QUESTION:
My car insurance said that my policy cover may not be enough to cover the damages. What should I do? A month ago I hit a pedestrian, I did not know I hit her until heard a noise on the second door on my right. I am fully covered but my insurance said that my insurance policy might not be enough since its only 50,000/100,000. What should I do? Is there a source I can go to?
ANSWER:
No matter how severe the injury, top settlement value is necessarily limited by the financial resources available to satisfy the claim. Thus, the policy limits and defendant’s personal assets must be taken into account in determining what the case can settle for. Barring evidence of collusion to shift an unfair share of liability to a more “fiscally worthy” defendant, relatively low settlements in comparison with the damages at stake and the settlor defendant’s then-apparent proportionate liability may be deemed in “good faith” in light of the settlor’s financial condition and insurance policy limits. “[A] disproportionately low settlement figure is often reasonable in the case of a relatively insolvent, and uninsured or underinsured, joint tortfeasor.” [Tech-Bilt, Inc. v. Woodward–Clyde & Associates]. Thus, e.g., a policy-limits settlement, though disproportionately low in comparison to the settlor’s then-apparent liability, is in “good faith” if the policy effectively amounts to the settlor’s only “asset.” [Schmid v. Super.Ct. (Sargent), supra—$55,000 policy-limits settlement in good faith in $500,000 damages case, because settlor had no other assets; County of Los Angeles v. Guerrero, supra—in light of settlor D’s “modest financial condition,” $30,000 policy-limits settlement in $1 million damages case held in “good faith” even though clearly disproportionately low compared to D’s more than 50% culpability.
Even if a punitives award is entirely reasonable in light of the nature of the misconduct and the amount of actual injury, harm or damages suffered, it can be so disproportionate to defendant’s ability to pay as to make the award excessive for that reason alone. However, without evidence of defendant’s financial condition, a reviewing court can only speculate as to whether the punitives award under challenge may be excessive. Each side must recognize the other’s problems and constraints in concluding a settlement. Many of these are inherent in virtually all bodily injury claim negotiations. Plaintiff’s lawyer must recognize the settlement constraints on the defense side. California State Law provides that insurance carriers are prohibited from extending coverage, or paying for, punitive damage assessments against their. Thus, unless the insured- defendant has substantial personal assets, the true value of the claim is only the actual damages a jury will award. It would be best to seek personal assistance from a lawyer in order to help you with your personal injury case.
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