QUESTION
Is it true that if the insurer refuses to settle then a suit can be filed for more than limits?
Asked on Apr 17th, 2014 on Personal Injury - Florida
More details to this question:
My family and I were involved in a serious auto accident where the other driver admitted fault to law enforcement at the scene. Our brand new SUV was totaled. His limits are 100/300 and my medical bills alone are so far at $120k. No broken bones but my wife and I have ongoing neck issues (it's been 20 months since the accident) and I've been told surgery will be needed, she still awaiting results from more nerve testing this month. My UIM is also 100/300. I'm unable to continue working a professional level role because of the pain and have had to make some lifestyle adjustments in the home because of my wife's injuries. I understand going after more than limits isn't ordinarily possible but the insured doesn't appear to have significant assets and our ongoing care (we're both in our 30's) will be costly. The other driver does have a history of driving offenses and drug use (criminal record searches were done). Is there any way to tie this in to something to broaden the scope of a lawsuit? Also, I read something about if the insurer refuses to settle then a suit can be filed for more than limits but what constitutes refusing to settle, offering nothing (unlikely) or offering not enough (likely)? Thanks for any help, hope I've included enough information.
15 ANSWERS
Chapter 7 Bankruptcy Attorney serving Syracuse, NY
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Andrew T. Velonis, P.C.
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Interesting question, difficult problem. The legal handle you are looking for is "bad faith refusal to settle" and the standards vary from state to state. First, you have to prove that the case has a settlement value of more than the policy limits. I am surprised to see that the medical expenses are so high when all you can refer to as an injury is "ongoing neck issues". In fact an "issue" is not even an injury, it is a reference to some unspecified difficulty that may be symptomatic of an underlying injury. At any rate, assuming that there is an injury, and that surgery will be required, and that you can prove with objective medical evidence that the condition which gives rise to the need for surgery was caused by the accident, then it would appear that you can pass that first hurdle. Then, you have to offer to settle within policy limits. Also, the insurer should be specifically put on notice that if they do not settle within limits and the jury verdict is more than the policy limits, they wil be exposed to a claim for bad faith refusal to settle. Then you have to win at trial for more than the policy limits. In NY the next step would be that you agree to forgo pursuing the defendant personally in exchange for his assigning his cause of action against the insurance company to you. Once done, you can sue the insurance company for exposing their insured to personal liability.
Answered on Apr 22nd, 2014 at 8:08 AM
Auto Attorney serving Bloomfield Hills, MI
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Gregory M. Janks, P.C.
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In Michigan your own insurer pays your crash related medical bills. The other parties insurer(s? - you would make a claim against both the negligent driver AND the owner) would pay up to the limits of liability that were purchased. If the limits are 100/300, then no 1 injured person collects more than $100k and the insurer will never pay more than $300k if there are multiple injured parties. You will want to read your UIM coverage, but typically it only kicks in after you recover the defendants available limits and then the recovery acts as an offset against your UIM limits (such that it is likely, based on your cited #'s, that you actually have no UIM coverage in this instance - and the insurers never seem to tell anyone that the coverage is more than likely illusory due to the offset provisions). In Michigan so-called "bad faith" claims aren't very likely to succeed, but they involve the insurers failure to settle when settlement is clearly warranted given the facts/liability/damages; however, you would then have to go to trial, win more than the limits and then try to seek bad faith damages. This is somewhat complicated, so you really need to consult local counsel to have the specific facts/damages/law reviewed. There is no 1 size fits all answer that can be given on a forum like this.
Answered on Apr 22nd, 2014 at 8:07 AM
James Eugene Hasser
No, that's not true. The insurance company will only be liable for the limits of their policy. However, if their insured instructs them, in writing, to settle the claim within the limits and they get the opportunity to do so and don't, then the insurance company could be held liable for whatever judgment you get.
Answered on Apr 21st, 2014 at 6:50 PM
Advocacy Attorney serving Boca Raton, FL
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Steven H. Meyer, P.A.
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You really should speak to a lawyer in your area who has experience in these types of cases. I am not sure where you're located, but if you happen to be in Florida we would be happy to speak with you about the case. I am board certified in civil trial law, which means that I am an expert in handling civil trial matters, which includes this type of case.
Answered on Apr 21st, 2014 at 6:38 PM
Edwin K. Niles
You don't say whether or not you have a lawyer. If so, he/she should answer this question. Yes, if you make a formal, written settlement demand for the policy limit, backed up with medical bills and reports, and they refuse to act within your reasonable time limit, it can be deemed bad faith, and you can sue the insurance company direct. It will extraordinarily difficult getting anything over the limit, but if you can truly back up your story it could happen.
Answered on Apr 21st, 2014 at 5:00 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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This issue is not yours, but the uninsured parties. I would certainly hope that you have engaged an attorney, and if you have not, do so now.
