Many times I am asked to represent clients who have been in accidents with someone who has either insufficient insurance to cover the damages or no insurance at all.
If you are injured or have property damage that exceeds the total amount of coverage that the defendant has, then you have a couple of options.
1) You can go ahead and get a judgement against the defendant who has insufficient insurance. This will most likely result in a judgement that is uncollectable or discharged in bankruptcy.
2) You can make a claim with your own insurance company under the uninsured or underinsured provision of your policy. With this option, you try to get as much of the insurance coverage as you can from the defendant, then look to your own policy for recovery of the balance of the claim.
Option number two can create additional problems. There are three things to keep in mind when making a claim with your own insurance company:
1. You must give timely notice to your insurance company that you may be making a claim under your underinsured or uninsured motorist policy provision.
Your failure to give notice to your insurance company of the possibility of making a claim may result in the denial of coverage by your insurance company. Get a written confirmation of that claim so that it can’t be denied later for failure to provide timely notice.
2. The insurance company has a right to put an arbitrary cutoff date for you to file your claim, so be on the lookout for notifications about this.
Even if you are in an accident that allows you to bring a lawsuit within two years under state statute, most insurance policies have a one year claims period for uninsured or underinsured coverage. Pay attention to letters that notify you of the claims period. If you miss the deadline, you lose the right to make a claim.
3. You cannot stack insurance policies.
For example, if the defendant has a $20,000 policy and you have a $100,000 policy, and the total claim is worth $150,000, the total amount of coverage you are going to have between your insurance policy and the defendant’s insurance policy is going to be $100,000. You don’t get to add or stack the two policies. $100,000 is the total amount that is payable to the accident, whether it partly comes from the defendant’s other insurance or all from your own insurance.
Bottom line, if you think you are involved in an accident with someone who doesn’t have enough insurance, simply give notice to your own insurance company about the accident and the fact that you may make a claim. This will go a long way in ensuring you get a full recovery for your damages.