In this guide 7 sections
Send the demand to your own auto insurer today, and pay the sender nothing yourself. If your policy covered that car and driver on the accident date, this claim is your insurer's to handle: it checks fault, pays or negotiates the amount with the other insurer, and defends you if you are sued, up to your policy limits. You pay out of pocket only for a part your insurer refuses to cover or for the amount above your limit.
Why the letter came to you
The other driver's insurer paid its own customer for the crash. That payment gives it subrogation rights: the right to collect the money from the driver it blames. It can pursue the claim itself or hand those rights to a recovery or collection firm, so the letter can come from a company you have never heard of.
A demand mailed to you shows the other insurer is treating you as the payer. That happens when it lacks your policy number, when your insurer denied coverage, or when the bill tops your liability limit.
What your liability coverage does for you
Liability coverage pays for damage you cause to other people's cars and property, and for their medical bills, up to the dollar limits on your declarations page, the first page of your policy. Your insurer has the right to investigate, negotiate and settle the claim, and it defends you in a lawsuit with lawyers it chooses and pays.
The policy also puts duties on you, and two of them decide this situation:
- Prompt notice. Tell the insurer how, when and where the accident happened as soon as you can.
- Every demand goes to the insurer. Send it every demand, notice and claim made against you, and every summons, right away.
Check your policy's duties section for a voluntary-payment clause too. State Farm's car policy, for example, says an insured who voluntarily pays the other side or takes on an obligation to it does so at his or her own cost. A payment plan you sign is that kind of obligation.
Once your insurer accepts the claim, the fight over fault and dollars runs between the two companies. If both insurers signed Arbitration Forums' auto arbitration agreement, a car-damage dispute up to $100,000 goes to its arbitration, and the decision on fault and damages is final and binding. Only the companies are parties; your adjuster argues your side.
A coverage denial switches the path: once your insurer sends you a written denial, the other insurer is free to pursue you directly, outside that arbitration.
What to do today
- Keep the whole letter. Save the envelope, note the date it arrived, and photograph every page.
- Match it to your accident. Check the accident date, place, vehicle, driver, the sender's claim number and the amount. Pull the declarations page in force on that date and note the policy number, listed cars and drivers, and liability limits.
- Report it to your insurer as a claim against you. Call the claims line on your policy or the insurer's website and say: "I received a subrogation demand from [sender] for [amount] for the accident on [date]. Please open a liability claim, or add it to claim [number], and assign an adjuster." Then upload the full letter and note the claim number and the adjuster's name.
- Answer the sender in writing. Give your insurer's name, policy number and claim number, tell the sender to direct the claim there, and dispute the amount. Use the letter below and keep proof of mailing or a copy of the email.
- Check that the sender is real. Find the claims phone number on the other insurer's own website, call, and confirm the firm is collecting for it on this claim. Give no bank account or card number to anyone who calls about it.
- Hold every payment and payment-plan signature until your adjuster tells you in writing who is handling the demand.
Where it splits
If your insurer is slow or silent
Send a second written request to the claims supervisor with your first message and the demand attached. If a week passes with no answer, file a complaint with your state insurance department; the NAIC insurance department finder gets you to yours. In Texas, the Department of Insurance (800-252-3439) sends your complaint to the company, which has 15 days to respond and can ask for a 10-day extension. For a file stuck at one step, use our guide to a delayed car insurance claim.
If your insurer denies coverage
Get the denial in writing, addressed to you, naming the reason and the policy provision, such as a lapsed policy, an excluded driver, late notice or lack of cooperation. Fight a wrong denial with records: for a lapse, follow the steps for a claim denied after a nonpayment cancellation, and file the insurance department complaint the same week.
While the denial stands, the demand is yours to answer. Ask the sender for proof of what its client paid, the repair estimate or total-loss valuation, any salvage credit, and any deductible it added. Then negotiate in writing and pay only against a signed release.
If the demand is above your limit
Your insurer pays up to your liability limit, and the balance is yours. Ask the adjuster in writing whether it will pay the full limit and whether its settlement releases you from the balance. Negotiate any balance in writing, against a signed release.
If you are sued or a judgment is entered
Give the summons and complaint to your insurer the same day, and get written confirmation that it has assigned a defense lawyer before the answer deadline. If coverage is denied, answer the suit by that deadline yourself or through a lawyer.
A judgment left unpaid can cost you your license. In these three states, proof that you were insured is the first way out:
| State | How to stop or lift the suspension | When it starts |
|---|---|---|
| New York | Show DMV your policy was in force and paid the judgment to the required amount, or get a court installment order, file proof of insurance and stay current. | An injury judgment, or a property damage judgment over $1,000, is unpaid 15 days after it becomes final; at the creditor's written request the court reports it, and DMV suspends license and registrations. |
| California | File DMV an affidavit that you were insured at the time and the insurer is liable, with the policy or a certified copy; or pay the judgment and file proof of insurance; or get a court installment order for the uninsured part, file proof of insurance and stay current. | The creditor files DMV form DL 30 once the judgment is unpaid for 30 days. A small claims judgment of $1,000 or less uses form DL 17 after 90 days, for a suspension of up to 90 days. |
| Texas | File proof a liability policy covered the car then, with an affidavit that the insurer is liable, or get a court installment order, file proof of insurance and stay current. | The judgment is unpaid after 60 days; at the creditor's written request the court clerk sends it to DPS, which suspends license and registrations. |
Your leverage
Your strongest tool is the policy: a covered claim within your limit is your insurer's to pay and defend, and your dated written notices prove you did your part. A complaint to your state insurance department puts the company's answer in writing; in Texas, the department can push a company to pay when refusing breaks the policy terms or state law. If a judgment comes, the coverage-proof routes in the table above stop or lift a license suspension.
Federal debt-collection rules cover debts from a consumer deal such as a purchase, loan or service. The federal appeals court for Alabama, Florida and Georgia held in Hawthorne v. Mac Adjustment (1998) that an insurer's subrogation claim for accident damage is not a debt under the Fair Debt Collection Practices Act. If the letter prints a 30-day dispute notice anyway, use it: your written dispute and itemization request go on record either way.
Call a lawyer when you are served with a suit your insurer refuses to defend, when the balance above your limit is more than you can pay, or when a judgment already exists. USA.gov's legal aid finder lists free and low-cost help by state. If the other insurer also wants your account of the crash, use our guide to a recorded statement request.
Letter to the company that sent the demand
Mail or email this to the sender.
Re: Claim [their claim number], accident on [date]
I received your letter dated [date] demanding [amount]. On the accident date I was insured by [insurance company], policy [number]. I have reported your demand to my insurer under claim [number], adjuster [name and phone]. Please send this claim and all further communication about it to my insurer.
I dispute this claim. Please send me an itemized statement of the amount: what your client paid and to whom, the repair estimate or valuation, any salvage credit, any deductible included, and written proof that you are authorized to collect for [insurer named in your letter].
[Your name, mailing address, date]
Today: three moves
- Upload the full demand to your insurer and get a claim number and the adjuster's name.
- Send the letter above to the sender, with a copy to your adjuster.
- In one week, if the adjuster is still silent, send the supervisor request and file the insurance department complaint.
If your insurer accepts coverage, its adjuster takes over with the other insurer, through payment, negotiation or arbitration. From then on, every letter addressed to you goes straight to the adjuster.
Disclaimer: TurnYourClaim is not a law firm and does not provide legal advice. This page provides general educational information only. Laws vary by state and change frequently — always consult a licensed attorney in your state for advice specific to your situation.