You would think that the topic of auto insurance is a simple one. Years ago some insurance carriers began writing auto insurance policies in what they call plain English. Plain English to an insurance carrier is typically not plain English to the ordinary American. As simple as insurance companies may have tried to make auto insurance language, the fact is they are complicated documents. They become especially complicated where you have coverage being provided apparently in one part of the policy only to be excluded or exempted in some other part of the policy.
If you’ve been involved in an accident, you should contact an experienced auto accident attorney who will represent your interests – not the insurance company’s.
Basic forms of auto insurance coverage are liability, comprehensive, collision, uninsured motorist and medical payments.
Auto Insurance Coverage for Liability
Liability coverage protects you in the event that someone else alleges that you were at fault for an automobile accident. By you, I mean either you as the insured or anyone who is driving your vehicle with your permission. Under state statutes anyone who is a “permissive user” of the vehicle is covered by the liability policy. Liability coverage is the only form of coverage in Virginia that comes close to being mandatory. In reality however it is not mandatory because you can choose to pay an uninsured motorist fee in which event you may go without liability coverage. The minimum coverage allowed in Virginia for liability is $25,000.00.
That $25,000.00 means that the insurance carrier will pay up to $25,000.00 in the event that you were found to be liable for the collision. The insurance carrier will also provide an attorney to defend you. The attorney is one that they chose- not you.
Auto Insurance Coverage for Uninsured Motorist
Inadequate insurance policy limits are a frequent problem, especially in the Fairfax, Virginia area. Virginia does not have a mandatory liability insurance law. It allows certain people to drive uninsured as long as they pay what is called the uninsured motorist fee to the state of Virginia. As a result, there are a number of people in the state of Virginia that may actually be either uninsured or under-insured. The minimum policy limits that are required in the state of Virginia are $25,000. That is an insufficient amount to cover damages for any significant injury.
If the damages exceed the liability insurance limits of the at fault motorist, then the injured person’s only recourse is to notify their own under-insured motorist carrier. Under-insured motorist coverage kicks in to the extent that it exceeds the liability coverage of the at fault motorist.
For instance, if the at fault motorist only has a $25,000 policy but the injured party has underinsured motorist coverage of $300,000 then the total available coverage is going to be that $300,000, i.e. $25,000 from the at fault motorist and $275,000 from the uninsured motorist coverage.
This latter form of coverage applies whether you are in an insured vehicle or not. For instance if you are a pedestrian then conceivably your uninsured motorist coverage could apply. Imagine that you are struck while crossing the street in a crosswalk. The striking vehicle only has $25,000.00 of coverage. Your $300,000.00 auto insurance policy may apply in that instance. In this event the available coverage is $300,000.00 i.e., $25,000.00 from the at-fault motorist and $275,000.00 from your policy.
Issues of coverage under uninsured motorist endorsements of insurance policies can be rather complex.
Underinsured coverage is something you should have to avoid the inadequacy of liability insurance policy limits of the at fault motorist.
Uninsured motorist claims frequently involve issues of subrogation. Subrogation is a concept that allows an insurance company that has paid out money on behalf of its insured to recover that money from the party who is at fault for that injury. The issue of subrogation must be addressed in an uninsured motorist claim before any settlement is reached. That is, you must address the question of whether or not the uninsured motorist carrier is going to be able to recover any monies from that at-fault motorist.
The insurance industry operates on the principle that when they are pursuing a subrogation matter against the party that was at fault who injured their insured then the insurance company, as a matter of routine, typically seeks to obtain a judgment against that at fault motorist for the amount that they paid to their insured. Insurance companies do that even though the at fault motorist may be insolvent.
The logic in getting such a judgment is that in most states, including the state of Virginia, the judgment is valid for at least 20 years. If that person acquires real estate, then before they can sell that real estate, they will need to satisfy the judgment or otherwise have it discharged in bankruptcy.
See uninsured motorist coverage for a review of Virginia case law on this subject.
Auto Insurance-Collision Coverage
Collision coverage is coverage that applies where your vehicle has been damaged. It makes no difference who is at fault. If you have that coverage your insurance carrier will repair your vehicle. Typically if the repair cost is more than 70% of the value of the vehicle, then the insurance carrier will “total” the vehicle. Under that circumstance they are only obliged to pay you the fair market value of the vehicle. Fair market value may be determined by looking at such sites as Kelley Blue Book and Edmunds.com. The insurance companies use their own book upon which they base fair market value of vehicles. This can sometimes create an unhappy circumstance. Suppose you have a lien against the vehicle for $10,000.00 and the vehicle is only worth $8,000.00. The insurance company is only obliged to pay you that fair market value i.e., $8,000.00. That leaves you $2,000.00 short in terms of having to pay your lender for a vehicle you no longer have.
Comprehensive coverage is somewhat similar to collision in that it covers such things as fire, theft and glass breakage. These types of coverage apply regardless of who may be at fault for the particular damages.
Auto Insurance-Medical Payments
Personal injury protection insurance coverage is also known as medical payments coverage. This type of insurance coverage is what is referred to as a first party coverage meaning that the insurance carrier that issued the policy that covers a vehicle actually insures the passengers in the vehicle also. This form of coverage applies to any passenger, including the driver. It is also generally referred to as a type of no-fault coverage. What that means is that it makes no difference whether or not there was any fault on the part of the driver or the passenger that may have contributed to the collision.
