would not hold? How long had you traveled before this happened? The witness was obviously able to avoid, so how come the semi was not?

I don't believe they have violated any laws. A claim was reported to them. There is a police report with a witness. Their driver states he has damage from hitting a piece of furniture. You lost a piece of furniture and turned up at the scene. I don't think this is a scam of sorts - you admit furniture lost, you saw shreds of it... look at the negligence and see. They have to prove negligence, if you never responded to them then they assumed and have filed it as non negligent on their driver. This is similar to debt validation we request from OC via CRA - except this is not only the bill for damages you want to inspect but also how exactly is the insurance company stating you are negligent?

[Methuss]

Did the pickup truck driver ever receive notice from his own insurance company that a claim had been filed against his policy? If not, then he has no obligation. He had a right to dispute the details of the claim and if denied that right by his own insurance company they breached the agreement.

In all likelihood this will require a lawyer to sort out. If this has damaged his credit rating or caused him to loose other opportunities, he can claim defamation of character and go for punitive damages. Frankly, I think the simpler answer is he was a victim of insurance fraud and his own carrier turned a blind eye to it. Fraud has no time limit to file a claim, so it doesn't matter if the other driver that made the claim did so 3 years ago or 10 years ago. You can still go after them.

[Lyssarene]

Did the pickup truck driver ever receive notice from his own insurance company that a claim had been filed against his policy? If not, then he has no obligation. He had a right to dispute the details of the claim and if denied that right by his own insurance company they breached the agreement.

In all likelihood this will require a lawyer to sort out. If this has damaged his credit rating or caused him to loose other opportunities, he can claim defamation of character and go for punitive damages. Frankly, I think the simpler answer is he was a victim of insurance fraud and his own carrier turned a blind eye to it. Fraud has no time limit to file a claim, so it doesn't matter if the other driver that made the claim did so 3 years ago or 10 years ago. You can still go after them.

It isn't his company coming after him. The adverse company paid their insured and now want their money back. No contract exists between the 2. He did not provide his insurance information, so no claim was presented to his own carrier.

Based on the facts, how is this insurance fraud? The other party sustained damages, they filed a claim with their own carrier and cited who they believed to be negligent, the police wrote a report, there was a witness. No fraud exists at this point. It appears the OP has not disputed this accident with the insurance company who paid the claim, which needs to be done.

[Lecasbas]

Original post by Lyssarene

It isn't his company coming after him. The adverse company paid their insured and now want their money back. No contract exists between the 2. He did not provide his insurance information, so no claim was presented to his own carrier.

This is correct.

I should add that it was not the semi who is the insured. The insured is a suv which claimed to have hit the splinters after the semi busted up the piece of furniture.

That insured did talk to one of the officers at the scene but the officer did not see any damage to the suv and did not write a ticket.

The driver of the pickup will be expecting to hear more from the current CA because it is in their nature to be pest over a little bit of nothing. The insurance company obviously carries the same attitude since they have assigned this debt to a new CA after the lst one wore itself out writing threating letters to no avail.

The driver of the pickup will DV the current CA. One would think $800 would not be worth chasing after especially since the evidence is rather counterproductive. No accident report citing fault, officer at the scene did not find damage to the insured's suv, etc.

Based on the facts, how is this insurance fraud? The other party sustained damages, they filed a claim with their own carrier and cited who they believed to be negligent, the police wrote a report, there was a witness. No fraud exists at this point. It appears the OP has not disputed this accident with the insurance company who paid the claim, which needs to be done.

I suppose the pickup driver could claim faud if there is no proof that the splintered furniture damaged the suv since the officer at the scene reported no visible damage. Ultimately the $800 would come out of the pickup driver's pocket.

The problem may be that the pickup driver did not respoond to the insurance company or the 1st CA and 3 years have passed.

Still, if the current CA choses to file the lawsuit wouldn't this toll any SOL. Wouldn't the CA be reinitiating everything to be heard by the Court? I doubt if the Court would rule in the CA's favor if it heard that the officer at the scene observed no physical damage to the suv and no accident report was filed citing fault regardless of the fact that the pickup driver did not dispute the claim of the insured.

[Lyssarene]

Again -- damages would not be heard until liability has been decided if suit was filed. Liability has to be decided first, if it was found the pickup had no liability, the damage issue would never be heard.