Attorney Jim Desmond

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Category: Car Wrecks

Why is Underinsured Motorist Insurance Important?

Auto accident involving two carsUnderinsured Motorist Insurance Can Help when the Settlement is not Enough

Why is underinsured motorist insurance so important in Kentucky and Indiana?  I had a personal injury case settle the other day wherein I had represented my client previously.  As much as we had discussed at length the particulars of his personal injury claim, I had obtained his authority to accept the settlement offer for his personal injury claim and used his old car wreck to explain the current situation.

It was clear that he did not understand why he was not receiving more money from his settlement.  In this circumstance, it was what Kentucky and Indiana law refer to as an Interpleader case. Underinsured Motorist Coverage (UIM) would have really helped this client.

For my client’s car wreck, there were five people injured by one person, a.k.a. the torfeasor, who had the state minimum in insurance coverage, $25,000 per person and $50,000 per accident.

This meant that while the tortfeasor’s insurance carrier, State Farm, was agreeing that their driver was 100% at fault for the car wreck and was willing to pay their entire policy limit of $50,000, the five people with personal injury claims had to agree on how to split the $50,000 in coverage.  To make matters worse, all these individuals were represented by experienced personal injury lawyers and all of us were arguing that our client’s injury claim was worth more than the next guy’s claim.

If an agreement would not have been reached, the $50,000 would have been deposited with the Court, (the Interpleader part of the case), and a Judge, after hearing evidence, just as if the claims proceeded to trial against the tortfeasor, would have to decide how to split the insurance proceeds.  Typically, this ends up being a lot of extra litigation expenses and unnecessary delay.  Ultimately, State Farm hired their own attorney to negotiate settlements for each injury claim, to which all five claimants had to agree to, thereby resolving these claims in full.

So in this situation, are you, an injured person from a motor vehicle accident, just out of luck and required to take just what you can get?  No!

The best way to protect yourself in this situation is to have on your own automobile or motorcycle insurance policy underinsured motorist coverage.

Had there been underinsured motorist coverage on my client’s vehicle, I could have agreed to the figure State Farm offered and then potentially recovered more funds from his own automobile insurance carrier. The fact that he would not have recovered the policy limit of $25,000 per person would NOT prevent him from making an underinsured motorist claim against his own automobile insurance.

How Can Underinsured Motorist Insurance Protect You?

To take this example a little further, if my client had ample underinsured coverage on his own automobile insurance and there had been 30 people involved in this wreck, we could have settled his injury claim for $500, for example, and still have recovered more money from his underinsured motorist coverage.  The benefit to my client is that he has the option of avoiding extensive litigation, over a limited pot of money, and instead could concentrate on prosecuting his claim against his own insurance carrier wherein there is ample insurance coverage.

While I understand not everyone wants to use their own automobile insurance coverage for a wreck that they did not cause, my job as a personal injury lawyer is to give my client options so as to maximize their ability to recover on their personal injury claim.

Once my client has their options explained to them, they can choose how they want to proceed.  However, this option, created by the presence of underinsured coverage, is only available if you have this on your own automobile or motorcycle insurance before the wreck ever occurs.  When a motor vehicle wreck happens, it is like a photograph is taken.  Nothing can be taken out of or put in that photograph no matter how severely someone is injured.

The Driver May Not Have to Pay Your Bills

Further, there is nothing in Kentucky or Indiana law that guarantees you the at-fault driver has enough insurance to pay your medical bills from a car wreck, much less your claim for pain and suffering.  If your right arm has to be amputated because of the injuries you sustained in a motorcycle wreck and the at-fault driver worked for U.P.S., then the value of that personal injury claim probably exceeds $1,000,000.  However, if you suffered that same injury and the at-fault driver was driving a 1980 Chevrolet, chances are they are insured by Safe Auto up to $25,000 per person and have no assets that make it worthwhile to sue them beyond their insurance coverage.

Please Consider Underinsured Motorist Insurance

The reality, as demonstrated by this example, is that the value of a personal injury claim really depends upon the amount of insurance coverage available to the injured party.  Therefore, as a consumer, you can protect yourself by creating an additional source of recovery by having at least $100,000 per person of underinsured motorist coverage on every automobile and/or motorcycle insurance policy in your household.

A Criminal Conviction of D.U.I. Being Used to increase the value of a Personal Injury Claim

DUI Car Accident Injuries Injury CaseI filed a lawsuit against a drunk driver this week because the liability carrier presented me with a lousy offer on my client’s personal injury claim. For you as a consumer, the interesting part is how a personal injury claim interacts with the criminal charges of being intoxicated while operating a motor vehicle.