In the state of Virginia the typical coverage is in the range of $5,000 but it may be higher than that. This type of coverage may stack meaning that if there are multiple vehicles on the policy then the coverage for one vehicle actually stacks or is added to the coverage for another vehicle thereby increasing the pool of potential recovery.
This form of coverage is a useful thing to have. It protects not only the driver/owner but also any passengers in the vehicle and provides a means of paying for medical treatment up to what the limits of the policy are.
See medical payments for a review of Virginia case law on this topic.
Medical payments coverage (frequently called Med Pay) is a very valuable form of coverage to have. Even though your medical bills may have been submitted to your health insurance carrier and even though you are claiming your medical bills in your liability claim against the at-fault motorist, you can still submit these medical bills to your medical payments carrier and they will pay them.
One thing you need to be aware of in any auto collision is that if bills are submitted to your health insurance carrier then typically they have a right of subrogation. The right of subrogation means that the health insurance carrier has a right to recover every dollar that they paid out on your behalf. Some health insurance policies allow a reduction of this right of recovery for the attorney’s fees that you would incur. Typically in an injury case your attorney’s fees would be 1/3 of the recovery. In that circumstance they may reduce their subrogation claim by 1/3. That however again is policy-specific. That right of subrogation applies however only to employer-issued ERISA health insurance policies. Otherwise subrogation is barred in Virginia for health insurance policies.
Homeowner’s insurance policies in the Fairfax, Virginia area, as is true in most jurisdictions, may cover most personal injury claims but do not apply to auto claims.
A homeowner’s insurance policy is designed to protect the homeowner and the persons that live in that home from certain liability claims. The most obvious claims would be ones wherein a third-party is injured in the home or on the premises as a result of some negligent act of the homeowner.
The coverage, however, may extend to things occurring not on the homeowner’s property. For instance, if the homeowner or resident of the home is involved in some non-business activity outside of the home and that activity results in injury to a third-party then that third-party may make a claim against the homeowner and that claim may be covered by the homeowner’s policy.
Homeowner’s policies are like most insurance policies and they cover what is called occurrences, i.e. accidents. To be more precise an accident typically is something that is not intended by the insured.
Automobile collisions that are considered to be the fault of the homeowner are not covered by the homeowner’s policy. Rather they would be covered by the automobile liability policy of that homeowner/driver.
For more information about liability claims review our Premises Liability section.
Excess exposure in liability claims needs to be dealt with promptly. If you are sued as a result of an automobile accident or other type of injury claim and the party that is suing you is claiming that you are responsible for their damages, then that claim should be immediately submitted to your auto insurance carrier or homeowner’s carrier.
If that insurance coverage that you have is not adequate, then you may want to consider consulting with counsel about what can be done to protect your assets.
Certain basic estate planning matters that may be considered for purposes of limiting your exposure is to make sure that your family home is titled in both your name and that of your spouse. Such titling is called tenants by the entirety. That titling protects that asset from any judgment that might be rendered against only one of you. If a judgment is rendered against both of you for the same claim, then that judgment may apply to the family home titled as tenants by the entirety.
Another thing to consider is that any vehicles that are operated by family members should only be titled in the name of one adult. If there is one adult in the family who is not the principal bread winner, then it probably makes sense to title the vehicle in the name of that person. The logic of that being that if a vehicle is titled in the name of both spouses then a judgment may potentially be rendered against both. Likewise, having the vehicle titled only in the name of the non-bread winning spouse avoids the possibility of the wages of the bread winning spouse being garnished if an excess judgment is entered against that person.
Of course, it always make sense to maintain adequate insurance coverage. The cost of maintaining a million dollar liability policy is not that much different than maintaining a $100,000 liability policy.
It is inappropriate to attempt to hide or move your assets for the express purpose of avoiding a creditor or potential creditor.
Limitations and Reporting Requirements
When you are involved in an automobile collision whatever claim you may have is governed not only by a statute of limitations but it may also be governed by certain reporting requirements based upon your liability insurance policy.
Statute of limitations are defined by state code and govern the amount of time you have after an injury to actually file and/or serve a lawsuit in order to stop the statute of limitations from running.
In addition to that there may be certain reporting requirements that apply based upon your own automobile insurance policy or whatever other policy may apply. Typically, what liability insurance policies call for is that the insured give seasonable notice to the insurance carrier after an injury occurs. The reason for that seasonable notice is to allow the insurance company to investigate the matter and to determine what their own position may be in terms of any potential liability. If you deprive the insurance company of that opportunity to promptly investigate the matter, then that may be a basis for the insurance company to deny coverage to you for that particular claim.
It is important to keep in mind not only the statute of limitations that may apply to your claim but also the reporting requirement that may apply based upon your liability insurance policy.
Brien Roche represents clients in all types of vehicle accident matters or accidents involving pedestrians. Mr. Roche has secured compensation for damages to clients involved in pedestrian accidents and accidents involving trucks, cars and other vehicles. With 40 years of trial experience, Brien Roche has garnered significant compensation for his clients. For a free consultation with an accident lawyer, complete the contact form on this page, or contact our office directly.