I have lost count of how many times a client tells me that they have “Full” coverage for their car but they only have “Limited” coverage that is a barrier to their being fully compensated for their injuries, their pain, and suffering. In Pennsylvania, car insurance sellers are required to offer their customers “Full Tort” coverage. Nevertheless, they soft sell this in favor of “Limited Tort” coverage because, by selling Limited Tort they are reducing insurance buyers’ remedies in the event they are injured in a car accident. Sometimes there is not even any doubt about the other driver’s negligence – such as when they are struck from behind – in a “rear-end” accident – but they risk getting a poor remedy for their losses or no remedy at all, because they purchased “Limited Tort” Coverage and not “Full Tort” Coverage for their car or truck.
In New Jersey, the law is similar but worse for drivers who purchase the “Cheaper” and less effective motor vehicle insurance coverage. In New Jersey, the two types of car insurance are “Verbal Threshold” and “Zero Limit.” These differences are only in degree of impact to the injured driver. The results are the same, with exceptions, the injured driver with inferior insurance is prevented from recovering for “Non-Economic” Damages – for pain, suffering, and lost life pleasures. Many times, the driver will not have high or any past medical costs, or projected future medical costs, or lost wages or earnings. In such cases, where Limited Tort (for Pennsylvania) or “Verbal Threshold” (for New Jersey) applies, the injured plaintiff, possessing this substandard insurance will be denied a remedy – they can be denied any recovery.
I have successfully obtained high value settlements and recoveries even where clients have chosen the wrong coverage – in both Pennsylvania and in New Jersey. However, you should know what you are purchasing and get the best coverage; the dollar difference is not very significant and may save you a loss in the future.
You should also purchase Underinsured Motorist (“UIM”) coverage and Uninsured Motorist (“UM”) coverage when you purchase car insurance. If you own multiple vehicles, you should “stack” this coverage.
For example, I represented a Nurse Midwife who received an emergency call while she was driving on the highway. She did the right thing. She pulled over to a turnpike designated emergency safety area. She put on her car’s emergency flashers to warn traffic on the roadway that she was stopped OFF the turnpike roadway. However, a driver was not paying attention and pulled off the roadway and rammed her vehicle at high speed, causing her serious injuries. Fortunately, she had chosen Full Tort insurance and therefore there was no question that she could present pain and suffering and other non-economic damages to be fully and fairly compensated for the injuries caused by the negligent driver. However, that driver only had $25,000.00 in insurance coverage available under his policy – called “bodily injury” (“BI”) coverage. The driver did not have money or assets of his own to pay for her damages, which exceeded this available coverage limit. The truth is that it is a rare event that the negligent driver has sufficient personal assets that will pay for all the damages in such matters. For this reason, it is important to have Underinsured Motorist coverage for these instances. In this case, the Midwife’s car insurance provided for $100,000.00 in Underinsured Motorist Coverage for these matters – where damage is caused by a negligent driver who does not have sufficient bodily injury car insurance coverage to pay for the full damages caused by his or her negligent motor vehicle operation.
Moreover, the Midwife’s car insurance coverage was “Stacked” on four cars. This multiplied her Underinsurance Coverage amounts, $100,000.00, by the number of cars on the insurance policy. Stacked coverage provided her with $400,000.00 in insurance coverage for her damages. For very little extra money in premiums, you can increase your damages by multiples through “Stacked” insurance coverage.
Recently, I won a Plaintiff’s verdict for my client where the jury awarded him $225,000.00, all for pain and suffering and lost enjoyment of life’s pleasures. My client, a 77-year-old single man, was injured in a multi-vehicle collision that occurred on a snowy morning on a state highway, a local roadway maintained by the Pennsylvania Department of Transportation (“PennDOT”). The chain of car collisions started when a Subaru slid out of control and drove up onto a concrete median, which divided the road traffic, which traveled in opposite directions. The Subaru was stopped on the median; but its rear was in the opposing traffic’s left lane. The incident occurred right when a Honda SUV was driving in that lane and the Honda crashed into Subaru’s driver side, with an impact that caused the Subaru to careen back into its driver’s original traffic lanes. However, the Subaru was inoperable and its body splayed across the roadway for that travel lane. This occurred right before my client’s vehicle, a Saturn, came through an overpass, which preceded the accident area, presenting him with a Sudden Emergency that caused him to take evasive action that led him to lose control and become stranded onto the same concrete median. However, unlike the Subaru driver, my client was an experienced commercial driver who retired from driving trucks for a living. His Satern was a stick shift and he controlled, as best as he could, his deceleration as he reached the concrete median that divided the opposing traffic. However, as he drove onto the median, which was only 4 to 6 inches in height, his low clearance Saturn’s drive train was damaged and rendered his Saturn stranded on the concrete median. Before it stopped in the left lane, however, my client’s Saturn scraped along a KIA SUV that was stopped behind the Honda/Subaru collision area. That KIA driver also claimed injuries which he blamed on my client’s alleged negligent driving.
