Woodland Hills personal injury lawyer Barry P. Goldberg is an expert on all things Uninsured and Underinsured Motorist. That expertise includes Uninsured and Underinsured Motorist Coverage and Arbitration issues. Recently, a potential new client with a very strong liability and damage case consulted with Mr. Goldberg and asked “Am I capable of handling my own Underinsured Motorist case?” The answer may surprise you.
What is “Underinsured Motorist” coverage?
One of the reasons that Underinsured Motorist coverage is so confusing is that you will not find it clearly marked in your insurance policy booklet or even in the declarations page that explains all of your coverages. Rather, underinsured motorist coverage is a creature of statute that operates out of and is a sub-set of your “Uninsured Motorist” coverage! So, if you have Uninsured Motorist coverage (and you should!), you may have Underinsured Motorist coverage available to you.
Why do I say “may?” Because determining whether you have Underinsured Motorist coverage is a simple mathematical calculation. First, you determine the amount of the per claim limit on your Uninsured Motorist coverage. Next, you determine the amount of the per claim limit on the third-party (at-fault) liability insurance policy. Next, you subtract the amount of the third-party limits from the amount of your Uninsured Motorist coverage. The result is the amount of “Underinsured” benefits you have available.
There are exceptions and applications that make this simple calculation less—well— simple. For example, if there are multiple third parties at-fault, or if the are numerous claimants. In these circumstances, it is my opinion that the Underinsured Motorist claim is not ripe to be handled by the claimant and competent and experienced legal counsel is required.
Proper Documentation of the Third-Party Settlement for Underinsured Motorist
When you are able to settle with the third-party (at-fault) driver’s insurance company, many personal injury attorneys will tell you that you are not qualified to document that transaction in order to sufficiently qualify for an underinsured motorist claim. I disagree. Documentation should be relatively straight forward as long as you know the rules.
First, the settlement of the third-party claim must fully and completely “exhaust” the available third-party liability policy limits. In order to “exhaust” those limits, you must find out what those limits are. For a settlement, you will need a copy of the liability declarations page and a statement from the at-fault party that there are no other available insurance policies to satisfy the claim. This inquiry includes owners of the vehicle and any excess or umbrella policies.
Once the amount is sufficiently established, then you must prove that you have been paid. A copy of the settlement check is the best evidence of payment. You will forward a copy of that check along with the proof of the amount of available third-party coverage to your Uninsured Motorist insurer in order to establish that you are qualified for an underinsured motorist claim.
I always ask for a written acknowledgement from the insurer that it has accepted the proof as unequivocally establishing that an underinsured motorist claim has been properly made. If an insurer refuses to acknowledge that you have satisfied all of the requirements for an underinsured motorist claim, then it is once again time to engage competent and experienced counsel.
Proper Presentation of the Damage Portion of Underinsured Motorist Claim
On most simple cases, an insured is capable of providing the proper damage materials which would allow an insurer to evaluate the underinsured motorist claim. It is very logical. The insurance company will need your medical records, bills, out of pocket expenses and loss of earnings documentation. Make it complete. Do not hold anything back. Sign medical and employment authorizations if necessary.
If the case is large enough, the insurance company may settle the claim with you. Or, you may be in a position to negotiate if the value of your case is admittedly less that the extent of your Underinsured Motorist coverage limits. With any substantial amount of medical bills or requirement to repay a health insurance company lien, I strongly urge potential clients to hire a competent and experienced attorney. The attorney is much better suited to negotiate the liens and provide instant value on the claim. In many cases, the attorney fees will be justified (and theoretically) paid out of the lien reductions!
If there is a Disagreement as to Underinsured Value, Time to Hire an Attorney!
Handling an Underinsured Motorist case pre-supposes that there will be a reasonable agreement as to valuation of the claim. In fact, many “agreements” as to valuation occur as a result of the inadequate available Underinsured policy limits. If the case is very valuable, and if the Underinsured limits are small, the insurer may well agree to you those available limits.
In addition, insurers often will negotiate for a slightly lower settlement because they know you will not be paying out an attorney. I still think that such a settlement is possible as long as the insured makes a proper and intelligent “business decision” about what he or she will “net” in recovery. While I do not approve of insurance companies essentially squeezing unrepresented parties, it still may make sense for an insured to settle the case rather than pay a large attorney fee.
However, if there is a disagreement as to valuation of the case, it is time to immediately hire and experienced Underinsured Motorist attorney. In my experience, injured insureds are not able to successfully demand an Underinsured Motorist Arbitration, litigate the case, and eventually arbitrate the case. After all, attorneys should be good for something, right?
If an injured insured tries to become the litigation lawyer on an underinsured motorist case, there are so many pitfalls that the scope of this article cannot address them all. Suffice it to say, the insurance company will be holding all the cards and will ruin an otherwise great Underinsured Motorist case!