Insurance Issues Archives

Filing a Lawsuit Against an Uninsured Driver

I filed a lawsuit against what appears to be an uninsured driver this weekend. The Jefferson County Clerk has set it up so I can file a Complaint, the document that starts a lawsuit electronically from my computer. However, the filing fee for a lawsuit tends to cost me about $198 for each lawsuit filed with the Jefferson Circuit Court. The question is did I waste my money filing a lawsuit against an uninsured driver?

According to the Insurance Information Institute, about 11.5% of Kentucky motorists were, in violation of Kentucky, driving without insurance on their automobile. For Indiana, the rate was closer to 16.7%. https://www.iii.org/fact-statistic/facts-statistics-uninsured-motorists. So when a car accident or a motorcycle wreck occurs, one of the first questions a personal injury attorney has to deal with is whether the at-fault driver, or the vehicle they were operating, was insured.

The easiest way to find insurance coverage on an at-fault driver is hope that the police report has the proper insurance company listed. If that does not work, I will typically run the license plate of the at-fault vehicle with the Jefferson County Clerk. The Clerk can provide me with the insurance company and policy number the last time that vehicle was registered.

As a last resort, I will send the driver and owner of the at-fault vehicle a letter asking for their insurance information and threatening to file a lawsuit if they do not cooperate. The problem is filing a lawsuit against an uninsured driver may not be worth the time and expense involved.

Recall that a Judgment is really just a piece of paper that says someone owes you money. So, in essence, a Judgment against someone can be worthless if they have no assets to collect it against or if they can bankrupt that Judgment by filing Bankruptcy proceedings. So for the personal injury suits I filed, it could be that we won’t even recover the filing fee much less the value of the client’s personal injury claim. Granted, in Kentucky, K.R.S. 187.410 allows me to revoke someone’s driving privileges if the unpaid Judgment relates stems from a car wreck. However, if the at-fault driver files Bankruptcy, the suspension, and my client’s Judgment, is dissolved.

Nevertheless, I believe this instance justified a personal injury lawsuit. My injured client had an initial Emergency Room bill in excess of $19,000 and he may not have had uninsured motorist coverage either. As a result, unless I can find insurance coverage on the at-fault driver, my client really has no source to recover his pain and suffering claim from.

However, in this instance, my first goal is not to recover the value of his personal injury but rather, to keep my client from owing a large amount of medical expenses for a car wreck that was not his fault.; to do that, I’m going against the odds and hoping that filing a lawsuit against an uninsured driver will discover insurance coverage not readily apparent.

So what’s my fallback position(s) for everything? If all else fails, I will have to use health insurance to pay the medical bills. My client appears to be qualified for Medicaid after the car wreck occurred. While Medicaid will have a right to recover whatever medical expenses they pay out through what is known as subrogation claim or a right of reimbursement, they can only recover the amount that is actually paid to satisfy the $19,000 medical expense. My hope is that the amount Medicaid seeks to recover will be about one-third of the $19,000 expense. This way, I can reserve my client’s no-fault coverage of $10,000 and use that no-fault, a.k.a. as PIP coverage, to satisfy Medicaid’s subrogation claim.

Yes, in this worst-case scenario, regardless of the personal injury lawsuit, the client can not recover any more towards the value of his personal injury because the at-fault drive was uninsured and he did not purchase uninsured motorist coverage before the car wreck. However, in Kentucky, 99% of the time you are entitled to no-fault benefits of at least $10,000 as long as the car wreck happened in Kentucky and you were not driving a vehicle you owned that was uninsured.

As a result, this no-fault coverage may be the only insurance coverage that exists for this car wreck. Consequently, we have to stretch that $10,000 in no-fault coverage in every way possible so that the client, while uncompensated for his personal injury claim, will not owe medical bills for a car wreck that he did not cause.

At the end of the day, filing a lawsuit against an uninsured driver at least provides valuable information to determine my client’s best options.

Finding Layers of Insurance Coverage

Throughout my legal career, I have handled a lot of car accidents and motorcycle wrecks wherein we could not recover the full value of my client’s personal injury claim. Why? Very simply, the value of a personal injury claim, from an automobile accident, depends in large part upon the insurance that is in place before the car wreck. This is true whether we are talking about your own car or motorcycle insurance or whether we are talking about the insurance on the at-fault driver.