The facts of the car wreck were such that my client was a passenger in a vehicle that was one of several vehicles hit by the drunk driver.  This is important because as a passenger, my client clearly did not have control over any of the vehicles involved in this automobile accident.  As a result, there is no way anyone can argue that she was partially at fault in causing the car wreck.  To use legal terms, the Defendant had no facts to argue comparative fault on the part of my client; a fancy way of saying someone is partially responsible for the car wreck.

So in regard to the personal injury claim, I collected all of my client’s medical records and bills and forwarded them to the drunk driver’s insurance carrier with a demand letter. In response to the demand letter, I received an offer on the personal injury claim that would have been considered low, but in the ballpark, for a normal personal injury claim.   I also learned that the drunk driver only had the state minimum of $25,000 per person in insurance coverage.  More importantly, contrary to the typical automobile accident, this at-fault driver was intoxicated when the car wreck occurred.

The other driver was arrested at the scene of the car wreck for Driving Under the Influence.  Shortly thereafter, the Jefferson County Attorney charged him with Operating a Motor Vehicle Under the Influence of Alcohol/Drugs, First Offense.  This would be a violation of KRS 189A.010 and ultimately, the at-fault driver plead guilty to violating this statute.

This guilty plea is a crucial issue in regard to the value of the personal injury claim.  Very simply, I can use that conviction in the lawsuit to prove the other driver was intoxicated at the time of the car wreck.  By doing so, I can claim that my client is entitled to not only compensatory damages (i.e. damages designed to compensate her for her losses) but also, that she is entitled to punitive damages (i.e. damages designed to punish the other party).

The Kentucky Statute on punitive damages is KRS 411.184. The gist of the statute is that a Plaintiff can recover punitive damages from a Defendant when it is shown by clear and convincing evidence that the Defendant acted with “oppression, fraud or malice.”  The argument is that by operating a motor vehicle while intoxicated, the at-fault driver showed a reckless disregard and a flagrant indifference to the rights of other motorists.    Such actions are largely how the term “malice” is defined in the punitive damage statute discussed above.

So, in my opinion, the liability adjuster should have made a settlement offer on the personal injury claim that considered both my client’s claim for both punitive and compensatory damages.  Since he did not, I filed a lawsuit in an effort to ultimately recover both kinds of damages on behalf of my client.

One last point is worth mentioning. The liability adjuster argued to me that the insurance policy for the at-fault driver did not include, and specifically excluded, insurance coverage for a punitive damage claim. I have heard that argument before. The better insurance companies (i.e. typically the larger, well-known companies) will usually advance that same argument to me while making a better than average offer on the claim for compensatory damages.  In essence, they are preserving their legal arguments while taking additional steps to protect their insured from a lawsuit.

I will wait for another blog to describe if the insurance company actually asserts this defense to coverage through another lawsuit known as a Declaration of Rights.  However, it is worth mentioning that the insurance carrier will have to hire Defense Counsel to defend the drunk driver from the lawsuit I have filed. Nevertheless, no matter who is paying the attorney’s fees of that Defense Counsel, the legal and ethical duties of that lawyer run to his client, which in this case is the drunk driver.  So the lawyer for the drunk driver cannot advance the argument that the insurance policy does not cover the punitive damage claim as such an argument would be contrary to his client’s best interests. As a result, if the insurance carrier is really going to persist on this argument of excluded coverage, they will be required to hire another attorney who can act as their own attorney in this matter.

Should I let someone else drive my car?

Let someone else drive your car in Kentucky IndianaAs a general rule, if I give you my car keys, you have my insurance coverage protecting you.  My insurance coverage, referred to as the security covering the vehicle, is generally primary and your insurance coverage is secondary in that it only comes into play if my coverage becomes exhausted. So if you drink too much alcohol one night and ask your significant other to drive your vehicle, your insurance coverage effectively protects the both of you.

However, where people get into trouble is when that significant other drives your vehicle on a regular basis and you have not informed your insurance company of that fact.   With some regularity, I will see situations in which a boyfriend and girlfriend are living together but only the girlfriend, because she qualifies for a cheaper rate, has car insurance.  The problem is that the insurance company, because they did not know about the boyfriend, may not owe insurance coverage to the boyfriend.

By failing to inform the insurance company of the regular and ongoing use of your vehicle by another, you have basically provided the insurance company with a defense wherein they can claim they do not owe coverage for personal injury from the car wreck.  In essence, they can claim that they did not insure the risk involved with the other person, who may have had multiple car wrecks, so they do not owe him insurance coverage for the wreck.  If the insurance company succeeds in denying coverage for the wreck, the driver is then exposed to the claims arising from the car wreck unless he/she has other insurance they can fall back on to provide the necessary coverage.

