Although there are some exceptions to the rule, normally you don't have the right to sue the insurer at this time. Lay people frequently don't understand this. Your case is against the person who caused your damages. That person's insurance company owes an obligation to him, not to you. They will defend the case, and they will indemnify him (pay you) if he loses. It is not likely that someone is going to file for bankruptcy over a small claims case, but his bankruptcy would not prevent his insurer from paying you in any event. Good luck.
The author of this post is licensed to practice law in the District of Columbia, Maryland, and Virginia. This post is intended as general information only, and is not provided as legal advice in connection with any specific case, and does not create an attorney-client relationship.
An exception to the rule is in Louisiana, which allows for a "Direct Action" against the Insurer, as long as the Insured has not been dismissed and/or released. Also, referencing Louisiana law, if the Insured is declared bankrupt, but s/he had insurance at the time of the accidence, then the Insurer can still be held responsible for the damages.
The author of this post is licensed to practice law in Louisiana and Texas. This post is intended as general information only, and is not provided as legal advice in connection with any specific case, and does not create an attorney-client relationship.
Your claim would be against the other driver, not the insurance company. (Since, no one from the insurance company was driving the car, I presume.) If the other party is, in fact, insured, and you get any type of judgment from the Court, the other party has a right to get the insurance company to pay, but that is between the other driver and his carrier. As to your second concern, I would seriously question why anyone would want to declare bankruptcy over a small claims action. That said, even assuming that the other party is in deep financial straits and simply adds this case to the other lists of creditors, if he has insurance you can get relief from the bankruptcy court to go after the insurance proceeds since that money technically doesn't belong to the bankrupt person so as to be considered part of his "estate."
The other way to go after this is to present alternative evidence to the Ins. Co. as to the value of the car. You may still have to compromise, but you may be better off than taking the time and hassle to proceed with the small claims action.
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You do not have the right in California to pursue the insurer until after you have obtained a judgement against the insured. Once you have an award against the insured the amount of the award for the property damage would be binding upon the insurance company. If they still fail to pay the amount of the judgement there may then be a right of direct action against the carrier.
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