My Liability may increase the coverage limit

Submitted by pramitsg on Thu, 02/05/2009 - 22:31

Hello,

I was in an accident few days back. This happened in Las Vegas. It happened in an intersection. There was a STOP sign on my way and I stopped on it. The intersecting road do not have Stop sign. I saw the roads were clear and started to pull up. Suddenly a car came and hit me on the rear passenger side just on top of rear tire. After the crash that car didnot even steped on her brake rather she steped on gas and hit a fence nearby and broke it. The cop gave me a citation and put me at fault for right off way. The lady that was driving the other car is 85 years old and was taken to hospital (ICU) where she stayed for 2 weeks. My current insurance liability limit is $50000 but my insurance is saying that the liability may exceed $50000 because of the ICU bill, fence bill (property damage will come on me as I am at fault) and the lady's car damage. My insurance is saying that it is clear from the accident that she was speeding and she didn't steped on the brake because there was no skid mark on the road (this is as per police report), also she hit me in rear side that means I almost covered 80% of the intersection. My insurance is saying that the chances of liability coming up on me is less, because the lady has Under insurance coverage on her insurance and also medicare will come into picture because she is 85. She has also hired a attorney to take care of her claims. Please let me know what are the chances that the liability may come on me (or if it will come on me)? Also am I at 100% at fault in this accident? I am bit worried if the liability come on me because I am not in a position of pay off this bill.

Posted: 06 Feb 2009 01:19 Post Subject:

First, you have separate bodily injury and property damage coverage. That is, your policy may reads as follows: 50/100/50. The first 50 means $50,000 coverage for each injured person in an accident. The 100 means $100,000 max injury coverage in each accident and the last 50 is a separate $50,000 coverage for property damage in an accident.

The $50,000 in PD coverage will apply to the other person's vehicle damage and any other PD caused in the accident.

This leave $50,000 to address the other person's injuries. I have little doubt that her claim is going to exceed well exceed your policy limits. So even if your carrier agrees that you were, lets say, 80% at fault, the amount of the other person's demand is still going to exceed the $50,000. So I think amount of liability is a moot point. No matter what is paid by your carrier they are going to require a release from the other party. That is, they won't pay a dime toward her injury without a signed release stating that she cannot pursue your for anything else. As she has UIMBI, if your policy limits are offered, the attorney will accept is without blinking and have the release liability auto accident form signed. There is no reason not to accept the policy limits and then go after the UIMBI coverage. What the UIMBI carrier (her carrier) will do is run an assets check on you, see that you have nothing to offer and then allow their insured to settle for your BI limits. You don't have a few extra homes throughout the country, right? No million dollar bank accounts?

Posted: 06 Feb 2009 08:51 Post Subject:

Your insurance company has said that the claim amount might exceed the coverage limit, so they have deemed you at-fault. But, IMO, you can't be blamed 100% for causing the wreck. Its evident from your description that the other driver too was careless at driving and was speeding at the same-time. You definitely have violated the traffic rule, but the other driver could have avoided the accident by driving carefully. Lemme tell ya that the police report isn't the absolute document in determining the fault, rather, the responsibility rests upon the claim adjuster. Also, the no-fault rules would come into the picture while determining the claim value.

Posted: 06 Feb 2009 09:04 Post Subject:

Well, the state minimum liability requirement in the state of Nevada is 15/30/10, i.e. $15,000 is available for an injured under the BI limit of the policy. So, tcope, the OP might be suggesting the combined limit of his policy and it might not be $50,000 for each injured person.

Posted: 06 Feb 2009 04:14 Post Subject: Thank you

Thank you all for your quick response. That was really helpful. I checked my coverage and it is indeed 50/100/50. And NO.. I do not have a million dollar in my bank account and I do not own a single home in the country.
Anyways thatnks for your response.. I will update you on how the claim goes.

Posted: 07 Feb 2009 04:21 Post Subject:

Hi Tcope,

I read your post to this matter and would like to learn something for reference.

you mentioned

What the UIMBI carrier (her carrier) will do is run an assets check on you, see that you have nothing to offer and then allow their insured to settle for your BI limits. You don't have a few extra homes throughout the country, right? No million dollar bank accounts?



