- What is liability coverage?
A liability claim is premised on negligence. For example, if our client was rear-ended by an inattentive driver, we would bring a claim for negligence against the inattentive driver’s liability policy. Note that Nevada law requires every driver to carry liability policy limits of at least 25/50/20 ($25,000 per person/$50,000 per incident/$20,000 cumulative property damage).
Returning to our example, assume our client’s case value is $100,000 but the driver that rear-ended our client carried only the state minimum 25/50/20 policy. Theoretically our client could sue the at-fault driver for more than the $25,000 per person limit and pursue the at-fault driver’s personal assets but in reality drivers who carry minimum insurance policies generally have no significant assets to go after. Our client is out of luck unless he was insured with Under-insured-motorist (“UIM”) or Mepday coverage.
- What is Med-pay coverage?
Medical payments coverage (also known as Med Pay) pays for reasonable and necessary medical expenses resulting from an auto accident. One nice thing about Medpay coverage, unlike UIM coverage, is that it is NOT fault-based. If you are driving your vehicle down the road, and you drive into a brick wall, and the accident is entirely your fault, your med-pay coverage still applies.
Your med-pay coverage also extends to every passenger in your vehicle at the time of the accident. Each occupant of the vehicle may recover up to the medpay limit (there generally is not a per incident limit).
Like UIM coverage, Med-pay coverage is also not vehicle-specific. Once again, it follows you and your family to protect them in any accident involving an automobile. Also, auto med-pay coverage applies to auto v. pedestrian accidents and accidents which occur when you are not in your own vehicle.
Note that your UIM insurer is generally entitled to an offset for the amount of any med-pay coverage paid by them.
- What is the value of my car accident case?
There is a common misconception that personal injury claims are worth some multiplier of medical expenses incurred (e.g., “three times the total amount of the injured party’s total medical expenses”) This is completely false. In addition to total medical expenses, there are a number of other factors that affect claim value, including:
- The amount of damage sustained to the vehicle claimant occupied
- Whether or not the claimant had preexisting injuries
- Whether or not the claimant was partially at fault for the incident
- Whether or not the claimed injuries are objectively verifiable (visibly or through medical testing);
- Wage loss on behalf of the claimant
- Pain and suffering sustained by the claimant
- Egregious behavior on behalf of the at-fault driver (e.g., drunk driving, street racing, etc.)
Common sense dictates that different people will accord different value to intangible concepts such as pain and suffering. Thus, an attorney could theoretically present the exact same case to two different juries and receive two different results. This uncertainty is one of the risks of taking a case to trial.
One of the most important responsibilities an attorney has in handling a car accident case is to ascertain all applicable insurance policies from which the client might recover as well as the maximum amount that may possibly be recovered from each policy (the maximum amount recoverable under a given policy is known as the “policy limit”). It is often the case that an injured person is entitled to compensation from more than one insurance company in a single car accident. For example, a passenger injured in a two-vehicle collision in which both drivers are partially at fault is potentially entitled to recover from the insurance policies of the following parties:
- The driver of the vehicle the passenger occupied (liability);
- The driver of the vehicle the passenger did not occupy (Liability);
- The owner of the vehicle the passenger occupied (UIM or Medpay);
- The owner of the vehicle the passenger did not occupy (Liability);
- The passenger’s personal auto insurance policy- even if the passenger’s vehicle was not involved in the accident (UIM or Medpay);
- A relative with which the passenger resides (Resident relative UIM or Medpay)
Unfortunately, it is often the case that a claimant’s “claim value” exceeds “all potential sources of recovery. This is because most drivers carry only the state minimum 15/30 liability policy ($15,000 per person / $30,000 per incident). It is for this reason carrying UIM and Medpay coverage is so important (see discussions on UIM and Medpay above).
- Is it possible to recover more than the at-fault driver’s policy limits?
In theory, if your case is worth more than a defendant’s liability limits, you may recover the amount by which your claim value exceeds the defendant’s policy limits. For example, if the defendant has only $15,000 in liability coverage, and your claim is worth $50,000, in theory you may recover $35,000 from the defendant personally. As a practical matter, however, it is rarely the case that a plaintiff may recover from a defendant personally (because defendant’s with significant assets generally carry adequate insurance coverage). Not all hope is lost however; see the discussion on “bad faith” below.
