AUTO COLLISIONS: FINDING INSURANCE COVERAGE TO MAXIMIZE COMPENSATION

One of the critical duties of legal counsel is to identify all possible sources of insurance coverage for an injured client. If the liability insurance coverage for the tortfeasor (wrongdoer) is adequate to pay for the injuries sustained, then this issue is largely resolved. In cases where liability coverage may be inadequate, however, this issue becomes pivotal. The analysis of available coverage can be technically complex, so claimants desperately need the benefit of capable counsel in serious cases.

Think an insurance company will volunteer that it has liability coverage and a duty to pay for the actions of the wrongdoer? Not likely. Insurers typically refuse to discuss the amount of their coverage obligations unless forced to do so. Georgia statutory law provides a mechanism to force an automobile liability insurer to disclose its policy limits to a claimant within 60 days. Unless the insurer receives such a letter in complete compliance with all the technical requirements of the statute, it will likely decline to disclose its policy limits. Even after a statutory demand, carriers may neglect to disclose umbrella insurance policies or other coverages which could potentialy benefit a claimant. Consequently, claimant's counsel must be continuously on the look-out for additional insurance coverage.

Let's take an example that will segue into discussion of another important coverage feature - uninsured motorist coverage (UM). Suppose Paul Passenger is in a rental car when he suffers two broken legs in a collision where the driver of Paul's vehicle makes a driving error. Paul's medical expenses are $50,000 and he will never walk normally again. We'll assume the total value of his claim to be $500,000. Where to look for coverage? The first place to look is the driver's coverage. Under Georgia law the driver's coverage is primary unless he bought optional insurance from the rental company. Let's assume no optional rental insurance, and the driver has minimum limits required in Georgia of 25 /50 (meaning $25,000 per person/maximum of $50,000 per occurrence.) This means that the maximum to be gotten from the driver's insurance is $25,000, clearly not enough. It may surprise some to learn that the next place to look is the rental company. Georgia statutory law requires renters to provide minimum limits coverage on every vehicle, so there is another $25,000 in excess coverage to be potentially had from them. I say potentially because "stacking" rules in the rental policy may affect the outcome. Let's assume the renter's $25,000 is available too. That's $50,000, still way short - where to look next?

The answer is uninsured (or underinsured) motorist coverage. This is coverage that the passenger can purchase for himself in his own auto policy. Note that he is not required to buy this coverage at all, though it is foolish not to do so. UM coverage is cheap, and the insured can purchase UM with limits as high as his liability coverage. The fact that this coverage is both inexpensive and risky for the insurer sometimes results, in my opinion, in the insurer declining to explain its availability and utility to the insured. Back to our example: suppose Paul has two separate auto policies for his two cars with $250,000 UM coverage for each car. How much coverage is available to him? Paul is under-insured by $450,000, the difference between his claim value and the amount of liability insurance. Looking to his UM, Paul can probably "stack" his two separate auto policies in this situation to generate total UM coverage of $500,000. (The result would be only $250,000 if Paul had one policy covering both cars.) The UM carrier(s) will be exposed to pay $450,000, the amount Paul is under-insured.

Our hypothetical has a happy ending where there is enough total insurance to fully compensate Paul for the claim. In the real world this is often not the case. I have seen many catastrophic claims where the total coverage is only a tiny fraction of the medical expenses incurred. This is why UM is such an important coverage.

There may be other sources of coverage not discussed above in any given case. The lawyer must often exercise creativity and professional expertise in order to find the insurance. If you have a serious injury where coverage is an issue, do yourself a favor and hire counsel.

Copyright 2004 by David L. Turner, all rights reserved.

DISCLAIMER: THIS ARTICLE IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE. FOR ADVICE ABOUT A SPECIFIC MATTER, CONTACT COUNSEL OF YOUR CHOOSING.