Do you mean that if in this case the at fault driver does own a home and a million dollars in bank accounts, the other carrier will not allow their insured to settle for the at fault driver's BI limits? if so, what will the other carrier do? will they sue the at fault driver and try to get the at fault driver's home and money in the bank?

hope you don't mind to educate me on this matter.

Posted: 07 Feb 2009 04:58 Post Subject:

Do you mean that if in this case the at fault driver does own a home and a million dollars in bank accounts, the other carrier will not allow their insured to settle for the at fault driver's BI limits?

Most likely they would not.

if so, what will the other carrier do? will they sue the at fault driver and try to get the at fault driver's home and money in the bank?

Exactly. If the UIMBI carrier pay out under their policy they assume their insured's right of recovery against the at fault party. Now I can't speak for more then a few states but usually this requires the UIMBI carrier to front the BI policy limits to their insured. This preserves the UIMBI carriers right of recovery and does not penalize their insured. But no UIMBI carrier is going to pay the BI limits unless they know 100% that they will be able to collect more then just the BI limits. Keep in mind that the BI carrier is still not going to pay a dime out of court unless the UIMBI carrier signs a waiver, limited their collection to the BI limits. So the UIMBI carrier would need to file suit against the at fault party. This is going to cost a _lot_ of money as the BI carrier is then going to pay for an attorney to defend their insured. So the only time the UIMBI carrier is going to do all this is if they see a whole lot of easy money to get. This does not mean a few bucks in a bank account... it means a WHOLE lot of easy money (extra houses that are lien free, a few hundred thousand in the bank, etc.).

Posted: 07 Feb 2009 08:44 Post Subject:

Hi Tcope,

Thanks a lot for your explainations.

Now I can't speak for more then a few states but usually this requires the UIMBI carrier to front the BI policy limits to their insured.



I don't quite understand this part, I thought the not at fault party gets BI limits from the at fault party's carrier?

But no UIMBI carrier is going to pay the BI limits unless they know 100% that they will be able to collect more then just the BI limits.



isn't the at fault party's carrier going to pay out the BI limits to the other party? hope you don't mind to help me out here?

Keep in mind that the BI carrier is still not going to pay a dime out of court unless the UIMBI carrier signs a waiver, limited their collection to the BI limits. So the UIMBI carrier would need to file suit against the at fault party.


since the BI carrier will require the UIMBI carrier to sign a waiver, will the BI carrier also ask the UIMBI carrier to sign a waiver indicating that the UIMBI carrier cannot file suit against the at fault party?

When you mentioned some easy money, i.e. extra houses that are lien free, if one only has a main home that is lien free, will the excess judgement also take away a person's main home?

I am in the state of california, where everyone sues everyone, do you have any suggestions as to a proper liability coverage? I thought 50/100/50 was enough, but from this case, this seems to be too low?

Will an umbrella coverage suffice the chances of an excess judgement?

Thanks for sharing your expertise. :D

Posted: 07 Feb 2009 05:02 Post Subject:

I don't quite understand this part, I thought the not at fault party gets BI limits from the at fault party's carrier

Yeah, it's confusing. The injured person makes a BI claim against the at fault parties carrier. The carrier offers the BI limits. The injured person cannot accept it until the UIMBI carrier gives their okay (it's written into the injured person's policy as to protect the UIMBI carriers right of recovery for anything paid under UIMBI). The BI carrier can't make a payment until the injured party signs a release. If the UIMBI carrier won't let that release be signed (because they want to pursue recovery for anything that they pay under UIMBI) then the injured person is getting screwed by the UIMBI carrier. So usually there is some type of law that states the UIMBI carrier either needs to pay the BI policy limits in order to keep their right of recovery or they have to waive their right of recovery against the at fault party so that the injured person can sign the release and collect the BI payment.

See... that was easy! :lol:

since the BI carrier will require the UIMBI carrier to sign a waiver, will the BI carrier also ask the UIMBI carrier to sign a waiver indicating that the UIMBI carrier cannot file suit against the at fault party?

The BI carrier is not going to require a release from the UIMBI carrier, they are going to require is from the injured person. The UIMBI carrier inherits _the injured_ person's right of recovery. So if the BI carrier gets a release from the injured person, the UIMBI carrier cannot collect anything from the at fault party (i.e. the at fault parties carrier). Remember, the at fault carrier is making a payment when their insured is legally liable for an injury. If their insured is no longer legally liable, then the don't need to pay anything.

