Can Getting Insurance the Same Day as an Accident Hurt Your Case?

Motor vehicles are required to be insured so that the victims of car accidents can be compensated for the injuries and damages incurred, though greater compensation may be available by pursuing a car accident case. But can getting insurance the same day as an accident hurt your case? Join us as we explore how timing […]

February 29, 2024

How Car Insurance Works

Car insurance is a contract between a car owner and an insurance company that protects the owner from financial losses because of an auto accident (or other types of incidents depending on the policy). If the owner pays the premiums for a car insurance policy, the insurance company must pay for the losses sustained in accordance with the terms of the policy.

Generally, a car insurance policy will cover a car when it is driven by the owner, other drivers who have been listed on the policy, and anyone the owner permits to drive the car. Nevertheless, individual drivers may be explicitly excluded from a car insurance policy, and policies may have other exclusions that could apply, so you need to be familiar with the terms of your car insurance policy.

Nearly every state in the country requires vehicle owners to have some level of car insurance on their vehicles before they can be driven on the road. Among the states where car insurance is mandatory, vehicles must at least carry liability insurance, which pays for damages for which the driver of the insured vehicle is deemed to be responsible. The core damages covered by liability insurance are:

· Bodily injury – These are the costs associated with the injuries or death of another party caused by a car’s owner or authorized driver.

· Property damage – These are the costs associated with the damages to another vehicle or item of property, such as a mailbox, fence, traffic light, or building.

Insurance policies may offer other types of coverage on top of liability coverage, including:

· Uninsured/underinsured motorist (UM/UIM) coverage – This covers damages to the vehicle or injuries suffered by anyone in the vehicle because of the conduct of an uninsured motorist or an underinsured motorist (one who has insurance but whose coverage is not sufficient for the damages inflicted).

· Medical payment/Personal Injury Protection (PIP) coverage – This covers medical expenses for anyone injured while riding in, entering, or getting out of a car (and sometimes for lost wages and other expenses too).

· Comprehensive coverage – This covers vehicular losses that are caused by something other than a car accident, such as fire, poor weather, glass breakage, vandalism, or theft.

It is important to note that when we say that a car insurance policy covers a loss, that does not necessarily mean that it covers the total cost of that loss. Instead, it covers the loss up to the maximum limits laid out in the policy. The insurance company has no contractual duty to pay anything above that amount, nor does it have to tender the full amount if the damages do not warrant it.

As an example, imagine you break your leg in a car accident in which another driver is at fault and the fracture is so extreme that you have to undergo surgery at a cost of $50,000.00. But when your car accident lawyer goes after the at-fault driver and his insurance company for compensation, you discover that his policy only offers liability coverage up to $25,000.00 per person. Consequently, his insurance carrier will not have to give you more than $25,000.00 for your injuries, leaving you with a $25,000.00 gap that you will have to fill in some other way, such as an underinsured motorist policy.

Each state has its own requirements for the minimum insurance coverage that a vehicle needs before it can be driven. For the purposes of this discussion, we will focus on the State of Indiana, which requires minimum liability insurance limits of $25,000.00 per person and $50,000.00 per incident for bodily injury and $25,000.00 per incident for property damage.

Newly written Indiana car insurance policies need to include uninsured and underinsured motorist coverage as well unless you specifically reject it in writing. If you do not, the UM/UIM minimums for bodily injury are similarly $25,000.00 per person and $50,000.00 per incident along with $25,000.00 for property damage, to be paid by your own insurance company.

While this is the state minimum for Indiana car insurance policies, policies with higher limits can be purchased, and some of them may be quite substantial. This is especially true for large semi-tractor-trailers being used to transport goods commercially, which may carry millions of dollars in insurance coverage. It is crucial to obtain current insurance information for every vehicle in a car accident, as it could impact the value of any case you may have.

Were You Actually Covered at the Time of Your Car Accident?

The insurance policies for the vehicles in a car accident may be sources of economic recovery, depending on the nature of the accident and who is at fault for it. If you were not at fault, you and your passengers could recover from the other vehicle’s liability policy and maybe your own UM/UIM policy. If you were at fault, your liability policy would be the primary means of recovery for property damage and the bodily injuries of the other driver and any passengers, though you might receive compensation for your own injuries if your policy has medical payment coverage.

