QuestionHi,
My boyfriend was considered at fault in an auto accident this past May. Unknown to him at the time his car insurance lapsed and there was no coverage at the time of the accident. The other party's insurance (it was not her policy but someone else's for the car) claims injury, loss of work, and that the car was totaled. They said they paid her 1500 dollars for bodily injury. Months later they said they finally settled the car. That they totaled it and sold some of the parts. When we asked the car owner's insurance company for proof they said they did not have to give it to us. And when my boyfriend went to court the injured party showed up saying she was out of work for 3 weeks, etc (she walked away and denied medical at the scene). She was awarded 1000 dollars restitution. My question is this: Does the car owner's insurance company have to provide proof or is it against the law? And also, since the car owner's insurance company paid for bodily injury is restitution above and beyond that? I just do not want to see my boyfriend get in trouble for not paying the car owner's insurance but he does not want to without proof. Thanks.
AnswerHi Kristin,
This may sound like a simple case with so few facts recited, but leave it to attorneys (like Dr. Settlement) to make everything more nuanced. You state a few interesting facts that lead one to conclude that the best thing might be to (1) consult a legal services attorney (fee $40); and (2) to check with your insurance commissioner; and (3) possibly get some kind of agreement to pay over time.
Because you case is complex, with a number of diverse paths, I am going to give you and your boyfriend some extra time. BUT there are side considerations that we should look at before we even start.
First off is to take a careful examination of how the policy was cancelled. Each state has rules and regulations that govern the cancellation of auto insurance policies. So first, if this is at all a close issue, then check with your own state insurance commissioner http://www.settlementcentral.com/links.php
Second, consider consulting a legal services attorney. Call your state or local bar association to ask about a any kind of legal referral services or reduced fee group in the state. They will talk to your boyfriend for some reduced fee, such as $40 an hour. It would be well to get that attorney's understanding of whether or not the judge's restitution figure precludes the victim or her insurer from suing your boyfriend for more. I cannot guess at that from here, but I raise it since, as I will explain below, there is a possibility that the restitution hearing might be binding upon the victim and her insurance company.
A third thing to think about upfront is that your boyfriend has a potential risk of having his license suspended by the state. Your state is probably like all others in that it has a Department of Financial Responsibility. It is within the Department of Motor Vehicles or the Department of Licensing. Their job is to make uninsured drives who cause damages post financial responsibility for the damages they caused, AND thereafter to obtain for one or two years a special type of high risk insurance AND to file annually a form called SR22. You can Google that term to see how expensive that insurance is.
They send a letter to the driver (your boyfriend) and will suspend his drivers license if he does not post financial responsibility in the form of a cash deposit in a bank account that is secured for the benefit if his victims. Hence, it is ESSENTIAL to make his arrangement NOW, before the insurance company files an affidavit with the Department of Financial Responsibility. If he does not have that kind of cash, then he is best advised to cooperate fully now and seek to make payments over time.
There is a possibility that the judge's decision might preclude any claim for personal injuries above the $1,000 he ordered as damages. If you can get away with only paying that amount, then consider doing it.
Quick answer: make arrangements to pay the $1,000 (plus some amount for the car) over time if he can do so by signing a promissory note or a stipulated judgment that will allow the insurance and the victim to get a judgment against him if he should drop a payment. He must get full releases of all damages signed when he starts the payments and signs the agreement.
This is a cheap way to get off. Someone paid for her loss of work and medical costs, and for your boyfriend to sneak by with only $1,000 (plus some amount for the car) for all is a bargain.
Now, let’s take a look at your questions and some thoughts on whether or not that $1,000 COVERS PERSONAL INJURY damages that the victim could assert. OR, DOES IT ALSO INCLUDE PROPERTY Damages? I am guessing that the property damage element was not presented at the hearing, but if it was, then maybe your boyfriend could contend that the $1,000 IS RESTITUTION for all of the damages he caused.
Generally, the criminal or traffic case assessment of restitution is not binding upon the victim, and she and the insurance company could bring a separate action for her damages, including medical, lost wages, and general damages.
BUT in this case, all parties participated in a court hearing and the damages were adjudicated by the judge. If she or her insurance company were to try to sue your boyfriend later, he would claim that the first hearing was binding in determination of those damages. The term for that is res judicata. Google it and wiki it and you will see that it means that the prior hearing (i.e. the restitution hearing) could be considered as binding on all parties.
Should the car insurance company present your boyfriend proof of the damages on the car loss? Absolutely. Just have him tell the adjuster that he is willing to pay the damages so long as he has an estimate of damages made by the adjuster or by the auto body shop estimator. There is no obligation to pay anything until or unless they produce evidence of the damages.
It may be that sufficient evidence of the damages is simply to show that the value of the repairs were equal to approximately 75% of the value of the vehicle. If that is the case, then you are entitled to know the amount that they paid to the victim, AND you are entitled to know how much they received back in salvage sales.
Let me give you an example so you can see what I am talking about on damages. Let's say that her car had a fair market value of $4,000. Pretend that the repair bill estimate was $3,000. The vehicle would then be totaled. She would get the actual cash value, plus license fees and sales tax on a replacement vehicle (up to $4,000). So say she got the full $4,000 plus $500 in prorated fees and taxes, for a total of $4,500 paid to her.
She then transferred the vehicle to the insurance company, and they then sold it as a salvage vehicle or for parts. Let's say that they netted $800 off those sales. That means the insurance company is out of pocket $4,500 less what they received ($800), for a net payment of $3,700. That is what your boyfriend would owe.
But the insurance has to show you what they paid out. Otherwise, there is no obligation to pay a dime until the company produces proof of their losses, which they ought to be able to do pretty simply.
Does that make sense? I trust that extra time here and my efforts have been of value to you. And thus I would respectfully request that you find the feedback form on this website and leave me some feedback.
Best Wishes,
Dr. Settlement, J.D.
www.SettlementCentral.Com
