There are times in which an attorney is challenged with splitting up a policy limits between injured motorcyclists to settle all the personal injury claims. How this gets resolved usually involves attorneys for each of the injured bikers.
The insurance carrier is only responsible for the face-value of the policy. In a minute, I’ll provide an illustration of how it might work out if the at-fault person’s insurance is $25,000/$50,000. While this may sound like a lot of money, if there are multiple injured motorcyclists, it’s not very much at all. This is especially true when you consider the severity of common motorcycle accident injuries.
I created an entire series of pages explaining how I handle motorcycle accident claims. There are several other pages you may want to review prior to reading further:
- Understanding Kentucky Motorcycle Accident Claims
- The Purpose of a Letter of Representation in a Motorcycle Accident Claim
- Reserving No-Fault Benefits After a Motorcycle Wreck
- Getting Motorcycle Crash Medical Records and Bills
- Quickly Filing a Motorcycle Accident Claim for Policy Limits
To recap my motorcycle example, My client was a passenger on a motorcycle. There was a collision involving multiple, at-fault motorcyclists. I’ve already filed a motorcycle accident claim and a demand for policy limits, due to the extent of my client’s injuries.
One insurance carrier agreed with my argument and immediately tendered their limits of $25,000 per person and $50,000 per accident to all injured claimants. This meant two things. First, they only had $50,000 of insurance for this wreck and their offer was to settle the injury claims of all injured people for this $50,000. In other words, there were going to be three injured parties that potentially had injury claims against this insurance policy so, they all have to agree to decide how to divide up the $50,000 or none of their claims can be settled. In personal injury law, this situation is known as Interpleader under the Kentucky Rules of Civil Procedure.
What Is an Interpleader?
In an Interpleader situation, you cannot settle one injury claim without settling all of them at the same time. So basically, we are faced with splitting the policy limits between injured motorcyclists. Essentially, when you have a limited “pot” of insurance proceeds, you can’t settle one personal injury claim without settling all of them at the same time. The idea being that if they offered my client 90% of their insurance policy, there is no guarantee that they can settle the remaining claims for the other 10% and as a result, they have exposed their insured to an excess judgment.
Next Step
Now, proceed to my page about looking for additional insurance to cover the value of my client’s personal injury claim.