Imagine for a second that insurance coverage is like baking a cake with several layers. Ideally, each layer leads to and is on top of the next layer. For a serious car wreck, the base of the cake is the liability insurance, the insurance on the at-fault driver. The next layer(s) is composed of your underinsured motorist coverage on your own automobile insurance policy. The icing is the end result from your personal injury. Motorcycle wrecks are a great illustration of this process and how a good personal injury lawyer may still not be able to recover the full value of your personal injury claim.

I have been working on a motorcycle wreck case wherein the client was hospitalized at the University of Louisville Hospital for over 30 days. As a result, the motorcyclist has medical expenses in the six-figure range. Yes, the client has health insurance and we will be using the health insurance of the motorcyclist to pay the medical bills and to reduce the medical bills to a lower amount. However, even the subrogation claim being asserted by the health plan, (a claim by the health plan to recover the medical expenses they have paid), exceeds the insurance coverage on the at-fault driver. For this case, the at-fault driver was insured for only $25,000 per person. In Kentucky and Indiana, this is the state minimum and a driver only needs to have as little as $25,000 per person in insurance coverage to lawfully operate an automobile.

So, I have been doing a lot of searching for other liability insurance that might apply to the negligence of the at-fault driver. I have ordered a copy of the title for the at-fault vehicle because the law provides that the insurance covering a vehicle is primary and the insurance covering the driver is secondary. In other words, I might find insurance on the vehicle or the driver or both.

For example, if I let you borrow my car, both of our insurance policies, you as a driver and me as the owner of the vehicle, could apply to the wreck. Yes, it is a long shot but considering the severe nature of my client’s injuries, I have to look in multiple places for multiple insurance policies.

This is worth reemphasizing. There is no issue as to the value of my client’s personal injury claim as fault for this motorcycle wreck is clearly on the automobile driver AND my client has over $100,000 in medical bills; much less considering his future treatment or lost wages. Yes, I can sue that at-fault driver and get a piece of paper, known as a judgment, that says the at-fault driver owes the full value of my client’s personal injury claim. However, judgments are a legal means of collecting a debt against someone’s assets through garnishments and foreclosures. If the at-fault driver does not have any significant assets, there is nothing to collect that judgment from. Moreover, unless the judgment involves punitive damages, the at-fault driver can bankrupt that judgment and make it disappear as if it never existed. This is why a good personal injury lawyer looks for underinsured motorist coverage. The problem being that the client, in this case the injured motorcyclist, has to have bought the underinsured coverage before the car wreck.

Many, many people incorrectly think that they do not need this coverage as they incorrectly think the at-fault driver is responsible for all the damages they have caused. Realistically, that is just not the case. So again, the value of the personal injury claim may be determined before the car wreck ever happens because it is at that time, all the liability insurance and underinsured motorist coverage is put in place.

For the motorcycle wreck I have been talking about, there was no underinsured motorist coverage on the motorcycle insurance policy. While the client had underinsured motorist coverage on an automobile insurance policy, that car insurance had two exclusions that made it inapplicable to the motorcycle accident.

First, it specifically excluded insurance coverage for two and three wheel vehicles, i.e. motorcycles and ATVs. Second, it excluded vehicles regularly owned and operated by the client BUT not listed on that insurance policy. In this case, the motorcycle was insured through another company and therefore, it was not listed on the automobile insurance policy.

So now, admittedly as a last resort, I am looking to the insurance policies of family members with whom my client has resided. To oversimplify things, you can have insurance coverage as someone who is listed on the insurance policy as a resident relative of the same household. The easiest example is to think about a 13-year old child that has divorced parents and lives with both his mother and father. Potentially, either his mother’s or father’s insurance policy could provide insurance benefits for a car accident even if the child was not in either parent’s vehicle.

On a final note, be careful about settling with one insurance policy and trying to pursue another. Depending upon what you sign, you could inadvertently release a claim against the driver’s insurance by settling with the company with that insures the motor vehicle. There are specific statutes, both in Kentucky and Indiana, that require certain procedures to be followed to preserve an underinsured motorist claim and BEFORE you settle with the liability carrier. If you don’t follow these procedures, your underinsured claim could be barred.

