When you file a third-party claim against another person’s insurance policy, or someone files a claim against you, the insurance company has a duty to defend their policyholder. This duty is important to you when another person blames you for their injuries or property damage. They’ll pursue a claim against your policy. The insurer has to open and investigate the claim, and then either affirm or deny your liability.
You want the insurer to defend you against wrongful claims. But you don’t want it to deny a valid claim. If an insurer wrongfully denies a third-party claim or refuses to settle for a fair amount, the other party is likely to file a lawsuit against you personally.
Also, consider this if you have to file a third-party claim after an accident. The insurer will look for reasons to deny liability or to pay as little as possible on your claim. This is part of its duty to defend its policyholder. By working with an experienced attorney, you have someone to fight for you to receive the maximum compensation.
It isn’t in the insurer’s best interest to refuse to negotiate a fair settlement. But if it refuses to settle for an appropriate amount, your attorney will be prepared to take the at-fault party to court.