When you mentioned some easy money, i.e. extra houses that are lien free, if one only has a main home that is lien free, will the excess judgement also take away a person's main home?

Doubt it. I don't know of any state that would allow a primary home to be taken away. An insurance company is not going to place a lien on it and wait 30 years. It's easier/financially better for them to just absorb the payment into their premium pool. The insurance company collects UIMBI premiums to address the payments they make under that coverage. They are not going to go after everyone tooth and nail to collect a few bucks 30 years later.

I am in the state of california, where everyone sues everyone, do you have any suggestions as to a proper liability coverage? I thought 50/100/50 was enough, but from this case, this seems to be too low?

You live in Calif.? Heck, I'm going to sue because you posted on this site! :lol: I can't recommend limits as I don't know your financial situation. That is why you have an agent (I'm hoping a good one). If you live paycheck to paycheck and rent a place to live, I'd say 50/100/50 would be just fine. I don't recall the minimum in Cailf.. but if you said you had something like 10/20/10, I'd automatically recommend it be increased.

Will an umbrella coverage suffice the chances of an excess judgement?

I doubt you could get an umbrella policy without having much higher limits. That is, it would make no sense as you could more cheaply add coverage to your existing policy. Umbrella policies are for people who have millions to loose. Also, having too much coverage also means that someone can just collect more from your policy... it does not always mean you are better protected.

(todd for some reason your quotes didn't work correctly i fixed same, for easier reading--lori)

Posted: 10 Feb 2009 12:05 Post Subject:

Goodmoring tcope,

Thank you so much for your detailed explanation, I am almost clear, but some parts are still difficult to understand, hope you don't mind to continue to educate me.

You mentioned that

So usually there is some type of law that states the UIMBI carrier either needs to pay the BI policy limits in order to keep their right of recovery or they have to waive their right of recovery against the at fault party so that the injured person can sign the release and collect the BI payment.



But if the UIMBI carrier let the injured person sign the release and collect the BI payment from the at fault party's carrier, then the UIMBI carrier don't even need to pay out the BI limits upfront in order to keep their right of recovery, because they have nothing they need to recover, am I right? And also a UIMBI does have a limit, right? So the injured person cannot ask for any UIMBI amount they want, and also if the UIMBI carrier pay out the BI limits upfront, shouldn't they be asking the at fault party's carrier for the recovery not the at fault person himself?

Also, having too much coverage also means that someone can just collect more from your policy... it does not always mean you are better protected.



but if you are protected by your umbrella policy, then you will not get sued, could you let me know why it does not always mean you are better protected? :oops:

and from your first post on this case

As she has UIMBI, if your policy limits are offered, the attorney will accept is without blinking and have the release signed. There is no reason not to accept the policy limits and then go after the UIMBI coverage.



can the attorney have the release signed without the okay from the UIMBI carrier?

You live in Calif.? Heck, I'm going to sue because you posted on this site!


oh no............................... :cry: :cry: :lol: :lol:

Thank you professor tcope :wink:

Posted: 10 Feb 2009 03:35 Post Subject:

But if the UIMBI carrier let the injured person sign the release and collect the BI payment from the at fault party's carrier, then the UIMBI carrier don't even need to pay out the BI limits upfront in order to keep their right of recovery, because they have nothing they need to recover, am I right? And also a UIMBI does have a limit, right? So the injured person cannot ask for any UIMBI amount they want, and also if the UIMBI carrier pay out the BI limits upfront, shouldn't they be asking the at fault party's carrier for the recovery not the at fault person himself?

Correct... if the UIMBI carrier allows the injured person to collect he BI limits, then the UIMBI carrier only needs to address the difference between the BI limits an what the injured person should be paid. It's still up to the injured person and the UIMBI carrier to come to an agreement as to what the claim is worth. At this point the UIMBI carrier is exactly like the BI carrier was.

If the UIMBI carrier were to pay the BI limits in order to pursue the at-fault party (which I've never seen happen) then the BI carrier would be offering their policy limits to the UIMBI carrier in return for a release. The UIMBI carrier would obviously refuse it and pursue legal action against the at-fault party because the whole reason they reserved the right of recovery is that they felt they could get more money directly from the at-fault party. The BI carrier would provide a defense for their insured. The defense coverage is separate from the BI limit and unlimited.

but if you are protected by your umbrella policy, then you will not get sued, could you let me know why it does not always mean you are better protected?