- What is “insurance bad faith”?
“Bad faith” is a theory of liability. A liability insurer has a legal obligation to settle a third party claim within policy limits when there is a substantial likelihood of recovery in excess of those limits. Such a duty is implied in law to protect the insured from exposure to liability in excess of coverage as a result of the insurer’s gamble, on which only the insured might lose. An insurance company who unreasonably refuses to settle a third-party claim for an amount within policy limits becomes liable to its insured for a judgment in excess of policy limits. The theory is that the insurance company had the opportunity to settle the claim but refused, and any judgment in excess of the policy limits was therefore caused by the insurance company’s refusal to settle. In addition to the excess judgment amount the insurance company is potentially liable for punitive damages, attorneys’ fees, and costs.
- I was involved in a Nevada car accident. Can my auto insurance raise my premiums if I was not at fault?
Pursuant to NRS 687B.385 insurance companies cannot cancel, raise premiums or refuse to renew insurance policies on account of auto accidents in which their insured is not at fault.
Pursuant to State, Div. of Ins. v. State Farm Mut. Auto. Ins. Co., 116 Nev. 290, 995 P.2d 482 (2000) you must be less than 50 % at fault to claim the benefit of N.R.S. 687B.385.
- I was involved in a car accident in which a police vehicle was at fault. May I sue the police?
Yes; however, Nevada’s Waiver of Sovereign Immunity Statute provides that recovery against any governmental entity is limited to $100,000 in damages:
41.035. Limitation on award for damages in tort actions. 1. An award for damages in an action sounding in tort brought under NRS 41.031 or against a present or former officer or employee of the State or any political subdivision, immune contractor or State Legislator arising out of an act or omission within the scope of the person’s public duties or employment may not exceed the sum of $100,000, exclusive of interest computed from the date of judgment, to or for the benefit of any claimant. An award may not include any amount as exemplary or punitive damages.
An interesting UIM (“Under Insured Motorist”) coverage issue arises in the sovereign immunity context. A UIM insurer’s obligation to pay UIM benefits is triggered where the insured is legally entitled to recover from an adverse driver but the adverse driver’s liability limits are “insufficient to extinguish that liability.” NRS 687B.145(2).
In White v. Continental Ins. Co., 119 Nev. 114, 65 P. 3d 1090 (2003), the Nevada Supreme Court addressed the question of whether an insured who sustained more than $50,000 in damages (the limit on sovereign liability at the time) in a car accident caused by a government vehicle was entitled to UIM benefits. The Court ruled against the UIM claimant. If the plaintiff had taken the city to trial the plaintiff’s legal recovery would have been limited to $50,000. Thus, the court reasoned, this was a situation in which the defendant’s liability was capped and not one in which the defendant had insufficient insurance to “extinguish that liability.”
- I was involved in multiple car accidents. Will the second accident affect my first case?
To recover bodily injury compensation a plaintiff must prove not only that a defendant was negligent, but also that the defendant’s negligence caused the plaintiff’s injuries. Thus, the defendant in your first car accident case might argue that you are unable to prove which of your injuries were sustained in your first car accident, as opposed to your second car accident, and that you therefore are unable to prove your case.
Assuming your “Accident 2” injuries were sustained to parts of your body different than those injured in “Accident 1,” proving which injuries were the result of Accident 1 shouldn’t be an issue. In fact, it is often possible to prove apportionment even where the same body part was injured in both incidents. This is frequently accomplished by comparing medical imaging scans (such as MRIs) that occurred between the first and second incident with scans conducted subsequent to the second incident.
A more interesting issue arises if you are able to prove you injured the same part of your body in both Accidents 1 and 2, but unable to prove the extent to which the injury is attributable to each incident. In this situation the burden of proof as to apportionment shifts to the defendants. If the defendants are unable to prove the extent to which their respective negligence contributed to your injuries, then each defendant is jointly and severally liable for the entirety of your injuries (assuming liability can be established as to each defendant).
- I was injured in a car accident in which the at-fault driver was not the owner of the at-fault vehicle. Who’s liability policy applies?
The vehicle owner’s liability coverage will provide primary liability coverage, and the driver’s liability insurance policy will provide secondary liability coverage.