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Can I Instruct My Insurance Company Not to Settle Following an Accident?
March 20, 2020
You may ask... however an insurance company completely assumes the risk of loss and the decision to settle.
As an insured you can request your insurance company not to settle a lawsuit. However, an insured cannot “instruct” their insurance company not to settle.
Auto liability policies transfer the responsibility and authority for defending the insured in the manner the insurance company determines.
A copy of a standard ISO auto insurance contract is posted below which provides insight on how the authority of defending and settling liability losses is transferred to the insurance company.:
On one hand, it makes sense. An insurance company assumes the risk of loss on behalf of the insured, and therefore should be able to determine if and how damages will be settled.
On the other hand, insurance companies will occasionally seek to “settle” a claim that may be short on evidence or challenging to defend. There are also circumstances in which insurance companies balance the cost to defend versus the cost to compensate a plaintiff who may be marginally entitled to compensation.
It is your prerogative to open a discussion with the liability adjuster or attorney regarding the merits of a claim. In practice, the best an insured should provide as much information as possible which supports their case. In the end, the insurance company will make the final determination. Sometimes that determination is not so much a matter of who is liable, but what is practical to defend.
Have additional questions about your insurance? We LOVE to help! Please feel welcome to call us at (607) 324-7500.
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Part 7 – Designing a Value-Driven Insurance Plan
Part 6 – Advice, Advocacy, and Answers
Part 5 – Can Your Company Deliver?
Part 4 – Custom Coverage = Real Protection
Part 3: Coverage Limits - "The Ceiling You Don't Want to Collapse"
Part 2 – The Risks of Chasing Cheap
Part 1: What Are You Really Paying For?
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