How Insurance Plays A Role In Car Accident Cases
Most drivers take the prudent step of getting auto insurance in the event they are involved in an accident. In the unfortunate event that a car accident does happen, you probably want to know about what your insurance will cover. There is not always a simple answer to this question and may depend on the specific language of your policy. Still, there are certain fundamental concepts with which you should be familiar.
The primary purpose of your auto insurance is to protect you from claims based on car accidents that are caused by negligence. It also may protect you in situations involving car accidents that are caused by reckless driving. However, not every state and insurer cover reckless driving. It does not cover intentional or criminal conduct, and it does not include people who are using a car without authorization, such as in the case of a stolen vehicle.
The best way to protect your rights is to schedule a free consultation with a car accident lawyer. A seasoned attorney can review the facts of your case, answer your questions, and provide sound legal guidance.
Uninsured/Underinsured Motorist Coverage
When you are involved in an accident with an uninsured or underinsured driver, you can resort to the related driver coverage in your policy. Most insurers provide a certain amount of coverage for these situations, and you can buy additional coverage if you choose. Let’s say the other driver has no insurance to cover your injuries or does not have enough insurance. You could then bring a first party claim against your insurer for all or the remainder of your costs and losses. In theory, you could sue the uninsured motorist personally. Still, people who do not buy auto insurance rarely have enough personal assets to satisfy a judgment.
Sometimes a complexity arises regarding underinsured motorist claims. Perhaps your claim is worth $150,000, and the at-fault driver has $50,000 in coverage. You would need to have underinsured coverage with a limit of more than $50,000 to make a claim. You could not just combine $50,000 from the at-fault driver’s coverage with $50,000 from your underinsured coverage. You may want to consider getting a substantial amount of underinsured coverage to protect yourself in the event of catastrophic injuries.
Limits on Coverage
One relatively straightforward point is that you cannot make a claim for more than the limit of your policy. There are no exceptions to the limit, regardless of how severe your injuries may be, and insurers do not have an obligation to go beyond the limits of their policies. You also cannot have more uninsured or underinsured coverage than you have in your standard liability coverage. If you have purchased $100,000 in your liability coverage, for example, you would not be able to buy more than $100,000 in uninsured or underinsured coverage.
Getting Another Driver’s Insurance Information
Drivers involved in an accident are required to stop at the scene and exchange insurance information, among other things. The police may be able to assist you with this process if the other driver is uncooperative, assuming that the police come to the scene. If the driver flees the site in a hit and run or refuses to provide their information, you can take down their license number and notify the police. They likely can identify the vehicle and driver, which will give you information about your insurance options. If they are unable to find the car and driver, you can proceed with an uninsured motorist claim against your insurer.
Covered Drivers and Vehicles
Getting car insurance is usually an easy decision to make. Still, it may not be obvious what your policy covers. In some cases, an insurer may argue that a particular vehicle does not fit within the definition of a plan, or that a specific type of driver is not covered. These disputes can be very technical and hinge on the particular language of the terms.
Drivers covered under a policy will include the named insured, their spouse, and any other relative by blood, marriage, or adoption who is living in the household of the named insured. There are a few exceptions for the spouse of the named insured. For instance, if the spouse no longer lives with the insured, is not named on the policy, or is not driving the vehicle with their permission. Additionally, anyone driving a car named explicitly in the plan is covered, as long as it is with consent. The question of whether an employee is covered when they use an employer’s car for business can become complicated, but this may support a claim under the liability insurance of the company.
Different policies take different positions on permissive use, which is when an insured allows someone not covered under the plan to use their car. Permissive use can be overt or implied. If a policy does allow claims based on permissive use, it might provide a lesser amount of coverage or require a higher deductible. Some plans do not allow these claims, which may affect your decision on whether to let someone borrow your car. The person temporarily using the vehicle may or may not have insurance to cover an accident.
Permissive use coverage usually does not extend to using the car for business purposes or allowing an unlicensed driver to use the vehicle. Disputes also can arise when a policyholder allows someone with minimal driving experience to use the car. The insurer might have required a higher premium if it had known that this driver would be using the vehicle.
Any vehicle named in the policy is covered, as well as any car being driven by the named insured. Moreover, the plan will include any additional vehicle owned by the named insured during the policy period and any vehicle that replaces a designated car. This part of the policy may be subject to some restrictions; for example, that the named insured is to notify the insurer of the additional or replacement vehicle within a specific timeframe. If an insured vehicle is undergoing repairs, or if it is irreparable, the policy will cover a rental or temporary car as a replacement.
Some types of larger vehicles may be covered under the same policy as a standard passenger car, even if they are not explicitly listed. These may include SUVs, pickups, and delivery trucks with specific load capacity. Otherwise, the policy only covers larger vehicles identified explicitly in the plan, and it probably will not cover larger vehicles used for business purposes.
No-Fault Car Insurance
Most car accident cases and related insurance claims are based on establishing the fault of one or more drivers. This can cause delays in getting the compensation that a victim needs, since insurers may fight these claims tenaciously. Some states have instituted a no-fault system of car insurance to make the process more efficient. As it sounds, this means that proving who caused the accident makes no difference. A victim simply files their claim with their own insurance company, which is responsible for compensating them for their injuries. No-fault insurance is sometimes also known as personal injury protection (PIP) insurance.