My job as a personal injury lawyer for this kind of motorcycle wreck is to find and collect from as much insurance as I can to maximize my client’s personal injury recovery. In addition, I have to minimize the subrogation claim of the health plan because every dollar the health plan recovers, is one less dollar my client is going to recover.

There’s one final point that I do hope you will think about. The value of a personal injury claim, unless you buy the correct insurance on your own motorcycle insurance before the wreck, depends upon luck. If the at-fault driver has a one-million-dollar insurance policy, you are in good shape. In contrast, if the at-fault driver is driving a 1980 Chevrolet, that same case with those same injuries is going to be worth a whole lot less.

When Insurance Totals Your Car

In a recent blog post I started talking about some of the issues that come up when your car is damaged in a car wreck. However, the one issue I did not get to is when the insurance company tells you that your vehicle is totaled or a total loss. So, what happens when insurance totals your car?

For example, assume you have just finished paying off your Ford Explorer that has a present, book value of $7,000 and because you have taken meticulous care of it over the years, you believe it should run for another 10 years or 100,000 miles. A drunk driver plows into the rear-end of your vehicle and pushes your Explorer into another large SUV causing your airbags to go off. Most likely, your Explorer will be a total loss as each airbag alone tends to cost about over $1,000 to replace.

In Kentucky and Indiana, an insurance company is required to total out a vehicle if the repair costs equal or 75% (in Kentucky) or 70% (in Indiana) of the value of the vehicle. This is a link to a website that describes what I am talking about and lists the percentages for each state, http://www.carinsurance.com/Articles/total-loss-thresholds.aspx.

The problem being that when a car is a total loss, the insurance company owes you the fair market value of the vehicle, not the replacement value.

Therefore, in my example, you could recover the $7,000 the Explorer was worth with some fees for taxes and titling the vehicle. The fact that it may cost you more money to replace that vehicle with something just as good, is irrelevant in the eyes of the law.

Yes, you can keep your vehicle if an accident totals your car. Nothing in the law requires you to turn over your vehicle to the insurance company. However, the insurance company will deduct whatever money they would have gotten from a junkyard for the Explorer. This is usually referred to as salvage value and it tends to run about 20% of the fair market value of the vehicle. So in the case of the Explorer, you could keep it but the insurance company would pay you approximately $5,600 instead and you would have to apply to your local County Clerk for a salvage title.

You have to check with the County Clerk as to the specifics required for a salvage title but, I can tell you that you have to turn in the license plate so the vehicle can not be driven while it is being fixed and a mechanic has to complete an affidavit as to the work done with the appropriate receipts for the parts purchased.

Typically, if insurance totals your car, unless you can fix the vehicle yourself, know a backyard mechanic who can do the repairs cheaply or drive the car ugly because the damage to the vehicle was mostly cosmetic, it is better to let the insurance company haul the car off.

Using Collision Coverage

Using Collision Coverage As a personal injury lawyer, I preach a lot about getting your medical bills paid and recovering your claim for pain and suffering from the insurance company for the at-fault driver. However, what about the damage to your car? What does my collision coverage actually cover? What about a rental car? Who is going to be responsible for fixing my vehicle and putting me in a rental car while it is being fixed? The answer to that question depends all upon the course of action you choose.

Collision coverage, on your own automobile insurance, is the easiest and quickest route to take. Ultimately, your insurance company is going to be responsible for paying for the damage to your vehicle, regardless of who caused the car wreck, less your collision deductible. The downside is that it may be months before you get your deducible back, if at all, and your collision coverage will not provide for a rental car.

Another route is to make a claim against the insurance company for the at-fault driver assuming he was insured and fault for the car wreck clearly rests with him. In such a case, there is no deductible and the insurance carrier will put you in a rental car while your car is being repaired. However, listed above, were two conditions that had to be met before the insurance company is going to agree to pay the first penny:

Their driver has to be at fault for the wreck and
They have to agree that they have insurance coverage for this wreck.

You have to show that the at-fault driver was negligent and that this negligence caused the damage to your vehicle. If you can’t prove negligence by the other driver, the insurance company will simply deny your claim thereby forcing you to either file a lawsuit or use your collision coverage. Remember it is not what you think happened in the car wreck but rather what can you PROVE. (See May 16, 2016 blog, https://attorneydesmond.com/law-depends-upon-can-prove/ .)

