Call your insurance company immediately to put your insurer on notice of this situation. The letter from the occupants of the other car is most likely a prelude to a lawsuit. Rising premiums will be the least of your concern if a lawsuit for personal injury damages is filed because you will need an attorney to defend you in court on a case of potential adverse liability.
From what you describe, the claim will most certainly be that your driving was negligent because you were unable to control your car properly under the weather conditions present and rear-ended a car ahead of you in traffic.
Your insurance company policy most likely has a provision that a defense will be provided should you be sued so long as you cooperate with the insurance company regarding claims. Waiting any longer to notify your insurer now that you have this letter with demand to pay may be deemed to be a sign of non cooperation by you with your insurer on this matter.
So, do not delay any longer. Contact your insurer, send them the letter with the repair bill and car rental billls. Tell them your version of the accident and cooperate with them on this claim.
Good luck to you.
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A person has two years from the date of a motor vehicle accident to file suit for a claim of damages. I have seen many of these types of accidents over the last 30 years where weather or road conditions were significant factors in causing the collision. Of course every driver has to adjust his or her driving to the conditions prevailing; but, if both of you were driving carefully and slowly while coming to a stop, then you have a pretty fair chance of being found not negligent, in other words, in my opinion a jury would not find that you were liable more than 50% of the time in Harris or surrounding counties,Texas.
Now to the practical portion of your circumstances - if the total damage to the vehicle was $700.00 plus some car rental expense (I am guessing that the total claim is less than $1,000.00), then there is a better than even chance that the lawyer and his paralegal wife will not go to the trouble of suing you because the damages involved versus the time and effort of writing up a petition; filing it with the court; spending the court costs to file it; spending money to have service of process issued and served upon you; then, maybe spending time to do discovery, e.g., depositions, written interrogatories, request for production; attending docket calls where the case may or may not go to trial; and, finally, spending a day or day and 1/2 trying the lawsuit where the affirmative defense of an "Act of God", e.g., weather conditions, were the cause of the accident and not your negligent driving --- my personal prognostication is that most lawyers, even though they can do the lawsuit themselves and less expensively, would not waste that much time over a maximum verdict of approximately a $1,000.00. I talked myself out of hypothetically suing you just putting together this paragraph!
However, this is just my personal opinion based upon what I have observed over the course of over 30 years of trial work. On the other hand, I have seen a lawyer file a suit; serve the other party; do discovery; go to a 1/2 day mediation (that was unsuccessful); and, go to trial over the $300.00 repair (he claimed it was not repaired) of a fairly inexpensive receiver for his stereo system. I still scratch my head over that one. That lawyer probably invested over $10,000.00 of time over that $300.00 repair. The point of that story is that, yes, they surely can sue you over this small amount. Will they? Only they know.
Regarding your insurance, it is obvious that they have not submitted their repair bills to their insurance company. If they had, then their insurance company would be threatening to sue you for what they had to pay out because of your negligence. I know that you don't want to make a claim against your company, either. You should definitely talk to your insurance agent (the person who sold you the policy) about what making a claim with your insurance company might do to your premiums. It may or may not affect your premiums. If it not going to affect you, you might consider giving the company their claim for damages and explaining to them whatever the true facts are, for example, that this was not your fault; you were being careful and going slow; but, your car unexpectedly hydroplaned. Also, you need to ask your agent if the insurance company may refuse the claim because it has been so long since it occurred. You may have a reporting time limit. If you have waited too long to report the claim under the terms of the policy, the insurance company may try to decline in defending you.
Personally, I feel that you will not be sued; but, I have been wrong before on these types of small claims; and, I will probably be wrong again at some time in the future. There may be a small claims court in your county that allows jurisdiction of this amount of claim to be included. If so, the initial expenses of their filing the suit may be a little lower, but I my feeling is that you still would most likely not be sued.
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