Insurance Company Trying To Recover Payments

Here is a story all attorneys need to know and be able to tell their clients about.
The story is from The Southeast Texas Legal Journal. The title of the story is “Insurance Company Seeking Reimbursement For Money Paid Following Collision.”
The article tells us that an insurance company has filed suit against a Beaumont woman after it doled out more than $6,000 to one of its clients following a collision.
Progressive County Mutual Insurance Co. claims it paid Patricia Espinoza $6,285.51 after she was involved in a collision on May 18, 2011.
Defendant Keneisha L. Moore had caused the collision after she failed to keep a proper lookout, failed to control her speed and failed to yield the right-of-way, according to the complaint filed May 23 in Jefferson County District Court.
Now, Progressive wants Moore to reimburse it for the money it paid to Espinoza.
In addition to the money it claims it is owed, Progressive is seeking pre- and post-judgment interest, costs and other relief the court deems just.
Patrick Clerkin of Javitch, Block and Rathbone in Richardson will be representing it.
The case has been assigned to Judge Donald Floyd, 172nd District Court. Case No. E194-372.
What is important to know and understand about this story is that insurance companies are getting aggressive about recovering monies paid out on claims where their insured is not at fault. Many of the cases are where coverage is paid under the collision portion of the insured’s policy.
A typical situation would be similar to this – Insured driver is stopped at a red light – other driver runs into rear of insured driver causing damage – other driver does not have insurance coverage – insured driver gets his own insurance company to pay through the “collision” portion of his insurance policy. Instead of the “collision” portion of the policy, the claim could be made from the “uninsured motorist” portion of the policy if the insured driver carries that coverage.
After the insured drivers’ insurance pays for the damages to the insured drivers vehicle, they then pursue a claim against the other driver for the amount of money they paid on the claim. The issue or question becomes, is this a financially smart thing to do. After all, if the other driver could not afford to have insurance, they are probably someone who the insurance company will not be able to collect money from. But here is the kicker.
When a driver in Texas does not have liability coverage to pay for the situation described above, the driver is in violation of the Texas Motor Vehicle Financial Responsibility Laws. So, if they do not have insurance and they have a wreck where in they are found to be at fault and where the damage exceeds $1,000, they can have their drivers license suspended until they have either paid the amount of worked out a payment plan to pay the amount.
This is a big incentive for the at fault driver and results in money being recovered from that driver.
This is why insurance companies will sue to collect money they paid on a claim and why it is sometimes worth doing so.