Why Can’t I Sue the Insurance Company?

Vehicle insurance papers

Most auto negligence claims involve insurance companies. Since most drivers carry insurance, after an auto accident, the insurance company takes over the driver’s seat in trying to resolve the claim.

However, if negotiations fail and a lawsuit must be filed for damages, in Illinois, we sue the other driver who was at fault – not the insurance company. Does the insurance company then disappear from the process? Absolutely not! They stay highly involved.

Why, then, do we not sue the insurance company?

Long Story Short: The Collateral Source Rule

There are plenty of situations whereby a person can sue an insurance carrier directly. One example would be under Section 155 of the Insurance Code, whereby a plaintiff can sue the insurer directly for attorney’s fees, costs, and other damages for failure to resolve a case in “good faith.” However, in Illinois, the original lawsuit for damages still must be initiated against the actual party, not her insurer. Suing the insurance company directly for the auto accident is not permissible in our state.

Why? While the reasons for this are murky, the short answer is that we maintain the legal fiction that the other driver is legally responsible, not the insurer. And to murky the waters even more, not only can the plaintiff not sue the insurance company, but her legal team can’t tell the jury about insurance. At all. In fact, no mention of insurance may be made by anyone at trial. This is called the collateral source rule.

And we won’t even get into how this impacts the presentation of bills paid by insurance at trial. This further confuses jurors, and, in my opinion, prejudices plaintiffs.

This is why things get so confusing and even misleading for jurors at trial. You have the other driver, represented by her insurance company lawyer, paid by her insurance company, but we can’t tell the jury about insurance. The jury sees a driver, a normal person like them, being sued for a lot of money, but they don’t know that the insurance company is the one putting on the lion’s share of the defense so that they (the insurance company) won’t have to pay.

Getting This Straight: An Auto Accident Example

So, let’s follow along for a moment.

Your vehicle gets rear-ended at a stoplight.

You get injured.

Settlement agreements get stymied by the other driver’s insurance carrier.

You sue the other driver (NOT the insurance company!)

The other driver reports this to her carrier and her carrier hires lawyers free of charge to file an appearance and defend the lawsuit.

Eventually, you wind up at trial, where there is no mention made of insurance, by law.

Jurors are left wondering, “why didn’t her insurance carrier settle this?” Or “why is the plaintiff being so greedy and suing her and making her pay?” You the plaintiff may look like the bully, not the other driver’s insurance company.

My position on this is that the entire legal fiction of this unstable pyramid is silly, outmoded, misleading, and prejudicial to the plaintiff.

Will We Ever Have Direct Suits in Illinois?

Maybe someday. The trend is slowly favoring abrogating this outmoded system. A handful of states and territories have enacted statutes that allow for direct suits against the other party’s insurance carrier.

But the insurance industry and defense bar are very powerful with an influence in the legislature. It is highly unlikely such a monumental change to our system in Illinois would occur anytime soon.

If you are as outraged at how silly this is as I am, contact your state representatives and tell them.

Contact Chicago Accident and Personal Injury Lawyer Stephen Hoffman

As in all cases involving injury and potential liability, if you have been in an auto accident or hit by a vehicle get medical treatment, report the crash to police and your own insurance company, and contact a lawyer with expertise in your type of case, such as auto accidents, bicycle accidents, or pedestrians hit by cars.

If you've been in an accident and have questions, contact Chicago personal injury attorney Stephen L. Hoffman for a free consultation at (773) 944-9737. Stephen has nearly 30 years of legal experience and has collected millions of dollars for his clients. He is listed as a SuperLawyer, has a 10.0 rating on Avvo, and is BBB A+ accredited. He is also an Executive Level Member of the Lincoln Square Ravenswood Chamber of Commerce.

Stephen handles personal injury claims on a contingency fee basis, which means you don’t pay anything upfront and he only gets paid if you do. Don’t wait another day, contact Stephen now.