Auto Insurance, Recovery And Policy

Potential clients often want to know what their injury claim is worth, however this issue can be vastly different from what they can recover. Insurance policies, amounts of coverage, and vicarious responsibility can often play a bigger role in an injury victim's access to compensation than the seriousness of their injuries. Another issue is how the injury client has health insurance (if at all). Many clients are surprised to learn that their health insurance plan has a right of reimbursement out of their personal injury claim. How this issue is handled can greatly impact the client's net recovery.

Many clients tell us they have "full coverage" without truly understanding what that mean or what their policy coverage limitations are. A typical auto insurance policy is a bundle of different coverages sold together. For some, it is easier to understand their auto insurance coverage by unbundling it. Auto insurance policies often include Bodily Injury Liability, Property Damage Liability, and Uninsured/Underinsured coverages. Basically, Bodily Injury Liability coverage provides insurance for the insured driver when that driver injuries another through negligent driving. It does not provide any coverage for the driver's own injuries sustained in crash. Similarly, Property Damage Liability coverage provides insurance to pay for damage to cars, property, and some other things when the insured driver damages property of another when that driver damages property through negligent driving. Again, this coverage provides insurance for harm the insured driver causes to other people's property and it does not indemnify the insured's losses. On the other hand, Uninsured/Underinsured coverage may provide compensation to the insured driver for the insured's own losses. However, an important checklist must be satisfied in all cases before this coverage applies. As a result, the injury victim is often looking at the at-fault driver's liability coverages for their recovery (and not their own insurance). Of course, what can be frustrating is not knowing how much liability insurance the at-fault driver has or what to do in the absence of this information. Based on the numerous cases that we have handled and our combined legal experience spanning over thirty years, we can provide insights and options to clients during their initial case evaluation to strategize their options so as to limit their exposure to being stuck with damages and bills that the at-fault driver may not have insurance coverage sufficient to pay.

So what is "full coverage" and what does it pay? Many people insure their car for Collision coverage. This coverage pays to either repair your car following a collision or to provide a lump sum of money to cover the car's Actual Cash Value if it is totaled in a collision. Since a vehicle depreciates with time and use, the Actual Cash Value can be less than what may be owed on it. This is what "gap insurance" covers but gap policies are tricky concerning making a claim and the unknowing can easily get excluded from coverage. At a minimum, open your gap claim and get your gap insurer involved in your collision coverage loss before accepting your auto insurance company's Actual Cash Value payment. Comprehensive auto coverage provides insurance for damage or loss of your car that is not due to a collision, such as theft, fire, flood, etc. Again, this coverage is usually limited to the Actual Cash Value of your vehicle and may leave a gap between what it is worth and what is owed. "Full coverage" is a term used to refer to the combination of collision and comprehensive coverages. As a result, "full coverage" has nothing to do with providing the insured with bodily injury compensation.

Is there auto insurance beyond "full coverage?" Yes, there can be; possibly significantly more. Some states have PIP coverage (Personal Injury Protection). California is not a PIP state. However, California auto policies include optional coverage for Medical Benefits Payments ("MedPay") and auto policies that provide PIP coverage may be interpreted to include MedPay for California losses. MedPay coverage varies from auto insurer to auto insurer. Some policies pay for medical bills for the treatment of injuries arising from a collision while other policies only pay for the out of pocket cost of healthcare treatment for injuries arising from a collision after the insured's health insurance pays for the treatment (thereby only providing coverage for co-pays, deductibles, etc.). MedPay is optional coverage and not everyone buys it. Additionally, MedPay is capped by an amount of coverage purchased such as $5,000 or $10,000. This means that if the treatment costs exceed the coverage limit, then the victim may be exposed to pay for medical bills in excess of his or her MedPay coverage limit. There are other optional coverages beyond "full coverage" such as extended benefits, wage earner disability benefits, essential services benefits, death benefits, and more. Like MedPay, the scope of these optional and unusual insurance coverages is particular to each insurance company.

We encourage prospective clients to bring their insurance "Declarations Page" with them to their initial case evaluation so that their insurance coverages can be identified and explained. This information is also useful when the amount of the at-fault driver's insurance coverage is unknown.