So what about the police report? Isn’t that enough to show the other guy was at fault? Sometimes but, recall that negligence means you can show that the other driver had a duty, breached that duty and but for that breach, you would not have suffered your damages.

Nothing in the law prevents an insurance company from making reasonable assumptions, contrary to the assumptions contained in a police report, as to who was at fault for a car wreck; as long as these assumptions are based upon reasonable interpretations of the facts.

When a car wreck involves a drunk driver or a rear-end collision while you are stopped at a traffic light, it is pretty easy to show the other guy was negligent. However, when you have two drivers who both claimed to have entered the intersection on a green light, how do we know who is telling the truth and can’t an insurance company reasonably assume that their insured is being honest?

The second issue is that the insurance company has to have had valid insurance on that vehicle or the driver at the time of the car wreck. Insurance companies can deny insurance coverage for a variety of reasons including but not limited to: their insured is not cooperating with their investigation; the policy premiums have not been paid; they did not insure that driver; or that did not insure the vehicle involved in the car wreck. If this happens, you either have to use your collision coverage or try to find other insurance on this driver to cover the damage to your car.

If you don’t have collision coverage and you can’t find any insurance on the other driver, you may be looking at a lawsuit to try and recover for the damages to your vehicle. The problem being that lawsuits are lengthy, expensive processes that can end with you trying to collect on Judgment wherein the at-fault driver has little to no money to pay that Judgment.

In writing this blog, I realized I may need to address it a little deeper with a future blog or two. So for the moment, I would suggest you call me should you have questions about your damaged automobile. The call is free no matter whether we pursue a personal injury claim or not. You can reach me on my phone at [number]. FYI, since it is my phone, you can text me at that number as well should you prefer that method of contact.

ERISA and Health Insurance Subrogation Claims

Louisville Injury Attorney ERISA Subrogation To explain ERISA (The Employee Retirement Income Security Act of 1974) and how it affects your medical bills and financial recovery in a simple fashion can be challenging, but its important to understand. ERISA is the law that governs the rights of health insurance carriers. If your medical bills from injuries in a car accident were paid by health insurance of an employer’s health plan, the insurance company or plan may want you to reimburse it out of any personal injury recovery.
The gist of all ERISA law is that if we, the health plan, pay medical expenses which were caused by someone’s else’s negligence and you recover a personal injury claim from any source, we have a right to recover from you. Legally speaking, the right of the insurance company to recover medical expenses they’ve paid from your personal injury claim settlement or verdict is called “reimbursement” or “subrogation.”
ERISA law generally tries to claim that it is controlled by Federal Law and preempts state law to the contrary. Your injury attorney must understand the implications of ERISA on your case.
Almost every health insurance plan, whether it be private, Medicare, Medicaid or state-funded, has a provision in it that says they have a right to recover the medical bills they pay on your behalf if you recover on your personal injury claim. This right is not limited to recoveries from third-parties but rather, includes recoveries made through uninsured motorist coverage, underinsured motorist coverage and no-fault benefits. Also, most health plans have contract language saying that they don’t owe attorney fees on the amount they recover and that they are a first-priority lien that trumps your rights no matter how badly you are hurt.
The law regarding health plans is ever-changing. Therefore, I have to limit my discussion to say you need to understand that your health plan has a right to recover what they paid out in medical expenses as a result of your motorcycle crash, car or truck accident. I know it is not fair and yes, I agree that they should not be allowed to recover anything since that is what we pay the health insurance premiums to cover. However, it is the law.
For my practice, I have to identify early on the interests of the health plan and look at their terms of the health insurance plan to determine the extent of their legal rights. Unfortunately, the health plan can legally come in and eat up much of a client’s recovery. This is why I have to try and negotiate a reasonable settlement with them as every dollar that does not go into their pocket, goes into my client’s pocket. This is also the reason why it is so important to have an experienced personal injury attorney like me working on your injury case.
The bottom line is for those of you who are trying to handle a personal injury claim, make sure you address the interests of the health plan. The last thing you want to happen is to settle your claim and get sued by your health plan several years after the settlement. I invite you to contact me or call me on my phone at [number].

Category: Insurance Issues