Allows your insurance company to settle a claim against you
Your insurance company reserves the right of settlement in any claim or lawsuit against you.
This means that they can settle as they see fit.
Therefore, if you are in an accident that you do not believe was your fault, but your insurance carrier does, they would be able to settle as they believe is best (even if you disagree).
This of course is not in the best interest of the insurance company, and they have an affirmative duty to believe you.
This is controversial because many times insureds believe they are not at fault; however the damages do not support their version of events. (He hit me on my right, but there is only damage to left side).
Often times, insureds do not know the rules of the road and they will argue their non-responsibility based on those rules.
Always check the rules of the road in your state before you give a recorded statement.
It takes a good investigation before the insurance carriers will go against the wishes of their insured (bad faith).
They usually only make this decision if they have independent witnesses or a police report that is clear about their insured responsibility for all damages.
Click below for an explanation insurance coverages and terms:
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