We have written in the past about the practical difficulties that insurance can create in personal injury cases. In many situations, a case may be strong legally, and a victim entitled to significant damages, but because of limitations on the amount of insurance, the recovery available to a victim may be limited, even if a jury finds that a victim should receive more than the insurance policy limits.
Problems With Insurance Limits
In some cases, insurance policy limits may not matter. Large companies will usually have large policies and significant assets and revenue to pay any judgment that may be entered against them. Thus, a victim may not have to worry about whether he or she will ever be able to collect on a large judgment entered in his or her favor.
With smaller businesses, and most often, in car accidents, liability limits can create real problems. There is no requirement that a car owner carry any liability insurance, and thus, no requirement that if they do, that they carry any minimum limit. Plenty of drivers are on our roads, driving legally with policies that max out at $10,000.
That means that if they injure you on the roads, and you sustain a serious, catastrophic injury, the most you will see from that defendant is $10,000 (assuming the defendant is not a wealthy individual capable of paying a judgment on their own, without insurance). That is even if a jury awards you more. As an aside, you can get an underinsured motorist policy that will add to that amount to help in making you whole. But even then, many UM policies may not be sufficient to fully compensate a victim for a catastrophic injury, or to compensate a family for the death of a loved one.
How Bad Faith Insurance Can Help
Florida does have one avenue that provides a limited, restricted way that a victim can obtain additional insurance moneys, even beyond the insurance policy. Florida’s bad faith insurance laws are set up to try to ensure that insurance companies act towards victims and insureds fairly and in good faith.
Florida’s bad faith insurance law requires that where an insurance company knows that the value of an injury or claim far and clearly exceeds the value of the insurance money available, the insurance company must immediately tender the full amount of the policy.
So, taking a simple example, if a drunk driver rear ends someone and kills them, and the driver only has a $10,000 policy, the insurance company likely would have to immediately tender the entire policy because it is almost certain that a jury would award way beyond that amount. The law does not require someone who has a claim with a value of, say, a $1million, to have to fight for a year and go to trial just to get $10,000 when it was clear from the beginning what the outcome of the case would be.
Of course, insurance companies may dispute what the value of a claim is and what the value is. A rear-end accident that causes a death may clearly have a $1mil value, thus requiring a tender of a $10,000 insurance policy, but a T-bone intersection accident that causes a death may not, because of disputed liability issues inherent in those kinds of accidents. Someone who is made a quadriplegic as a result of an accident may clearly have an injury that exceeds a $10,000 policy, unless that person was not wearing a seat belt, in which case the insurance company can argue that comparative negligence will limit its amount of liability.
When Insurance Does Not Tender
In most cases, an insurance company that sees the value of a claim far exceeds the value of a small policy, will simply tender the policy. For a victim that has sustained a catastrophic injury, this is a shallow victory. That policy limit will usually not come close to full reparation for the injuries sustained.
But sometimes, insurance companies do not tender the policies immediately. When they do not, they may be liable for acting in bad faith. When an insurance company acts in bad faith, they can be held liable for the full value of the victim’s injuries, regardless of the policy limits, as well as attorney’s fees.
Attorneys seeking to put insurance carriers on notice of bad faith must file a bad faith notice with the state, which is then sent to the company. The insurance company then has 60 days to investigate the claim. During this time, it may cure the problem, and pay the policy and avoid any bad faith claim. But if it does not, and a jury verdict is obtained that exceeds the policy, the insurer may be liable for bad faith.
If that happens, the victim may file a separate, bad faith lawsuit against the insurer, seeking the full value of the damages awarded, plus attorney’s fees. It is important to note that even in a standard injury case, attorney fees are usually not awardable, whereas in a bad faith case they are. Thus, a bad faith claim actually allows an injury victim to recover more than what is available in a standard injury case.
The issues in the bad faith case will be whether a prudent insurance company in the same position would have looked at the facts presented, and tendered the policy. If so, the victim will be entitled to full recovery.
Bad faith verdicts are difficult to obtain, and not available often. But when they are, they can be a powerful mechanism for a victim to recover amounts beyond smaller policy limits.
Do you know all the avenues of potential recovery in a catastrophic damage injury case? Contact the attorneys at Brill & Rinaldi for a free consultation, and for advice as to how to maximize recover for your injuries.