Who pays when at fault drivers are minimally insured?

This week’s question comes from Lydia in South San Francisco who asks:

“I was driving with my daughter in the car when a guy in an old pickup truck ran a stop sign and T-boned us. I broke my arm and my back is messed up pretty bad. My daughter was in a car seat on the other side of the car from where we got hit and was cut by broken glass and shaken up pretty bad. I was hella scared that she had been badly injured because she was crying and bleeding. We both were taken to General Hospital by ambulance. My daughter was released that day without any stitches, but I had surgery to put in a steel plate in my arm and had to stay a couple of days. My car is totaled and I’m off work, not getting paid. The guy’s insurance company says that he has only $15,000.00 insurance on his truck. I know he is a painter because there were ladders and paint in his truck and on the ground. I have pretty good insurance, but I don’t know if it pays for my medical bills. The other guy’s insurance company wants me to sign off to get his $15,000. This is really stressing me out. What are my options?”

Lydia, thank God you and your daughter are alive. It’s bad enough that you got injured but, like many of my clients, you were hit by someone who was minimally insured and, therefore, there are a lot of variables that need to be analyzed in order to determine if there is other available insurance to help cover your injuries and those of your daughter.

Under the law you are entitled to recover all medical expenses for you and your daughter, your wage loss, property damage, and other quantifiable economic losses. Additionally, both you and your daughter are each entitled to compensation for your personal non-economic injuries such as pain, suffering and emotional distress. The law also recognizes that, in addition to recovering compensation for the harm which you suffered because of your injuries, when you witness a loved one be injured, you suffer a distinct and additional harm to your psyche. This is called the negligent infliction of emotional distress. We commonly refer to economic and non-economic damages as “personal injuries.” Under the terms of an insurance policy these harms are referred to as “bodily injury” damages.

Liability insurance, which we all must carry on our vehicles, is designed to “cover” these types of injuries. In this case, the other driver appears to have been carrying only the state minimum: $15,000 per person, $30,000 per occurrence. This means that the insurance company, no matter how great the harm, is responsible to pay no more than $15,000 to any one person, and no more than $30,000 to everyone who may have been harmed in the same accident. Therefore, if the other driver’s insurance company is telling you that there is only a total of $15,000 available to cover the injuries for you and your daughter, they are not telling you the whole truth. Your injuries warrant payment of the $15,000 without question and, there is up to $15,000 to pay for your daughter’s injuries too.

The state minimum also requires that a driver have coverage of up to $5,000 for property damage caused by their negligence. A negligent party must pay the lesser of the amount to repair the car or its fair market value (the cost of a similar replacement vehicle). Property damage coverage also pays for towing, storage and usually the cost of a rental vehicle until the car has been repaired or it has been “totaled” and the fair market value has been paid. Therefore, up to $5,000 is also available to compensate for your property damage.

Your recovery is not limited to the driver’s insurance. If the driver has assets, such as real estate, you may look to those assets as a way of receiving full compensation.

If the driver worked for a painting company, even if he was off duty, his employer may be liable for his negligent conduct. Under the law, if someone is in the “course and scope” of their employment [on the clock and working] at the time of a collision, or they were using their vehicle for the benefit of their employer, such as carrying paint, ladders, etc. for work the next day or next job, then their employer is responsible for the harm they cause. Many employers carry a “Certificate of General Liability” which is, in essence, business insurance. Therefore, this avenue must be fully investigated before you consider whether to settle your claim or not.

If there are no assets, and there is no employer liability, you then must examine your own insurance policy to see whether you have “uninsured/underinsured” (UM/UIM) coverage. This is insurance which you purchase to compensate you if you are injured by someone with no coverage or inadequate coverage. For example, if you have $100,000 per person, $300,000 per occurrence in UM/UIM coverage, and he has a $15,000/$30,000 policy, you have an additional $85,000 in available insurance for each of you from your own policy. (I highly recommend that everyone carry a large UM/UIM policy as approximately 25% of all California drivers are uninsured and many more are underinsured.)

You also may carry “comprehensive” coverage which can provide additional funds to compensate you for your property loss above the $5,000 state minimum.

Depending on how “good” your insurance is, you may have “medical payments coverage” (med-pay) which provides for some money to help pay your medical bills. This is not usually a large amount but every little bit counts. Making a claim against your own policy for UIM or med-pay coverage should not increase your premiums.

I suggest that you speak with a good trial lawyer before accepting any offer. You have a serious injury deserving of serious compensation and the driver’s insurance company is not going to act in your best interests.

Christopher B. Dolan is owner of the Dolan Law Firm. Email questions and topics for future articles to help@dolanlawfirm.com.

We serve clients across the San Francisco Bay Area and California from our offices in San Francisco, Oakland, and Los Angeles. Our work is no recovery, no free or also referred to as contingency-based. That means we collect no fee unless we obtain money for your damages and injuries.

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