Answered on Apr 21st, 2014 at 4:59 PM
Assuming the defendant is legally liable for causing your accident, the defendant's insurance company can be liable for more than its policy limits, if it refuses to offer you its full policy limits. If it offers the full policy limits, and you accept, you may still be able to claim the UIM limit on your own auto insurance policy, if your damages are greater than the defendant's insurance company paid you. Of course, you can also sue the defendant after his insurance company pays its full policy limits, but that doesn't sound too promising.
Answered on Apr 21st, 2014 at 4:59 PM
Admiralty and Maritime Law Attorney serving Gulf Breeze, FL
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Law Offices of John W. Merting, P.A.
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You need an auto accident law firm very experienced in what are called bad faith refusal to settle cases. The insurance company must have the opportunity to settle within the policy limits. This is a very complex area of the law and an experienced bad faith attorney is absolutely recommended. Ask the law firm to show you specific results of bad faith cases they have successfully handled. You do not want an attorney cutting his teeth on your case!
Answered on Apr 21st, 2014 at 4:59 PM
Commercial Contracts Attorney serving Boise, ID
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Peters Law, PLLC
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If you sue and the insurer had the opportunity to settle for policy limits and unreasonably did not, you get a judgment against the defendant. Then the defendant assigns his claim against the insurance company to you and your attorney tries to prove that the insurer was wrong in not settling. You really need to get your personal injury attorney involved to figure out if this is even a possibility. It may very well be that the insurer will pay the limits and that will be that.
Answered on Apr 21st, 2014 at 4:59 PM
Personal Injury Attorney serving Atlanta, GA
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Gregory S. Shurman, LLC
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Yes, you can seek more than the limits if the insurer refuses to accept your demand, so long as your demand does not exceed the limits.
Answered on Apr 21st, 2014 at 4:58 PM
Personal Injury Attorney serving St. Louis, MO
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The S.E. Farris Law Firm
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If the insurer has an opportunity to settle a claim within the policy limits and does not do so and there is no good reason, then yes, you can pursue the insured for an excess judgment and collect it against the insurance company. This is called a bad faith claim, and requires expertise as you don't just get a judgment and get paid! There are also ways to get a settlement without suit and then pursue the insurance company for the excess over the policy. We have a video on our website that discusses this. With your UIM in the balance, there are added damages as you can't pursue your own UIM until the limits are offered. This is a complicated matter, and you should hire an attorney who is experienced in litigating against insurance companies.
Answered on Apr 21st, 2014 at 4:57 PM
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If you accident occurred in Wisconsin, a big issue will be the wording of your insurance policy. From 2009 until 2011, Wisconsin forbade automobile insurers from using a definition of underinsured motorist that would result in no real benefit to the insured if the liable driver carried liability insurance coverage identical to the injured party's UIM coverage. In 2011, the legislature stripped the benefits of the 2009 law, allowing automobile insurers to use a definition of underinsured motorist that effectively abrogated coverage in situations such as yours. The Wisconsin Association for Justice made flyers for lawyers to distribute, suggesting that people tell their insurance agents that the people wanted the same coverage they had before the change in the law.
Answered on Apr 21st, 2014 at 4:57 PM
Thomas Edward Gates
Do to the complexity of your injuries, you need to contact a personal injury attorney. Remember, while you may get a judgment above his policy limits, if he has no assets, you will not be able to collect it.
Answered on Apr 21st, 2014 at 4:56 PM
Personal Injury Law Attorney serving Naperville, IL
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Law Office of Barry R. Rabovsky
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If the insurance company refuses to settle within the limit in good faith, it is possible to seek more than the limit from the insurance company. The refusal to settle within the policy limit generally has to be unreasonable.
Answered on Apr 21st, 2014 at 4:56 PM
Commercial Litigation Attorney serving Miami, FL
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Irv J. Lamel
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If you have a lawyer representing you, you should discuss with him/her these issues. However, in general, it is possible to obtain more than the policy limits but it is a complicated, long process that is only occasionally successful. Briefly, if the insurance company for the at-fault party refuses to accept a settlement offer within the policy limits as required by the terms of the offer (for example, according to the terms for amount, time of acceptance, time for payment, etc.), and if the case goes to trial and the verdict is for an amount in excess of the policy limits, the injured party can negotiate with the at-fault party to obtain an assignment of that party's "bad faith" claim against his insurance company for refusal to settle. The theory is that the insurance company is supposed to protect its insured and by refusing to settle within the policy limits when it had the opportunity to do so, it failed to protect its insured who then has a claim against the insurance company for that failure. However, since the insured now has a judgment against him for an amount in excess of the policy limits, when the insurance company pays the policy limits the at-fault party satisfies the balance by assigning his claim against the insurance company to the injured party.
Answered on Apr 21st, 2014 at 4:56 PM