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Complaint 3 of 36 in "Claim Denied or Delayed"

Insurance Carrier: American Freedom Insurance Company
State: Illinois

Consumer Complaint:

I was rear-ended by an insured of American Freedom Insurance Company in May 2008. The insured called the company and notified them of the accident. I called the company and received and submitted the information I needed to complete to file the claim. The insurance company will not settle the claim until they receive written accident claim form from insured who seems to be refusing to submit the information now. Insurance company is telling me that there is nothing that they can do and I am not able to have my car fixed even though I followed all of their processes.

Insurance Expert Answer:

You have what is known as a 3rd party claim. American Freedom owes its insured a duty to defend her and pay any claim (up to the policy limit) you collect from her; you are a stranger to that company and technically it owes you NOTHING. However, every insurance company knows that if they don't settle clear at fault claims against their insureds, some of the claimants will go to a lawyer, and the lawyer will recognize that those aches and pains the driver saw the doctor about, or the week the driver couldn't work or go skiing, etc. actually can become a real personal injury lawsuit, which will cost them far more to defend and settle than a simple property damage claim.

Thus American Freedom seeks to contact its insured, but until their insured corroborates the claim they are usually not going to pay -- for all they know their insured could have been in China at the time of the accident. However, sometimes if you submit police and other eyewitness reports they'd take that as corroboration. That leaves you with two options. 1. Sue the driver in small claims court and you can be pretty sue that she will tell her insurance company and then they'll pay (or negotiate). (If she doesn't tell the company then, the judgment you get against her should be more than enough corroboration.) If the damage exceeds the small claims amount, hire a lawyer - a lawyer's merely sending a "lawyer's letter" to the driver and company almost always will get action.

2. IF you had collision coverage, let your own insurance company handle it. They will pay to fix the damage, less the deductible, and go after the other driver's company thru an inter-company mechanism and if it's a rear-ender, they will recover and when they do they will refund all or most of the deductible to you.