QuestionQUESTION: Hi Jane,
There was an accident approximately one year ago in the state of California. A family member was killed in this accident. It has been clearly established that the other party was at fault. We have an attorney. To date the insurance company of the owner of the vehicle involved in the accident has not"officially" released policy limits nor have they offered a settlement for the policy limits.
The owner of the vehicle was not the driver. My question to you is, if the vehicle owner's insurance is not sufficient,(no amount would be enough)and the driver of the vehicle was also covered by insurance, could we collect on the driver's insurance as well?
Our insurance agent says yes and was the one who suggested it and our attorney says no. I do not want to be dependent upon them for these answers. Is there a statute in California that spells out how this is done?
I very much appreciate your answer,
Diane
ANSWER: Hello Diane,
A couple of issues here.
First on the differences of opinion between your agent and your attorney. I'm not sure the distinction is as simple as it might seem on the surface. Here are my thoughts.
Most states allow for primary and secondary coverage. In that regard, the vehicle owner's policy would be primary, and if those liability benefits were exhausted I would think you could go after the actual driver's policy for secondary benefits. But since I am neither an attorney nor a CA law expert, you would want to discuss that further with your attorney. In any event, my educated guess would be that there might be some secondary coverage through the at fault driver.
This explanation would seem to support also what your agent said, that there might be an opportunity to collect from the driver's coverage. But there might be some legal complications to that.
What is normally most applicable in these cases is your Uninsured/Underinsured (UM# coverage. In CA, UM is written into all policies unless you reject it. If your family member had UM coverage it could be relevant.
In UM, to collect - and it is always through your own insurance company - the other driver has to be at fault. That condition seems to have been met. But CA is somewhat unusual in its distribution of UM benefits. If your UM coverage is equal to the at fault party's liability coverage, you cannot collect your own UM even if the liability coverage is inadequate. So, for example, if your relative had the minimum UM of $15,000 per person and $30,000 per accident, and that matches the other driver's liability (BI) limits, nothing is owned under the UM. On the other had, if your relative had, say $30,000/$60,000 UM coverage and the other driver had $15,000/$30,000, your relative could collect under their own UM coverage.
If there is UM coverage available, you need to discuss this with your attorney.
What I am concerned about from an insurance standpoint is the fact that one year has passed and the liability carrier has not made an offer. In one year? I find that troubling. Working with your attorney, you need to determine why - in one year - an insurance company cannot make an offer or reach a decision. Again, very perplexing and concerning in my opinion.
I did some research for you - sorry for the delay - and I found the CA UM law. Here is the link for that.
http://codes.lp.findlaw.com/cacode/INS/1/d2/3/1/2/s11580.2
It is long and involved. I would suggest that any questions about CA law and civil procedures should be discussed directly with your attorney. That's what the attorney is for.
Be proactive.
My sympathies for your loss. I wish you well.
Jane Pytel
http://InsuranceExpertAdvice.com
http://SolutionsForYourInsuranceClaim.com
http://FloridaAutoInsuranceCentral.com
---------- FOLLOW-UP ----------
QUESTION: Jane,
Thank you for your answer. I am aware of UM/UIM but if the "unofficial" policy limits of the other insurance are true, our UM/UIM is less and would not kick in.
Unfortunately in California there are no laws requiring a third party insurer to ever disclose the policy limits or offer settlement unless legal action is brought by us and and then they must provide for discovery and the settlement process can be initiated. When I am finished with this insurance nightmare I am going to our state representative and see what we can do to change laws concerning this.
Thank you for you effort in answering my question,
Diane
Answer Hello again Diane,
I am not attempting to engage in a legal discussion with you, or to dispute your discourse with your attorney. Speaking from an insurance standpoint, however, following are sections from the CA Fair Claims Settlements Practices. CA is no different other states which require insurance companies to conduct fair, reasonable, and prompt claims investigations and claim settlement offers.
Here is the link to your SUBCHAPTER 7.5 FAIR CLAIMS SETTLEMENT PRACTICES
REGULATIONS:
http://www.caiia.com/pdf/fcspr_clean.pdf
Please refer specifically to Section 2695.7. Standards for Prompt, Fair and Equitable Settlements (see pg 10).
Jane Pytel
http://InsuranceExpertAdvice.com
http://SolutionsForYourInsuranceClaim.com
http://FloridaAutoInsuranceCentral.com
