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When a lawsuit is filed against an automobile insurance company's insured for damages allegedly suffered by a claimant in an automobile accident with the insured, the insurance company has a duty to defend the insured. A part of the insurance company's duty can be the right to retain an attorney for the insured's defense and to pay that attorney's fee. Because the insurance company selects and pays the defense counsel, questions arise regarding who is the attorney's client and whether the attorney owes a duty to only the insured or to both the insured and the insurance company.

A plaintiff in an automotive products liability action is generally required to prove that a motor vehicle as sold contained a defect in its design, in the way in which it was manufactured or assembled, or in the failure to warn of a risk inherent in its operation that created an unreasonable risk of death, personal injury, or property damage when the vehicle was used for its intended purpose and that the defect caused an accident or similar incident, such as a vehicle fire, that resulted in the loss or damage for which the plaintiff seeks to recover damages. Because proof of the existence of such conditions does not involve passing judgment on the conduct of the manufacturer, but merely on the status of the vehicle as sold, the plaintiff in such a case can ordinarily recover only his or her actual damages, which can include economic losses and damages for non-economic losses based on the jury's determination of the dollar value of the pain and suffering resulting from the accident. Sometimes, though, the manufacturer's conduct in dealing with the alleged vehicle defect becomes an issue in the case, and the plaintiff may then attempt to recover punitive damages in addition to the actual damages suffered.

Automobile accidents can be very messy. In order to determine what led to an accident, an automobile accident reconstruction expert can be employed. The expert will try to determine the most probable reason for the accident. Automobile accident reconstruction experts use information from the accident scene, witnesses, the damaged vehicles, and other sources to make conclusions about how the accident happened and, sometimes, why it happened. The expert can be called to testify at a trial on his or her conclusions in an effort to help the jury.

Among its other duties, an automobile insurance company is required to act in good faith when dealing with an insurance claim. This duty to exercise good faith continues throughout the entire claim process. There is an implied covenant of good faith and fair dealing in every insurance contract.

Under an insurance policy, an insurance company has two principal obligations. One of those obligations is the insurance company's duty to indemnify the insured in the event of a claim within the policy's coverage. The insurance company's duty to indemnify is usually triggered when the insured's legal obligation to pay damages is established either through a court judgment or a settlement. The duty to indemnify depends on facts and not speculation. This makes the duty to indemnify narrower in scope than an insurance company's duty to defend an insured.