Legal Question in Insurance Law in California

Re: Do I have to pay?

Based on the facts, yes. Your insurance company wrote you a check to make you whole. They did so because you had uninsured motorist coverage, and it looked like the other individual was at fault. You have no right to get paid twice. It doesn't matter whether its unsolicited or not. Once your insurance company paid you under their contractual obligation with you, they had the right to go after the other person to be reimbursed. The fact that the money came from the other insurance company is irrelevant. Remember, if the other side was insured in the first place, your insurance company would either have never paid you, or if there were repairs, done the repairs and gotten reimbursed from the other insurance company. The causes of action are conversion and money had and received. That second check(or the monies it represented) belonged to the insurance company.

Re: Do I have to pay?

I agree with Mr. Richardson's answer. I also urge you to read your plicy carefully -- it probably says that you must turn over to the insurer any funds you receive on a claim it has already paid.

They are probably claiming fraud because they believe you intentionally induced them to pay when you knew the other side had insurance. This is not what happened, but your insistence on keeping money which is not yours won't help to persuade them.

You should consult with a lawyer who can intervene on your behalf and get this settled reasonably, before you spend a fortune defending yourself and paying the eventual judgment.

Re: Do I have to pay?

Maybe not. There is a rule in insurance law that the insured is entitled to be made whole first, before the insurer which has paid gets any money back from the responsible party. This can be changed if your policy language specifically entitled your insurer to get the "first" recoveries, but generally, policies do not so provide.

If you had uncompensated losses, including the reasonable rental value for your loss of use of the vehicle between the accident date and the date your insurer paid, or when the vehicle could have been repaired, you are entitled to the recovery from the defendant's insurer.

And, since you are in California, check the paperwork you received from your insurer to see if it complied with the Unfair Claims Settlement Practices Regulations. (See e.g., Secs. 2695.7 and 8.)

Finally, your own insurer had a duty to properly investigate the loss. That might include investigating the liability - and insurance coverage - of the defendant.

You oufhr to speak to a lawyer about this, since someone must write the collection agency and dispute you owe anything if your facts warrant it.

Re: Do I have to pay?

Maybe not. There is a rule in insurance law that the insured is entitled to be made whole first, before the insurer which has paid gets any money back from the responsible party. This can be changed if your policy language specifically entitled your insurer to get the "first" recoveries, but generally, policies do not so provide.

If you had uncompensated losses, including the reasonable rental value for your loss of use of the vehicle between the accident date and the date your insurer paid, or when the vehicle could have been repaired, you are entitled to the recovery from the defendant's insurer.

And, since you are in California, check the paperwork you received from your insurer to see if it complied with the Unfair Claims Settlement Practices Regulations. (See e.g., Secs. 2695.7 and 8.)

Finally, your own insurer had a duty to properly investigate the loss. That might include investigating the liability - and insurance coverage - of the defendant.

You ought to speak to a lawyer about this, since someone must write the collection agency and dispute you owe anything if your facts warrant it. If the collection agency continues demanding payment, write and demand a complete copy of all writings the insurer has to support its claim.