Are we liable for the difference btwn what is still owed, and what was awarded by the insurance?

[Soccrluv]

Jurisdiction

Virginia

My wife was in a rear end collision, her fault. Our insurance has totaled out the car she hit (was minor bumper damage, but the car was too old and not worth the fix per the insurance company). The person she hit is now claiming she has no choice but to file a suit against my wife after unsucessfully trying to get us to pay out of pocket, as she doesnt have the $2500 difference between what she owes on the car even after the $4950 the insurance is giving her. As it stands, she claims shes taking us to court to recoup the 2500 she was upside down on her car. Does she have a case? Isnt this what we carry insurance for? The insurance paid her for the damage my wife caused. The fact that this woman is upside down on her payments isn't our fault, correct?

 

[army judge]

She can sue you.
You should defend.
Whatever you do, STOP communicating with her.
She could potentially be your adversary.
Talk to your insurance agent, or customer service line, to see if they will supply you with a lawyer to defend (if you are sued).
Your problem is, she appears to not have been made whole by the insurance you carry.
As to the reason, its because of her debt.
That may be hard to shift her burden to you.
If she sues a judge will hear her story, your defense, and issue a verdict.
Even if she prevails, she'll have to find a way to collect.
The court will give her a fancy piece of legal paper with a right purty seal, but no money.
She'll have to chase your wife, maybe you, to collect her award.
It doesn't work in real life, like it does on Judge Judy and Judge Mathis.

 

[Soccrluv]

Great advice, thank you! I just feel like in my gut, shes trying to just get a new car and is pissed she bought a 2007 model car in 2012 and here we are in 2016 and she still owes $7700. Kicker is shes been a family friend of about 10 yrs. Immediately after the accident, her first comment (and continued to make the same comment repeatedly) was "I want a new car anyway" and later the same day proceeded to say "if you all were anyone else my back would already be hurting!" It all just seems rather shady.

My wife told her that as she has brought legal action up as a means to deal with this, at this time itd be best to stop communication. This woman responded with "you're a HUGE disappointment" my wife has ceased all contact, even removing sed person from social media accounts.

 

[adjusterjack]

The person she hit is now claiming she has no choice but to file a suit against my wife after unsucessfully trying to get us to pay out of pocket, as she doesnt have the $2500 difference between what she owes on the car even after the $4950 the insurance is giving her.

Sounds like she's trying to scare you into paying her. Ignore her. If your wife is served with a summons and complaint, then you address it.

As it stands, she claims shes taking us to court to recoup the 2500 she was upside down on her car. Does she have a case?

No.

Isnt this what we carry insurance for?

Yes.

The insurance paid her for the damage my wife caused. The fact that this woman is upside down on her payments isn't our fault, correct?

Correct.

If she does sue your wife, immediately notify your insurance company, and forward the summons and complaint to the claim rep.

Your insurance company will be obligated to defend her either by appointing an attorney to represent her in general district court (if that's were the suit is filed) or provide legal advice if the suit is filed in small claims court where attorneys are not permitted. As an alternative to the latter the insurance company may appoint an attorney to transfer the case to the general district court where attorneys are permitted to represent litigants.

For the moment I suggest that you notify your claim rep in writing that the threat of a lawsuit has been made just so it's noted in the claim file and there aren't any surprises if it actually happens.