Many victims of catastrophic property damage or personal injury do not have insurance coverage that fully covers their damages. Many people facing liability through a lawsuit for a catastrophic loss do not have insurance coverage that will fully cover their liability exposure. These victims of underinsurance rightly fear being left out in the cold, bearing a disproportionate amount of responsibility for a major loss.
Although victims of underinsurance often feel stuck, there are many ways a savvy attorney with insurance expertise can help to navigate through a difficult situation. Here are a few of the strategies utilized by experienced and knowledgeable insurance attorneys.
Maybe you were in a minor collision and the at-fault driver was uninsured, or maybe a family member tragically died and the negligent party that caused the death has very little insurance to cover the catastrophic loss. In both situations, you are a plaintiff who faces the problem of underinsurance.
One of the first strategies used in this situation is to look at the assets of the person who is insured. If that person or company has very little insurance but significant assets, then there is the possibility of recovering from both the insurance company and the at-fault party. Asset investigations, property searches, and other methods can reveal additional sources for potential recovery.
Another strategy is to identify all parties who are potentially liable. Was the at-fault driver who hit you a delivery driver that was working at the time of the accident? If so, the driver’s employer may also be liable and may have insurance and/or assets to provide complete recovery.
Finally, another source of recovery may be your own insurance. Automobile policies covering uninsured motorist (UM) and underinsured motorist (UIM) are designed to protect you from becoming a victim of underinsurance. Under typical underinsured motorist coverage, your own insurance becomes liable for damages you suffered in excess of the insurance coverage of the at-fault party. Cases involving UM and UIM claims can become very difficult to navigate due to the complexities of insurance law and it is always recommended to work with an experienced insurance attorney if you may have a UM or UIM claim.
For non-automobile related claims, a homeowner insurance policy may provide coverage, or an umbrella policy may provide coverage. These policies are often complex and lengthy, with many exceptions that may apply to prevent coverage. If you have questions regarding potential insurance coverage, seek the professional help of an insurance attorney. Insurance companies often provide an opinion as to coverage, but you will want to have that opinion reviewed by your own attorney.
Maybe you were sued and sent the claim to your insurance company only to find there is no coverage or limited coverage under your insurance policy. You may feel betrayed because the company who you have faithfully paid premiums to is now denying coverage. Your insurance company, like any company, is in the business of making money and so will only pay for losses that are covered under your policy. Many people purchase insurance without fulling understanding the terms of their policy, relying on the expertise of the insurance professional (usually an agent) who is selling the policy.
The primary concern of a defendant who is underinsured is the possibility of a judgment against them and subsequent collection actions. First, it is important to assess whether or not there is a risk of personal exposure. Experienced defense litigation attorneys can usually provide an analysis of the claims asserted against you and an opinion as to your exposure beyond the policy limits. It is also important to make sure that claims have been tendered for all applicable insurance policies. Individuals and companies may consider having a bankruptcy attorney provide them with an assessment of their assets and identify whether filing bankruptcy would protect those assets. Finally, experienced litigation defense counsel can often develop a litigation strategy that serves to protect you or your company from liability beyond the limits of your policy.
Whether a plaintiff or defendant, any victim of underinsurance should know that there are options. There are, of course, situations where no strategy will suffice and the outcome is fixed. Nevertheless, it is important that you find an attorney who is able to explore every option and employ these strategies on your behalf.
By: Luke O’Bannan