[Buge]

>I don't see a scam anywhere.

They are telling the government they will pay out if the insured party is at fault for an accident, but in some (many?) cases they don't actually pay out. That sounds like a scam to me.

[dragonwriter]

> They are telling the government they will pay out if the insured party is at fault for an accident

No, they aren't.

They are telling the government and their customer they will pay out if the insured party is found to be legally liable for injury or property damage while driving. (That is, in exactly the situations where the customer would legally be obligated to pay.)

They are also telling their customer that they will defend them from such claims to the extent reasonable, settling where it makes sense to contain liability. That is actually a big part of why one would pay for insurance rather than posting a liability bond (as most states allow) unless you have the funds to keep a general attorney on retainer and seek task-specific representation as needed.

Had they paid out when there was no expectation you would establish liability, that would be a scam against their paying customer.

[specialist]

In this case, who is legally liable?

[gruez]

No one. It's up to a court to decide. If you haven't been declared liable/guilty by a court, you're not liable/guilty. It's simple as that.

[jsjohnst]

> They are telling the government they will pay out if the insured party is at fault for an accident

A police report doesn’t establish proof of fault. Neither does a video. Neither does eye witnesses. All of those are evidence of fault, but not legal proof of fault.