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Toll Free: 866-299-0558

Accepting Policy Limits In A Personal Injury Case

Cory M. Jones
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Representing injured victims throughout Henderson and the surrounding Las Vegas area since 1993.
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One question that I have received numerous times from clients over the years is, “Can we go after the personal assets of the person who hit me?”  This question usually comes up when we are discussing a policy limits offer from the insurance company of the negligent driver.  In this situation, one of two scenarios is playing out:  1)  The policy limits are insufficient to fully compensate the client; and/or 2) We are preparing to make a claim against my client’s Underinsured Motorist Policy (“UIM Policy”).  My clients usually feel (and rightly so), that it is unfair that their injuries are not covered by the policy of the other driver.  As a result, they will inevitably ask if we can pursue the other driver’s personal assets.  Over more than a quarter of a century of practice, the answer to that question has always been an emphatic, “No.”  There are several good reasons for this.

First, in the vast majority of cases in which there is insufficient insurance, the negligent driver maintains the state minimum limits of insurance.  This usually indicates the negligent driver has no assets to protect and likely lives paycheck to paycheck.  That being the case, it would require years of wage garnishment to fully compensate the client.  This would require “chasing” the negligent driver from job to job and place to place as they try (as they almost certainly would), to avoid paying the judgment and having their wages garnished.  Additionally, unless alcohol was involved, a judgment of this type is dischargeable in bankruptcy.  This means that the full amount of the judgment, less the insurance policy amount, would essentially disappear once the bankruptcy was completed.

Second, the client assumes the insurance company will pay out the policy limits immediately, allowing them to then pursue the negligent driver.  Insurers carry two duties:  the duty to indemnify (pay a judgment or claim), and the duty to defend (pay for an attorney to defend you if you are sued).  Unless the insurance company receives an executed Release of All Claims, they will not (and cannot) settle the case.  This means the client will have to proceed to trial and obtain a judgment.  Only then can the insurance company pay out the policy limits.  Going to trial and litigating the case will almost always require incurring significant costs.  Likewise, the negotiated contingency fee usually goes up once suit is filed and/or the case goes to trial.  It is very likely the client could end up with less money than they would have had they accepted the policy limits initially.

Lastly, in the event there is UIM coverage, it makes no sense not to accept the policy limits from the negligent driver and proceed to collect against the client’s own insurance company.  Clients are so hesitant to make a claim against their own insurance company.  They always assume their premiums will go up.  As I have discussed in a prior blog post, this is not the case.  Nevada law precludes an insurer from raising premiums solely for making a claim when there is no fault on the part of their insured.  Not using UIM benefits is like paying for health insurance and insisting on paying cash rather then allowing a doctor’s office or hospital to bill their insurance.  No one would even consider doing this.  However, the insurance industry has done a masterful job of scaring people into believing they have to pay exorbitant premiums without ever using the coverage.  This is why it is critical that you have an experienced personal injury attorney to represent you throughout the claim and litigation process.

In the event you have UIM coverage but choose to pursue the negligent driver above and beyond their policy limits, you may not be able to access your UIM benefits unless and until you have collected the full amount of the judgment against the negligent driver.  You may also have an offset in that amount which means you may not be able to obtain your own policy limits which could have fully compensated you for the injury you sustained.

There may be a time to pursue a negligent party’s personal assets.  However, that would be a very rare case.  Always seek out an experienced personal injury attorney to help you navigate your automobile accident claim.  Let Jones Wilson’s experience help you get the maximum recovery possible on your claim.

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