How Does Insurance Impact a Personal Injury Lawsuit and Recoveries in Washington State?
If you’ve been injured, or if a family member has died, due to the negligence of someone else, it’s important to understand how the availability of insurance may impact your case. This page discusses a number of key insurance aspects.
Vehicle Crashes – Minimum Coverages for Non-Commercial Drivers
In Washington State, non-commercial drivers are required to carry the following minimum amounts of coverage:
- $25,000 person and $50,000 per accident for bodily injury
- $10,000 for property damage
In vehicle crashes involving significant injury, these amounts are likely to be wholly inadequate to fully compensate those who are hurt or the families of those who have lost a loved one.
Commercial interstate truck drivers, on the other hand, are required to carry much higher limits (currently, federal law requires $750,000 in coverage, but this amount may be higher depending upon the types of cargo hauled). In addition, many trucking companies retain insurance with significantly higher limits, so that a single crash will not bankrupt the company.
Non-trucking companies and municipalities typically maintain insurance programs to safeguard their interests. Municipalities (like cities) are either self-insured, or insured in connection with commercial insurance carriers (the insurance programs typically vary depending upon the size of the municipality). The federal government is entirely self-insured.
What Happens When a Vehicle Lawsuit is Brought?
When a vehicle crash occurs, one of the first things that should happen is that the defendant should put his, her, or its insurance company on notice of the crash (and a potential lawsuit). Once the insurance company is notified of the claim, ordinarily this will trigger two separate duties – the duty to defend the insured, and the duty to indemnify the insured (the “insured” is the driver, and/or the employer of the driver, accused of being at fault for causing a crash).
In non-insurance language, the duty to defend means that the insurance company will need to retain a lawyer, if necessary, and to pay the lawyer to defend their insured. The duty to indemnify the insured means that the insurance company will have a duty to pay the amount of any settlement or judgment against the insured.
Both the duty to defend and the duty to indemnity are governed by the policy limits of the insurance. If damages exceed the policy limits, then the insured (and not the insurance company) will have to pay the excess amount over the policy limits. Similarly, the duty to pay legal fees may also reduce the amount of the policy limits.
Because of these duties, and because the insurance company will be “on the hook” for paying damages (at least up to the policy limits), the insurance company will typically assume control of defending a lawsuit (although a defendant – the driver or their employer – will have input in terms of how the case progresses if they may ultimately be liable. The exact rights and obligations that defendants and their insurance companies have with respect to each other are complex; what is important to know is that if the driver is insured, the insurance company will likely be very involved in the litigation (including settlement discussions).
Settlement Discussions with Insurance Companies
As a general rule, insurance companies are more likely to heavily contest liability and damages in cases where significant injuries were sustained, and/or where significant property damages have occurred, compared to those cases having minimal damages or only property damages. In cases involving matters such as death, paralysis, traumatic brain injury, and burn injuries, it can be expected that the insurance companies will vigorously contest liability and damages. In these types of cases, those injured (and their families) will benefit the most by retaining personal injury lawyers who are highly experienced in litigating (and taking to trial) serious personal injury and wrongful death cases.
Learning About Insurance Coverage
When we represent clients in car and vehicle crashes, we too will want to investigate to learn what insurance the other driver has. If others are potentially at fault (including other drivers, municipalities, and bars that overserve the drunk driver who caused the crash), we will also want to investigate to determine whether such people or entities have insurance.
Once we have identified all such parties and we have a better understanding about the assets and insurance of those who may be liable, we can then can advise a client as to whether the defendant(s) have meaningful assets available.
Unfortunately, statistics show that a huge part of the United States population has no emergency savings, and many Americans do not have the resources to pay an unexpected $1,000 cost. When car crashes occur that involve those who have no insurance (or have only minimal insurance) and no other meaningful assets, a huge issue occurs for the victims.
First, if substantial injuries have occurred, the medical bills alone may greatly exceed the insurance available. Because the driver will likely have no other meaningful assets from which a settlement can be obtained, the driver will be “judgment proof.” In other words, even if a large verdict is rendered against the driver, because the driver will likely be able to declare bankruptcy and thereby protect their assets from being taken to satisfy the judgment.
Second, if an insurance company (or Medicare) has paid medical bills, they will have a lien on any settlement proceeds (which means that they may get most or all of the insurance money paid by the other driver’s insurance company).
Third, if there is not the sufficient likelihood that attorneys will receive a fair fee for their time, there will be little incentive to accept a case.
When we discuss a case with a potential client, we believe that it is appropriate to be forthright about their possibilities of obtaining a recovery from all those who may be liable. In some cases, while a driver may be “judgement proof” beyond limited insurance, others may also be partially liable for a crash who may have assets.
Seeking Compensation from Your Auto Insurance Company or Others
When a driver who caused an accident is uninsured or underinsured (the insurance is not sufficient to cover all damages), there may nonetheless be an opportunity to recover against an accident victim’s own insurance company. Additionally, entities or people other than the driver causing the collision may also be at fault; if so, we will work hard to make such other entities or people pay what they owe.