In some states, including Florida, no-fault is an option that a policyholder can choose when they purchase a policy. At the same time, traditional liability coverage is still available. Also, different states have different rules regarding what types of damages no-fault insurance covers. Almost always included are medical bills and lost income. Property damage may or may not be covered, and non-economic damages like pain and suffering are not.
Disputes Under No-Fault Insurance Systems
Just because your state uses no-fault insurance does not ensure that your claim will be free of conflicts and that you will promptly receive all of the compensation that you want. The insurer still may dispute the amount that you are claiming. They can argue that your injuries are not as extensive as you are alleging or that certain types of medical treatment are not reasonable and necessary. An insurer only needs to cover medical bills that are fair and reasonable, so it may contest a claim for the type of treatment provided if deemed too expensive.
However, most no-fault claims are limited in value. Typically, states that use this system provide accident victims with the option to go outside it for sufficiently major cases. A lawsuit still may arise if a claimant in a no-fault state suffers catastrophic injuries that result in substantial costs.
Passenger Injury Claims Under No-Fault Insurance
In general, a passenger injury claim under the no-fault system proceeds similarly to that of one made by an injured driver. A passenger probably will be covered by the driver’s no-fault or PIP coverage. If the passenger’s injuries meet the state requirements for taking a claim outside the no-fault system, they likely could bring a separate suit against the at-fault driver’s liability insurance. Calculating damages and determining liability in these situations can become complicated, so you may want to talk to a lawyer to make sure that you understand your options.
Even though they are not the policyholder on the no-fault insurance policy, an injured passenger still needs to comply with the requirements. A no-fault insurer could deny a claim if a passenger fails to attend an independent medical examination (IME) or meet other requirements.
Going Outside the No-Fault System
States that use no-fault car insurance, like Florida, do have certain thresholds. These thresholds allow a victim to go outside the no-fault system to bring a claim against the at-fault driver or their insurer. There are generally two main types. One is the cost of medical expenses incurred by the victim. The other, based on the scope of the injuries that they sustained. Some states use a combination of both thresholds.
Serious Injury Thresholds
The state of Florida allows car accident victims to go outside the no-fault system when they have suffered certain types of serious injuries. This exception to the no-fault rule will enable victims to receive compensation for non-economic damages like pain and suffering. Each state defines serious injuries slightly differently and very specifically (except Pennsylvania, which simply uses the phrase “serious injury”). Some common categories of acute injuries include permanent injuries, fractures, disfigurement, disabilities, or the loss or limitation of a body part or function.
In some states, a permanent injury may not need to be severe to meet the serious injury threshold. Additionally, it may not even need to have a significant impact on your work or daily life. A disability similarly may not need to involve a total loss of function to qualify. Meanwhile, a fracture does not necessarily require a bone to be completely broken. A chipped or cracked bone may be enough to qualify.
However, other states require a permanent injury, disability, or fracture to be significant. What this means can be very fact-specific, and the vagueness of the law often gives rise to disputes with insurers over the value of a claim. If you are not sure whether you meet the requirements for going outside the no-fault system, you can still file a claim against the at-fault driver’s insurer. Then, you can address the threshold in your negotiations. You may be able to convince the insurer to offer a settlement without a legal finding that your injuries qualify.
Bad Faith by Insurers
Victims injured in a car accident usually have the right to bring a claim against one or more insurers. It can be a first party claim against the victim’s insurer, such as when an uninsured motorist caused the accident. Or, it can be a third-party claim against the insurer of an at-fault driver. Insurance companies generally need to act in good faith toward anyone claiming against a policy, regardless of whether the claimant is a policyholder. Some states provide that only a policyholder can bring a bad faith claim against an insurer, however.
A state may provide specific laws that govern the actions of insurers, or accident victims can rely on court decisions that support the duty of good faith and fair dealing. Failing to comply with this duty is bad faith, which can help a separate claim for damages against the insurer. These claims tend to be very complicated, so you should retain an attorney rather than handling the case on your own. Typically based on the resolution of the underlying car accident case, bad-faith cases may take a long time to resolve.
Recognizing Bad Faith
An insurance company acts in bad faith when it violates the law or the terms of its insurance policy. It is crucial to be aware that any real ambiguities will be construed in favor of the policyholder because the insurer drafted the plan.
Generally, an insurer must pay out on valid claims within a reasonable time. Or, if denied, it must provide a reason. When a victim sues a policyholder, the insurer is obligated to settle claims on their behalf when appropriate. Furthermore, the insurer is required to defend the policyholder against a lawsuit. Insurance companies are not allowed to swamp a claimant in unnecessary paperwork to discourage them from filing a claim. These are just some potential examples of bad faith, and the range of conduct that it covers will vary from state to state.
Damages for Bad Faith
In many states, a plaintiff bringing an insurance bad-faith claim may be able to recover both compensatory damages and punitive damages. Compensatory damages intend to make up for the victim’s losses resulting from bad faith. In contrast, punitive damages intend to punish the insurer for its wrongful conduct. Awards of punitive damages can be massive, greatly exceeding compensatory damages in either the bad faith claim or the underlying car accident case. However, there are certain constitutional limits on these awards. State laws also may provide for statutory damages, which are also usually a more significant amount than the actual losses suffered by the plaintiff.
Schedule a Free Case Review with a Car Accident Lawyer in West Palm Beach
To discuss your case with a personal injury attorney in West Palm Beach, contact Donaldson & Weston. Our lawyers offer free consultations and accept car accident claims on a contingency fee basis. Call our office at 561-299-3999 or send us a message on our Contact Page to set up a case evaluation.