What Happens If I Don’t Tell My Insurance Company I Got Sued?
If you’re ever involved in a car accident that results in a lawsuit, you might think: “Can I just ignore it and hope it goes away?” The truth is, failing to notify your insurance company can have serious and costly consequences. Your car insurance policy is designed not only to cover damages but also to protect your personal assets and provide legal defense, but only if you comply with the terms of your policy. Ignoring a lawsuit can put you at risk of personal financial loss and legal trouble.
1. Your Insurance Company’s Duty to Defend You
Your car insurance policy is a contract between you and your insurer. One of the most important benefits of this contract is the duty to defend you if you are sued. This includes:
Hiring a defense lawyer to represent you in court or negotiations.
Paying legal fees so the plaintiff cannot go after your personal property.
Covering settlements or judgments up to your policy limits, preventing your assets from being seized.
By notifying your insurance company immediately, you ensure that they can take action on your behalf and protect your home, bank accounts, and wages from potential claims.
Example:
If a driver sues you for a car accident, your insurer will hire a lawyer to defend your case. They pay for legal representation and work to settle or litigate the claim within the policy limits, keeping your personal assets safe.
2. The Consequences of Not Notifying Your Insurance Company
If you fail to tell your insurance company about the lawsuit, you are essentially breaking the terms of your insurance contract. This has serious implications:
Your insurer has no obligation to provide a defense.
You are considered non-cooperative, which may void your coverage for that claim.
You risk a default judgment, where the court rules in favor of the plaintiff automatically.
Your personal property, savings, or wages could be garnished or seized to satisfy the judgment.
Example:
You receive a lawsuit notice but ignore it, thinking it will go away. The plaintiff’s attorney can obtain a default judgment, and the sheriff may then place a levy on your home or bank accounts to collect the money. What seemed like an easy way to avoid dealing with insurance can quickly become financially devastating.
3. Why Timely Notification Protects You
Promptly notifying your insurer ensures that they can act on your behalf and maximize your protection:
Your insurance company will hire a defense attorney to represent you.
They will negotiate settlements or fight in court to avoid a large judgment against you.
Proper notification ensures your insurance company fulfills its legal duty under your policy.
Even if your premiums may increase slightly, the alternative—losing your home, bank accounts, or wages—is far worse. Protecting your assets should always take priority over minor premium concerns.
Example:
After an accident, contacting your insurance company immediately ensures they provide legal defense and work to settle or defend the claim. This is exactly what you are paying your insurance for—peace of mind and financial protection.
4. How Cooperation Impacts Your Case
Notifying your insurer is not enough—you must also cooperate with your defense:
Provide all necessary documents and evidence.
Attend required meetings or court dates.
Respond to requests from your insurance company or the defense attorney promptly.
Failure to cooperate can result in denied coverage, leaving you personally responsible for legal costs and damages. Your active participation helps your insurer defend your case effectively and prevents additional complications.
5. The Bottom Line
Ignoring a lawsuit after a car accident can lead to:
No legal defense from your insurance company
Default judgments
Garnishment or seizure of personal property
Unnecessary financial and legal stress
The simple solution: notify your insurance company immediately and cooperate fully. This ensures that the insurer provides a defense lawyer, negotiates or litigates on your behalf, and protects your personal assets. Your insurance policy is meant to cover your defense and financial exposure, so use it as intended.