If I hit you have have $50k in coverage, you or your attorney are probably going to settle for my $50k limit or less as what are you going to get from me directly? Nothing... I don't have anything. If I have $100k in coverage, you are going to settle for my $100k or less. Again, same reason. Now there is such a thing as _too little_ coverage. That is, something unreasonable and limits that are much less then I personally have to offer. If you had $100k in medical bills, no UIMBI and I only had $10k in coverage then perhaps a lien against my $500k house or garnishment on my wages would look a whole lot better then my $10k in coverage. But if I make $7/hour and rent an apartment then having $1 million in coverage is not going to protect me any better then $100k in coverage... it's just going to cost me a lot more in premium.

can the attorney have the release signed without the okay from the UIMBI carrier?

If the UIMBI carrier can show that they would have preserved their right of recovery then they could deny the UIMBI claim. Again, I've never seen a UIMBI carrier preserve their right of recovery.

Posted: 11 Feb 2009 01:18 Post Subject:

Goodmorning tcope,

Greatly appreciate for sharing your knowledge............. :D

The BI carrier would provide a defense for their insured. The defense coverage is separate from the BI limit and unlimited.



does the insured need to pay a premium for the legal defense coverage or is is automatically included in your auto policy? and does all insured get unlimited defense coverage? or the defense coverage differs by how low or how high your BI coverage is?

If the UIMBI carrier can show that they would have preserved their right of recovery then they could deny the UIMBI claim. Again, I've never seen a UIMBI carrier preserve their right of recovery.


sorry, I am a little confused here, so an attorney can have the release signed without the okay from the UIMBI carrier? I got confused with your prior post mentioning that

The injured person cannot accept it until the UIMBI carrier gives their okay (it's written into the injured person's policy as to protect the UIMBI carriers right of recovery for anything paid under UIMBI).



When I quoted for a full coverage for auto insurance, Uninsured Motorist is always a coverage option in the policy, but I seldom see Underinsured motorist coverages, in your many years of experience, does more people have uninsured motorist than underinsured motorist coverage? is it because of the concern of premium?

Thanks a lot :D

Posted: 11 Feb 2009 05:45 Post Subject:

does the insured need to pay a premium for the legal defense coverage or is is automatically included in your auto policy? and does all insured get unlimited defense coverage?

Defense is provided by the carrier and part of the policy. No additional premium is charged. Technically, there is no dollar limit on defense costs.

sorry, I am a little confused here, so an attorney can have the release signed without the okay from the UIMBI carrier?

The injured person can sign if they want... an insurance company can't physically stop it from happening. The UIMBI policy states that the insured cannot sign without their concent but the insurance company would then need to show that they would have pursued the at fault party. As if they would not have, signing or not signing a release would have not made a different... the outcome would have been the same. That is, the UIMBI carrier cannot deny coverage just because the release was signed without their permission. The UIMBI carrier needs to also show that they were harmed by that action. Otherwise, signing the release changed nothing... the carrier would have allowed it anyway.

Uninsured Motorist is always a coverage option in the policy, but I seldom see Underinsured motorist coverages

I've never seen one without the other. That is, it's refered to as UMBI coverage but UIMBI is included.

Posted: 12 Feb 2009 01:50 Post Subject:

I've never seen one without the other. That is, it's refered to as UMBI coverage but UIMBI is included.

Todd in my state UM(bi) is required, UIM is not, and very few carry UIM (including me) it's a separate coverage, with a separate premium.

Posted: 12 Feb 2009 10:18 Post Subject:

goodmorning tcope, me fenny again with some more questions, hope you don't mind. and also thank you for Lori's input. :lol:

Technically, there is no dollar limit on defense costs.


so an insured with low coverage policy and an insured with a high coverage policy gets the same free defense with no dollar limits, am I right?

