Can Your Auto Insurance Policy Cover Legal Fees?

Lawsuits are common in car insurance claims. However, you might be thinking whether the legal costs are covered by your insurance agency, or you need to pay them. Here’s a brief overview that will help you understand whether your auto insurance coverage includes legal expenses.

Does Your Auto Insurance Cover Legal Fees?

If you are involved in an accident and sued by the other driver, your auto insurance coverage costs will include your legal fees. In most cases, your insurance carrier will hire a lawyer for you.

However, if you choose to sue the other party, your insurance agency will not offer any financial help. You need to hire a lawyer. If you win the lawsuit, the other party’s insurer will pay your legal costs.

Should You Get a Separate Policy for Legal Expenses?

You don’t need a separate policy in Texas since your carrier will provide liability insurance. Here are the two types of coverage you can expect:

  • Bodily Injury Liability Coverage:It will cover the other party’s medical expenses and lost wages resulting from an accident caused by you.
  • Property Damage Liability Coverage:It will cover the cost of repair or damage you have caused to the other party’s car or property.

What Is ‘Duty to Defend?’

Duty to Defend is a clause that means your insurer will protect you in the event of a lawsuit. However, it comes with a few exceptions:

  • You need to notify your insurance company about the accident within 5 to 10 days. Otherwise, they won’t cover the legal cost.
  • If you have intentionally caused an accident, your insurer may refuse to provide both legal and vehicle damage costs.
  • If the accident causes damages that meet or exceed your policy limits, the insurer is not required to pay your legal fees.

Read the fine print and review your policy exclusions to learn whether your auto insurance covers legal fees in the event of a lawsuit. For assistance with your auto insurance coverage, contact the experts at Mike Leonard Insurance. We can connect you with our top carriers, including Kemper, MetLife, Nationwide, Travelers, Safeco Insurance, Progressive, and American Strategic Insurance, to find the right insurance policy.