by melissawagoner » Sat Aug 28, 2010 03:59 am
I just received a letter from Progressive (my insurance) and GoldbergOsborne that an I accident I was at fault for 18 months ago could cost $65,000 (what GO recommends the woman I hit settle for).
Attached is a list of medical costs of $11,000 and another $1,000 in car rental and mileage expenses. Where is the additional $53,000 coming from?
I carried $15,000 on my BI (AZ minimum) and she was insured at the time (AZ requires $15,000 un/underinsured).
I am a teacher making less than $40,000 per year, and have no assets to speak of other than my state retirement, which I can't access for another 25 years.
I don't understand the insurance/lawyer game, can you help me?
Attached is a list of medical costs of $11,000 and another $1,000 in car rental and mileage expenses. Where is the additional $53,000 coming from?
I carried $15,000 on my BI (AZ minimum) and she was insured at the time (AZ requires $15,000 un/underinsured).
I am a teacher making less than $40,000 per year, and have no assets to speak of other than my state retirement, which I can't access for another 25 years.
I don't understand the insurance/lawyer game, can you help me?
Posted: Sat Aug 28, 2010 07:16 am Post Subject:
Where is the additional $53,000 coming from?
I'd need to speculate here as not all of the info was provided...I'm guessing that the other party has made a demand in the amount of $65,000. To put this into perspective... I'm surprised the demand was not for $1,000,000. That is, the initial demand is always some pie in the sky number that no one things is appropriate. I could go one for hours why the plaintiff might as well ask for some huge number, that it's just some stupid number but lets just say that its part of the "game".
Now, your carrier has a legal obligation to let you know that the demand being made is in excess of your policy limits. If they don't, you could sue your own carrier for bad faith if an excess verdict was every awarded. So they are telling you that they have this demand and it's in excess of your limits. I think you'd agree that the amount of the person's loss does not seem to warrant a $65,000 demand. I think you'd be correct.
Your carrier will do everything possible to settle the injury portion of the loss (that $1,000 in rental is not a part of this) for your $15,000 Bodily Injury limits. There are no promises though.
What happens is that your carrier will not pay one penny without the other person signing a release. The release states that they agree to no longer pursue you in anyway for the payment. If the other person's medical bills are $11,000 then I'm guessing that your carrier is going to offer your $15,000 limits pretty darn quick. If the other attorney does not want to accept, then your carrier would defend you in court. This expense is separate from your $15,000 limit. That is, your carrier may spend $50,000 in your defense and then still only offer the $15,000 limit. Now... do you have a few million in the bank? I'm guessing not. So why would the other attorney spend time and money to take you to court just to get an excess verdict and end up with the $15,000 and the ability to go after you? The attorney will have spent several thousands of dollars and a boat load of time (which is money) just to get that $15,000 that was offered to start and the ability to perhaps one day get a few more dollars from you. Trust me... injury attorneys are not going to waste their time. They'd much rather spend a couple of hours on the case, take 33% of $15,000 and then go after their clients UIMBI coverage (another easy score).
Part of the issue is that don't think AZ law states that your carrier has to tell the other attorney what your limits are. So as far as this attorney knows, you have $100,000 in BI coverage. So he/she is making up some large number because he/she does not know your policy limits and/or because he/she does not want the UIMBI carrier to think his client's claim is only worth $15,000. That is, if he asked for $15,000 because that is your limit, then his clients UIMBI carrier might see that and argue that no UIMBI money is owed as even the attorney said his client's claim was only worth $15,000. Does that make sense?
Posted: Sat Aug 28, 2010 12:26 pm Post Subject:
Trust me... injury attorneys are not going to waste their time. They'd much rather spend a couple of hours on the case, take 33% of $15,000 and then go after their clients UIMBI coverage (another easy score).
Words of wisdom from tcope! And not only that, but many personal injury lawyers have never actually tried a case, relying on the fact that insurance companies really don't want to go to court either, so they simply write checks up to one's policy limits.
tcope is also right, why didn't they sue for $1,000,000? Well, looking at the law firm's website, they tend to go after deep pockets, and you don't have them, so they used a number that included about $50,000 for "pain and suffering" and other crapola . . . of which they would get 33% or more.
Figuring you might have $100,000 coverage, they're asking for actual expenses (to which the plaintiff is entitled) plus about half of your policy limit. So when they discover you have only minimum limits, as their client probably does, too, this should resolve rather quickly . . . for $15,000.
And their client will walk away with almost nothing (after being told about $25,000-$30,000 in the $65,000 scenario), since the medical bills were probably paid for by an insurance company which has subrogation rights (the right to recover from a third party settlement/insurance company). So if we take away the lawyer's $5000, that leaves $10,000 to pay $11,000 worth of medical bills. If the health insurance company agrees to take only 50%, they get $5500, too, leaving just $4500 for the plaintiff. But the health insurer could demand 100% of its claim, and agree to take only the $10,000 available, leaving the plaintiff with zero. [The health insurer doesn't even have to sue, they just sit back, wait for an award or settlement, then make their demand on their insured (the plaintiff), since they can't come after you.]
As a teacher, you might appreciate the larger "lesson" in this is: get a quote for the difference between your minimum $15,000 coverage and something more appropriate, such as $100,000. You will be surprised that the cost is probably a mere $10-$20/month more than you've been paying. The sleepless nights you're probably experiencing won't occur in the future.
Posted: Fri Sep 10, 2010 12:40 pm Post Subject:
Even when $100,000 seems a bit tough try and stay closer to that rather than going for a min $15000. Shop for the right kind of benefits that suit your pocket.
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