This is why rental car companies always ask you who is going to be driving the vehicle.  The legal duties owed by the rental car company are to the renter and the authorized users of the vehicle only. So if you let your Aunt drive the rental car to the grocery store that night and she causes a car wreck, there may be a good chance that the rental car company does not have to provide her with insurance coverage for the wreck.

Please don’t misunderstand me.  Denying insurance coverage for a car wreck is not easy and contrary to several of the arguments I advanced above, I can cite some case law that state insurance companies owe coverage for at least the state minimum.  However, we all lead busy lives and the last thing we want to do is be involved in litigation over a car wreck much less litigation with an insurance company over whether they owe the coverage we have paid for.

The law all depends upon what you can PROVE!

Injury Attorney Louisville Trial Experience ProvenI wanted to give you a tip generally about all areas of the law.  All areas of the law focus on what you can prove!  Unless we are dealing with expert testimony (e.g. doctors, accident reconstructionist, etc.), the law really is not concerned about theories or opinions.  As a result, documentation, in all areas of the law, is a huge essential to winning your claim or legal case.

For example, I am a personal injury attorney but I just helped a car wreck victim with her claim against a GAP insurance carrier; as her car loan exceeded the amount the insurance company claimed was the fair market value of the vehicle.  While I expected a battle with this insurance carrier as they had not responded to my prior letters, I was told they would be happy to process the claim once they were forwarded documents such as: the car’s repair estimates; the car’s payoff and: the original promissory note for the vehicle.  I believe my client may have already sent this material but, I cannot prove that she did or that she sent it to the correct fax number.  So now, after a long delay by the insurance carrier, we will send the material by certified mail and/or facsimile and follow up with a phone call making sure the material was received. Thereafter, I may still follow up with another letter confirming my future conversations with the carrier that the material was received and I can expect my client’s claim to be processed within “X” days.

So to expand this philosophy to other areas of the law, if you loan someone money, be sure to put the terms of the loan in writing and get their signature on the same; preferably with a notary public witnessing it. If you send money into a collection agency, be sure to send a letter with it or write on the check; for example, “payment of $500 with $2,000 still owing” or “full and final payment of all money owed”.  If you are dealing with a divorce and the ex-spouse does something against the Court’s Order, send yourself an e-mail describing the incident.  When you are ready to bring this up to your divorce lawyer or the Court, you will have an easy way to access the date of the event and its corresponding details.

All areas of the law work off of what can we prove!  And yet, we all forget the little details of events and conversations because our lives tend to run at 110 m.p.h.  Therefore, whether it is through e-mail, facsimiles or certified mail, document your conversations/actions when you are dealing with a possible legal dispute.  Also, unless the happenings of the incident are crucial to your case, you don’t have to incur legal fees by having an attorney review every little incident.  Rather, because you have all the details of the event saved, you can present all the incidents at once so either a pattern can be seen and/or the attorney can distinguish between the important and unimportant details.

Adding an Elderly Driver to Your Car Insurance

Adding an elderly driver - Louisville Injury lawyerI thought I would share with you some interesting points that I learned when I spoke to my own automobile insurance company about adding an elderly driver. In short, my father is going to be staying with me for a while.  So the question was whether he should keep his own car insurance or rather, eliminate his car insurance and merge his insurance policy with mine?

I was told that in order to get the cheapest rate, it would be best to put all the drivers and all the vehicles under one insurance policy since we all live in the same household. The problem is that if my father caused an automobile accident, that car wreck would cause an increase of my insurance premium that I could not get rid of for the next five years.  Considering that I will be adding a 16 year-old daughter to the insurance policy within the next year, the underwriter was justifiably concerned that I could be creating circumstances in which my rate would skyrocket.  So, we decided it would be best to insure our vehicles separately.

Of course, it should be noted that my father would be covered by my insurance coverage if he drove anyone of my cars but only on occasion. In the law, this is called the permissive use doctrine and it effectively says you have my insurance coverage protecting you while you are driving my vehicle if you are doing so with my permission and do not drive it on a regular basis.  If he drove my car regularly, that doctrine would not apply and the insurance company would have a defense to providing coverage for an insurance or injury claim; their argument being that they did not buy the risks associated with my father’s driving as they did not know he was using the vehicle on a regular basis.

One final point, my father ultimately indicated he did not want me on his car insurance policy because I drive my Volvo like it is the Batmobile.  Of course, I reminded him that he was the one who taught me how to drive.