Can You Sue the Other Side’s Insurer? California vs. Arizona vs. New Mexico
When an insurer mistreats its own policyholder, that policyholder can sue. The harder question is whether the person the policyholder injured can. In two of these states the answer is no, and in one it is sometimes yes.
| California | Arizona | New Mexico | |
|---|---|---|---|
| Direct claim by an injured third party | No | No | Yes, by statute, in defined circumstances |
| Route that does exist | Assignment and excess judgment | Assignment and excess judgment | Statutory claim, plus assignment |
| Precondition | The insured must have a claim to assign | The insured must have a claim to assign | A judicial determination of fault and damages |
| Common-law third-party claim | No | No | No — the New Mexico route is statutory only |
Why the duty usually runs to the insured, not to you
An insurer's obligations flow from its contract with its own policyholder. In California and Arizona that means an injured claimant has no direct bad-faith claim against the other side's carrier, however badly the claim was handled.
The route that works in all three: excess judgments
If an insurer unreasonably refuses a settlement within policy limits and a judgment then lands above them, its own insured carries that exposure — and has a claim against the carrier for putting them there. That claim can be assigned to the injured person as part of resolving the case, which is how claimants ultimately reach the insurer.
New Mexico’s statutory exception
A third-party claimant who is an intended beneficiary of statutorily mandated insurance has a statutory claim against the insurer — but only after the insured's fault and the claimant's damages have been determined in court. The sequencing matters: the claim does not ripen until the underlying case is decided.
Read the detail for your state
This page compares. These go into what actually applies where you were hurt.
Common questions
The other driver’s insurer has been awful to me. Can I sue them?
In California and Arizona, not directly — their duty runs to their own policyholder. In New Mexico there is a statutory route in defined circumstances, after fault and damages are determined.
What is an excess judgment?
A judgment larger than the policy limits. If the insurer unreasonably refused a within-limits settlement, its insured may have a claim against it for that exposure — and that claim can often be assigned.
Not sure which state’s law applies to you?
It is not always obvious — and it changes the answer. A free, confidential review sorts it out in about two minutes.
More state comparisons
- Can I Sue My Insurer Under a Statute? California vs. Arizona vs. New Mexico
- Which State Caps Your Damages? California vs. Arizona vs. New Mexico
- The Deadline That Ends Most Government Claims
- How Long Do You Have? California vs. Arizona vs. New Mexico
- Dog Bite Law Compared: California, Arizona and New Mexico
General information, not legal advice. Every situation is different, and which state’s law applies is itself a legal question.