Expert: webfoot - 7/6/2006

Question
My daughter tapped the rear of a car (the woman stopped suddenly in front of her). they got out to check for damage and there was none, but my daughter offered to call the police to file a report any way. The other party seemed in a hurry and stated  not to bother. My daughter foolishly gave the woman her name, and they went on their merry way. two weeks later my daughter recieves a letter from an insurance company saying there was 900$ of damage and she needs to pay immediately. She called and left a message with the insurance guy saying she wanted to have an itemized bill and a release saying that if she paid the bill amount, she would not be responsible for any other claims. She did not hear back from him for another 3 weeks. He then asked her if she had insurance and she said yes, but did not give him that info. End of contact with company. No bil, no written claim, no investigator,nothing. Now 4 months later another rep from the same company is calling and threatening a collection agency, and saying that DMV has listed as not having insurance and that they will report her to DMV unless she gives them her insurance info.  And, get this, the other party is now claiming injury. This is all the info mydaughter can get from the other insurance agency. My daughter is a responsible, insured driver with a pristine record,and credit. Are these people trying to scam her? this is a "nationwide" insurance company too!! She is now so worried about her credit, her insurance going up or being cancelled. Can this insurance company do any of what they are threatening to do?  If they contact her insurance company, will they investigate and contact her before they settle any claim?
Thank you

Answer
Given the facts as you have presented them, the other party has no proof of loss other than you're daughter's name and address.  If they were not willing to wait for the police it was likely because they were impaired or their tag was expired, but yet they are trying to take financial advantage of the situation and the fact that they are now claiming "injury" all but confirms such a motive in my book.

Without official proof of the accident, which would be a police report, they may not be able to do anything legally, other than make threats.  The key word is "may".  After all, your daughter did provide her name and address to the other party...

Now.  In the event that you have insurance, it won't likely matter as they could refuse to defend you.  The reason?  You never reported the accident which is required per the terms of the policy that you (or your daughter) signed.  As you didn't report the accident, your insurance company lost their right to investigate the claim during the window of opportunity that they've now lost.  The other insurer would not be subrogating your daughter had they not already paid the claim.  Therefore, your insurer has lost their right to inspect the other vehicle.  If you read some of my prior posts, you will see that this is a very common theme.  This is why all accidents need to be reported immediately.

At this point, you can report the accident to your insurer and risk claim denial or even a failure to renew the policy due to your failure to report the accident.  If you are a very long term customer, they may go ahead and handle the claim for customer service reasons only.

I don't usually do this, but I want you to send me a follow-up and mark it private.  If you'll include your email address I'd like share some other ideas.