The injured person cannot accept it until the UIMBI carrier gives their okay (it's written into the injured person's policy as to protect the UIMBI carriers right of recovery for anything paid under UIMBI).



so even the above statement is written into the injured person's policy, the
attorney can still have the release signed without the okay from the UIMBI carrier, and this action is not illegal, right? and it is not the attorney who signs the release, the attorney asks the injured person to sign the release, am I correct?

oh, and something else, when an injured person gets represented by an attorney, the at fault party's carrier cannot contact the injured person directly, right? how about the injured person's own carrier? can the injured person's own carrier contact the injured person directly since that person is their insured, or the injured person's own carrier has to contact the representing attorney?

I've never seen one without the other. That is, it's refered to as UMBI coverage but UIMBI is included.


is this also the case in California? or is California's UM and UIM something like what Lori talked about? :D

greatly appreciate your inputs.

Posted: 13 Feb 2009 01:14 Post Subject:

so an insured with low coverage policy and an insured with a high coverage policy gets the same free defense with no dollar limits, am I right?

Yes.

so even the above statement is written into the injured person's policy, the attorney can still have the release signed without the okay from the UIMBI carrier, and this action is not illegal, right?

It's "legal" but it's "against" the wording of the policy. An insured has a duty to cooperate but they can't be made to do this and the only time an insurance company should deny a claim for this is when they can show it harmed them in some way. If they would have allowed the BI release to be signed anyway, then doing so without their permission did not change anything. The insurance company can't just use that as an excuse for getting out of paying the UIMBI coverage.

and it is not the attorney who signs the release, the attorney asks the injured person to sign the release, am I correct?



It's the injured person who signs the release, yes.

oh, and something else, when an injured person gets represented by an attorney, the at fault party's carrier cannot contact the injured person directly, right?



Well, that could be a grey area. No attorney really allows contact without their consent so adjusters just don't contact the person with out that consent but technically I think an attorney might need to notify the insurance company that they are not to contact their client. But that is a little hyper-technical. Basically, the adjuster should avoid contacting the injured person without consent.

can the injured person's own carrier contact the injured person directly since that person is their insured, or the injured person's own carrier has to contact the representing attorney?



The own person's carrier also cannot contact their insured without permission. Of course, the can and will reserve their right under the policy requiring their insured to cooperate.

is this also the case in California? or is California's UM and UIM something like what Lori talked about?



I don't remember but if Lori said it, its probably correct. :wink:

Posted: 13 Feb 2009 07:05 Post Subject:

Hi tcope,

No attorney really allows contact without their consent so adjusters just don't contact the person with out that consent but technically I think an attorney might need to notify the insurance company that they are not to contact their client. But that is a little hyper-technical.



I'd just like to know if an attorney is usually needed to send in a written statement notifying the at-fault party's insurance carrier that he has been hired.

Of course, the can and will reserve their right under the policy requiring their insured to cooperate.



So, that means they could meet the insured in the presence of the attorney..am I right!

Posted: 13 Feb 2009 09:45 Post Subject:

Hi tcope,

The own person's carrier also cannot contact their insured without permission. Of course, the can and will reserve their right under the policy requiring their insured to cooperate.



sorry, I am a bit confused here, so does it mean that the injured person's own carrier could contact the injured person directly since that person is their insured and the carrier have the right under the policy?

Thanks a whole lot tcope :D

Posted: 13 Feb 2009 04:50 Post Subject:

I'd just like to know if an attorney is usually needed to send in a written statement notifying the at-fault party's insurance carrier that he has been hired.

Are you asking if the attorney needs to send the letter or can anyone do it? I guess anyone could do it but I don't see why the attorney would not.

So, that means they could meet the insured in the presence of the attorney..am I right!

Yes, it's done all of the time.

Posted: 13 Feb 2009 04:53 Post Subject:

sorry, I am a bit confused here, so does it mean that the injured person's own carrier could contact the injured person directly since that person is their insured and the carrier have the right under the policy?

Not sure I understand. If the person is represented the attorney will almost always (probably always) notify everyone that they cannot speak to his/her client with his/her permission. That does not mean that the person's own carrier can not speak to their insured (as their insured has a duty to cooperate) it just means that they have to have the attorneys permission. This usually means the attorney is present at all times.

Posted: 16 Feb 2009 10:11 Post Subject:

Goodmorning tcope,

Thank you deeply for your kind replies and for sharing your expertise with us.

Hope you don't mind if I come back later on asking more questions when they come up while I read some other posts. :D

Thank you, thank you, thank you. :D :D :D

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