Regardless of the particulars of your policy, you need to let your car insurance company know about your accident immediately because failure to do so could be a violation of your insurance agreement and justify a rejection of your claim. But were you actually covered at the time of your car accident?

If your premiums were up to date and you had not received a cancellation notice from the carrier, your insurance should apply for the car accident up to the limits enumerated in your policy, assuming that your vehicle was not being used by an excluded driver or for an excluded purpose (such as delivering pizzas when your policy explicitly bars coverage for business activities).

But what if you have not had this car insurance policy for very long? What if you just got your insurance on the same day as your accident?

That is another issue altogether. Whether or not an insurance policy purchased on the same day you had a car accident would be in effect for that accident will depend on the terms of the policy and when exactly the accident took place.

Insurance Will Not Cover Car Accidents Before Purchase

If your car accident occurred before you purchased insurance for your vehicle, your policy of insurance would not cover that accident. Auto insurance only applies to incidents that happen after the policy is effect, and it cannot be utilized retroactively for earlier damages.

If you have no other active policies covering your vehicle, you could be personally liable for any property damage or injuries to others when you are at fault for the car accident, and you would likely receive nothing for your own injuries and property damage either.

Moreover, you could face stiff penalties for operating an uninsured motor vehicle, whether or not you are responsible for the car accident. In the State of Indiana, driving without insurance will result in the suspension of your driver’s license for at least 90 days for your first offense. Furthermore, you will need to pay a $250.00 reinstatement fee and be required to provide proof of future financial responsibility for 180 days (known as an SR-22 certificate). The fees and suspensions would continue to increase with each subsequent offense.

The penalties will be harsher if you lie to the insurance company about your car accident in order to get that accident covered, since it would constitute fraud. Insurance fraud is a criminal offense for which you could face fines and imprisonment.

Under Indiana law, giving false information on an insurance application is a Class A misdemeanor that is punishable by up to $5,000.00 in fines and up to one year in prison. If you are convicted of insurance fraud, you could be fined up to $10,000.00 and imprisoned between six months and 2.5 years for a first offense.

As you can see, not only will purchasing insurance for a prior accident not get you the coverage you want, but it could also create even more problems if you engage in fraud.

Insurance Might Cover Car Accidents on the Date of Purchase

Alternatively, if you get into a car accident on the same day you got insurance but after you purchased the policy, your insurance might cover the accident, though that will depend upon when your policy went into effect.

Most auto insurance companies offer plans that become active the same day that you purchase them. Same-day insurance can even be obtained online or over the phone. When you apply, you will be asked to provide information about yourself and the vehicle you are trying to insure, such as the following:

· Vehicle ownership information

· Driving history, including past tickets and car accidents

· Name, date of birth, and driver’s license of every driver on the policy

· Vehicle make, model, year, and mileage

· Vehicle Identification Number (VIN)

· Address where the vehicle is parked or stored

· Current insurance policy information, including coverage limits and expiration dates

Answer these questions honestly, because an insurer can cancel your car insurance policy if you provide incorrect or incomplete information, which is known as material misrepresentation.

Assuming your information is correct, the insurance company will formulate a quote for your policy. The quote may be influenced by the price tag of the vehicle, the ages and records of the drivers, the geographic location, and the extent of the coverage that you want. If you agree to the quote and pay your premium, your car insurance policy should go into effect once that payment has cleared.

That said, you should definitely confirm the exact date and time that your policy is active before you drive the vehicle. Many policies start at 12:01 a.m. on a set date, and until that time has arrived, your vehicle is not technically insured. Therefore, a car accident that occurs after you have gotten insurance but before that insurance goes into effect would not be covered.

It may be a cliché, but it is always better to be safe than sorry, so never drive your car until you know it is insured, even if you have just purchased same-day insurance.

Could You Recover Compensation If You Are Not Insured?

While you could be covered after getting insurance the same day as your accident, you may not really be covered until a certain date and time has passed. If your car accident occurs before this date and time, your insurance company would not have to pay out anything, and you could be subject to penalties for operating an uninsured vehicle to boot.

