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What Happens When the Other Driver in an Accident Does Not Have Insurance?


Most car accident victims rely on insurance to compensate them for any personal injury they sustain. Tennessee is a “fault-based” state with respect to car accidents, which means the negligent party is expected to pay any damages. Tennessee law further requires all licensed drivers to carry a minimum amount of insurance to cover injuries suffered by other drivers, passengers, or even pedestrians they might hit.

Judge Finds Canceled Policy Not Reinstated by Late Payment

Unfortunately, not all Tennessee residents are responsible when it comes to maintaining up-to-date insurance coverage. This can make it significantly more difficult for accident victims to receive compensation. In some cases, the victims may be compelled to litigate against not only the negligent driver, but also his insurance company.

Here is one example of the type of legal problem an accident victim may face. A woman was seriously injured in a car accident caused by the other driver. The other driver thought he had an active insurance policy to cover the damages. But the insurance company balked at paying the victim, alleging the policy had expired sometime prior to the accident.

Here is what happened: The driver and another man purchased an insurance policy together from an agent. The policy was supposed to run through September 2015 and required monthly premium payments. Apparently, one of the payments failed, so the insurer sent written notice of the policy’s cancellation on July 27, 2015.

One of the two men then went to the insurance agent in early August to seek “reinstatement” of the policy. The agent received a check, ostensibly for the previously unpaid monthly premium, which was cashed. But the insurer neither received nor attempted to collect any further payments after that.

The men assumed their policy was reinstated and in effect on the day of the accident involving the victim. But the insurance company filed a lawsuit in federal court, seeking a declaration it was not liable for the victim’s injuries since, by its account, the policy stayed canceled following the initial non-payment.

A federal judge sided with the insurer. There was no question, the judge said, that the initial cancellation was valid. But the agent had no authority to unilaterally reinstate coverage, as the policy said that could only be done by the insurer. In other words, the men could not rely on the agent accepting their check as proof of reinstatement–and the victim could not rely on the men’s belief they had insurance at the time of the accident. And in any event, even if the original policy had been reinstated, it was set to expire approximately two month before the accident.

Need Help With an Insurance Company Following a Car Accident?

It is common practice after any car accident to exchange insurance information with the other driver. It is critical to verify that the other driver has proper coverage, especially if you have been injured and may have grounds to seek compensation. An experienced Knoxville personal injury lawyer can assist you in dealing with any insurance-related matters. Contact the office of Fox, Farley, Willis & Burnette, Attorneys at Law, to speak with someone right away.



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