January 4, 2012
Third Party Lawsuits and Uninsured Motorist Coverage
A "third party" is the legal term for anyone other than your employer or co-workers who is responsible in some manner for your injury. Recovery in a third party case is dependant upon the establishment of the third party's liability for the harm done.
Damages recoverable include past and future medical expenses, past and future wage loss, as well as past and future pain and suffering.
The significant difference between the third party liability system and the workers' compensation system is the potential for an unrestricted recovery in the third party suit. The workers' compensation system provides automatic benefits for work related injuries, however, those benefits are restricted.
A significant consideration in a third party case is the defendants ability to pay for the harm done. Generally, it is the defendant's insurer who pays for the loss. If the defendant has little or no insurance, this would trigger the potential for an uninsured/underinsured motorist claim, if the third party suit involves a motor vehicle accident.
Uninsured Motorist Coverage
Most motor vehicle accidents are caused by uninsured and/or underinsured drivers. With uninsured/underinsured motorist coverage (also referred to as UM/UIM) your auto insurace carrier is obligated to step into the shoes of the responsible party and compensate you for all the damages you suffered that would otherwise be recoverable from the uninsured/underinsured motorist, up to the limits of your coverage.
UM/UIM motorist coverage is essential to provide financial security and protection for you and all members of your household. It is relatively inexpensive and it is coverage which is mandated by the Insurance Code of the State of California.
The beneficiaries of your UM/UIM coverage include the named insured and all family members residing in the home. Everyone who qualifies is entitled to recover all damages that would have been available in the third party suit, up to the limits of coverage.
UM/UIM motorist coverage applies anytime you or a family member (residing in your home) is harmed by an uninsured/underinsured motor vehicle. You do not have to be occupying your insured vehicle to be covered. For example, you can be the driver of a car you do not own, a passenger in another vehicle, riding a bicycle, walking or even in a taxi. As long as you are injured as the consequence of the negligence of an uninsured/underinsured motorist, you are entitled to coverage.
While your insurance company is compelled by Insurance Code Section 11580.2 to provide you with UM/UIM coverage, it is up to you to secure sufficient and adequate limits for your financial protection. It is imperative that you review your policy and if you are not satisfied with your UM/UIM limits you should call and inquire about having them raised. With the rising cost of medical care we urge you to carry – at a minimum – $1,000,000 in UM/UIM coverage. If your insurer cannot secure limits acceptable to you, you may want to consider switching providers.
UM/UIM claims are handled differently than a typical third party lawsuit. These claims are handled through arbitration. While this may seem disadventageous, the fact is that your insurance company owes you a fiduciary duty to handle your matter with the utmost care and good faith. A third party insurer does not bear this level of responsibility to you. Your insurance company is obligated to promptly evaluate your claim and make a reasonable offer.
If you and your insurance company do not reach an agreement with regard to the value of your UM/UIM motorist claim, then you proceed with arbitration. The arbitration is usually conducted within six to eight months of the filing of a Demand for Arbitration. The matter is heard by a retired Judge or senior attorney experience in motor vehicle personal injury matters. The result of the arbitration is binding.
Uninsured/underinsured motorist coverage is perhaps the most important coverage of your automobile policy. By ensuring you have sufficient limits in your UM/UIM coverage you are essentially insuring yourself against every other driver wherever they pose a threat to you. Unfortunetly this section of your policy is often times the least understood and can be overlooked. Don't expect your agent to maximize this coverage for you, take it upon yourself to review your auto policy and make sure that you are satisfied with your UM/UIM coverage.