While such penalties may be unavoidable, compensation may still be recoverable for your losses provided that the other driver was at fault for the accident. If so, you could retain a car accident attorney to initiate a case against the at-fault driver, the owner of his or her vehicle (if separate from the driver), and any insurance companies with applicable coverage.

Additionally, your car accident lawyer could file a lawsuit in a court that has the power to hear the case at trial and issue a binding judgment on the defendants, though most car accident cases are resolved during settlement negotiations about your losses, which may include:

· Medical bills

· Lost income

· Pain and suffering

· Psychological and emotional trauma

· Diminished quality of life

· Permanent impairment

· Loss of consortium

· Punitive and/or wrongful death accident damages (if applicable)

A capable car accident attorney will strive to get you compensated for the entirety of your damages, though there may be no compensation if you were at fault for the car accident. Under those circumstances, the other driver’s insurance coverage would not apply, and you would have no insurance of your own from which to recover.

In some car accidents, multiple parties may share liability. If both you and the driver were to blame for your accident, you might be able to recover compensation from the other driver’s liability policy, provided that driver is more responsible than you are for the accident. Under Indiana’s comparative fault laws, if you were not more than 50 percent responsible for a car accident, recovery may be permitted, though the amount could be reduced by your percentage of guilt. But if you were more than 50 percent responsible, you may receive nothing.

Hensley’s knowledgeable car accident lawyers can analyze the facts leading up to your collision and determine whether you have grounds for an Indiana car accident case.

What Should You Do After a Car Accident?

To better protect your case, there are steps you should remember to take in the aftermath of a car accident. Once you have moved your vehicle to a safe location, you should:

· Call the police – Dial 911 so that the police will come to the crash site if they are not there yet. The responding officer’s accident report will document how the accident occurred and the exact time it happened, which is crucial to a same-day car insurance claim like yours, so be sure to give a thorough account so that the report will be accurate.

· Exchange driver information – Get the following information from the other driver or drivers:

o Name

o Address

o Phone number

o Email

o Insurance company and policy number

o Driver’s license

o Vehicle make, model, and year

o License plate

If there are witnesses present, they could provide independent confirmation of the accident, so take down their names and contact information too.

· Seek treatment – Delays in medical care could hinder your ability to heal and cast doubt on the causal relationship between the car accident and your injuries, so seek treatment as soon as you can, ideally from paramedics at the scene.

· Take pictures and video – A visual record of the crash site could be useful for establishing liability, so take pictures and video if a smartphone is handy.

· Notify your insurance company – Your auto insurance policy may require you to report all car accidents. Even if it does not, you should contact your insurer right away to take advantage of the benefits your policy may offer, such as reimbursement for medical payments, repairs, towing, and rentals, among others. Your insurance company may want to investigate the accident as well and reach out to the other insurance carriers involved.

· Avoid other insurance companies – Speaking of those other insurance carriers, they may attempt to get in touch with you about the car accident, but anything you say could be recorded and used against your case, so it is best to avoid them if possible.

· Send the Certificate of Coverage to the BMV – When the Indiana Bureau of Motor Vehicles (BMV) receives notification of a car accident in the state, it needs to confirm that every vehicle involved had minimum insurance coverage. To verify your coverage, the BMV will send you a request for a Certificate of Compliance (COC), which must be sent back and processed within 90 days, or your driving privileges will be suspended. When you receive this notice, arrange for your insurance company to submit the COC electronically to the BMV, and be sure to confirm that it has been done.

· Talk to an attorney – An experienced car accident lawyer could answer your questions and educate you about what to expect if you are contemplating a car accident case.

Standing Up for Indiana Car Accident Victims

Whether difficulties emerge from getting insurance the same day as an accident or because an insurance company is refusing to offer fair compensation, a major car accident can be an uphill battle. To help fight that battle, Hoosiers often turn to the accomplished Indiana car accident attorneys at Hensley Legal Group. We have been standing up for Indiana car accident victims for more than 25 years, and we are excited to get justice for you and the ones you love.

If you have been injured in a car accident in Indiana, schedule a free consultation with a dedicated Indiana car accident lawyer at Hensley Legal Group today.