Fortunately, my client was not injured in this collision or by his drive onto the median area. Police responded to the scene and started to clear the roadway with their police SUV cruisers by pushing the stranded vehicles out of travel lanes. The traffic started to flow again. But, despite police presence, an Acura SUV driver was driving too fast and slammed into my client’s disabled Saturn while my client was inside it, waiting for his kids to pick him up before the Tow Truck came for his car. The impact caused my client to injure his knees and back and left shoulder. He also suffered a concussion when his head hit the driver’s side window; but he did not lose consciousness. Because he was retired, he did not suffer any lost income. His medical treatment was not extensive and all of his medical costs were paid by his own insurance’s Personal Injury Protection (“PIP”) coverage or his personal health insurance, which was paid at a significantly discounted rate. In short, his damages were all for non-economic losses, his pain and suffering from the accident date to trial, any future pain he would continue to suffer, and his loss of enjoyment of life’s pleasures. Fortunately, my client had full tort insurance coverage. He also had Uninsured Motorist (“UM”) coverage. This is coverage that pays your damages when you cannot identify the motorist that struck your vehicle – which occurs not infrequently – or when the striking vehicle’s driver did not have valid car insurance at the time of the accident. Where that negligent driver does not have any economic resources, even when the driver is negligent, you may be without a real remedy. You could be awarded a million dollars, but you will be unlikely to collect it. This is why you should have Uninsured Motorist coverage for your vehicle. And it worked to provide a remedy for my 77-year-old retired client when his stranded Saturn was rear-ended by the “Phantom” Acura that could not be identified. My client’s car insurance provided UM coverage, stacked on three vehicles, at $25,000.00 per vehicle. Therefore, he had $75,000.00 in available coverage for this accident, through his own Uninsured Motorist coverage. Moreover, his “Second” accident occurred in a separate event from the “First” accident, which started with the Subaru causing a separate collision and then blocking the roadway which, in turn, required my client to take emergency action to miss the stranded Subaru which blocked his lane of travel. Before trial, we were able to recover damages in a settlement from the Subaru carrier’s insurance and a separate settlement from my client’s Underinsurance Carrier. In short, we were able to recover both settlement from the Subaru driver’s carrier, my client’s Underinsurance coverage, and a jury verdict that awarded my client damages in excess of his available Stacked, Uninsured Motorist coverage of $75,000.00.
Such situations and others like them occur through “Insurance Bad Faith.” Insurance carriers possess a fiduciary duty to use good faith and fair dealings with their insured in resolving insurance claims. This duty applies to all types of insurance, to motor vehicle insurance, homeowners’ insurance, to life insurance, and other insurance sold in Pennsylvania. This duty exists through court decisions and by legislation, the Pennsylvania “Special Damages” Statute, 42 Pa. C.S. § 8371, “Actions on insurance policies”, which states that “In an action arising under an insurance policy, if the court finds that the insurer has acted in bad faith toward the insured, the court may take all of the following actions: (1) [it may] Award interest on the amount of the claim from the date the claim was made by the insured in an amount equal to the prime rate of interest plus 3%; (2) Award punitive damages against the insurer; [and, it may] (3) Assess court costs and attorney fees against the insurer.”
My client, the Midwife’s case, provides an actual example where Insurance Bad Faith damages were obtained through a settlement. She obtained the striking vehicle’s total policy coverage of $25,000.00 and made an Underinsured Motorist (“UIM”) claim, under her own motor vehicle policy which provided $400,000.00 in UIM coverage through stacked $100,000.00 UIM coverage on four insured vehicles. However, despite presenting her insurance carrier with information about her injuries and her losses, which included projected lost earnings capacity damages, my client’s insurance carrier offered her only $50,000.00 for her UIM claim. We rejected this offer and took her insurance carrier to task at an arbitration (required by her policy) where she was awarded over $1 Million in damages for her injuries, far in excess of her $400,000.00 in UIM coverage. We then sued her insurance carrier for Insurance Bad Faith and ultimately received another $400,000.00 in resolution of her Insurance Bad Faith claims. In short, because she possessed Underinsured Motorist (UIM) coverage, my client was able to recover $825,000.00 in damages for a crash where, if she did not have UIM coverage, she would only have received $25,000.00 in damages for injuries far more significant than what this coverage was presented for as compensatory damages. My client also received a formal letter of apology as a condition for settlement.
Insurance bad faith occurs where an insurance carrier’s actions and decisions used to deny or limit an insurance claim “lack[] a reasonable basis” and where the insurance carrier knew or has “recklessly disregarded” facts that substantiated the insurance claim because of a lack of a reasonable basis in its decisions. Turletsky v. Prudential Prop. & Cas. Ins. Co., 649 A.2d 680 (Pa. Super. Ct. 1994). “Bad faith on the part of [an] insurer is any frivolous or unfounded refusal to pay proceeds on a policy; it is not necessary that such refusal be fraudulent.” Atiyeh v. Nat’l Fire Ins. Co., 742 F.Supp. 2d 591 (E.D. Pa. 2010).
Motor vehicle cases are often viewed too superficially. You have many levels for recovery. In fact, you may even obtain, in certain matters, multiple recoveries from separate UM and UIM policies for the same accident. If you or someone you know have been injured in a motor vehicle accident or if you are being unfairly treated by your own insurance carrier, you should call us, we can help.
