What happens if you are involved in a motor vehicle accident with a driver who has insurance but only maintains state minimum insurance coverage and that coverage is not enough to cover your vehicle damage and injuries?
Practically speaking, what can often happen is that if the damages or injuries are serious and apparent to the at-fault drivers insurance company, the at-fault drivers insurance will offer the “policy limits” in settlement.
What this means is that say the at-fault driver has $25,000/$50,000 liability limits of insurance. The at-fault driver’s insurance company, knowing that the damages and injuries are likely in excess of the coverage for their insured, may offer the maximum amount under the policy in settlement–that being $25,000.00 in the example here.
The obvious reason they may do this is because they can readily see their liability is in excess of the damage and injuries caused by their insured. This leaves you, as the injured party, in a position to either accept the settlement of the policy limits–which would require you releasing all claims against the driver and their insurance company–or reject the settlement and file a lawsuit against the at-fault driver.
If you reject the settlement and proceed to filing a lawsuit, a major consideration for any lawsuit is whether you could ultimately recover sufficient or even any funds from the at-fault driver. Even if the at-fault driver is clearly “at-fault” and their insurance company admits as much, proceeding to court and, ultimately, winning puts you in the position to still recover those funds from the at-fault driver.
For example, say you proceed to court and receive a $100,000.00 verdict against the driver. If the driver has little or no assets, you may potentially never recover the full $100,000.00 or it may take many years to recover even a fraction of the amount. Further, you may not even recover the amount that was originally offered to you of $25,000.00. Also, while there is no set rule on this matter: drivers with state minimum limits typically do not have a large amount of assets to protect–otherwise, their insurance coverage would typically be greater. Because of this, recovering money from them can be extremely difficult.
Uninsured Motorist Coverage in Colorado
If the above situation arose and you purchased uninsured/underinsured motorist coverage in Colorado, you first would want to put your own insurance company on notice of the possibility of a potential underinsured motorist claim. This is important for many reasons–but can be particularly important in the event that you accept the $25,000.00 settlement from the at-fault driver’s insurance company.
Most motor vehicle insurance policies require that you obtain permission from your own insurance company prior to settling with an at-fault driver–this clause is often referred to as a “consent-to-settle” clause. The rationale behind the clause is that your own insurance company wants to preserve its right to subrogate your claim. What this means, according to the example above, is that your insurance company must either give consent for you to accept the settlement with the at-fault driver’s insurance or your insurance company could substitute a payment of $25,000.00 to you and then proceed legally against the at-fault driver.
However, if notice is not properly given to your own insurance company prior to you accepting a settlement, your insurance company can deny any underinsured motorist claim you would make against them for the damage and injuries in excess of the settlement with the at-fault driver’s insurance company.
Boulder Car Accident Lawyers
If you or a loved one has been injured in a truck or car accident, contact the Boulder car accident lawyers at LaszloLaw today at 303-926-0410. Our Boulder car accident attorneys stand ready to assist you in this difficult time. Contact us today…we’re here to help.