Under Florida law, it is possible for an at-fault driver to be liable for damages that exceed the limits of his or her insurance policy. While that option is available, often the at-fault driver is not financially able to provide the amount needed by the injured party, especially in a short amount of time. Recently, we wrote about the need for UM coverage on your own policy, in the event an at-fault driver has no insurance or inadequate coverage to pay for expenses incurred from lost wages and medical bills. A recent published opinion, Kropilak vs. 21st Century Ins. Co., (No. 14-13837), provides insight into alternate ways to pursue payment from the at-fault party’s insurance company when the damages far exceed the policy limits.
In this case, a man was injured while he was on his motorcycle after a woman made an improper left-hand turn in front of him. The motorcyclist’s injuries were severe enough to need a helicopter transport to the hospital. The woman reported the crash to her insurance company, which sent her a letter emphasizing the policy limits. In this letter, the at-fault driver was advised she could be held liable for anything in excess of her limits of $10,000, and the insurance company would not be responsible for this excess liability. The woman was advised she could retain her own counsel. After receiving notice of the injured person’s identity and hospital expenses that were over three times the policy limits, the insurance company mailed a settlement check for the policy limits to the injured man’s attorney. This was not cashed or formally accepted.
Following this event, the insurance company retained counsel to represent the at-fault party’s interests under her policy. As you may know, as part of an insurance contract, the insurance company agrees to indemnify or act on behalf of the insured in the event of an accident. This attorney, once retained, advised the insurance company that the damages suffered by the injured person could reasonably be expected to fall between $150,000 and $300,000. Follow-up was conducted with the injured person’s attorney regarding the check and settlement offer, but no response was provided for over a year. After a year, the injured person’s attorney sent a letter to the at-fault party’s attorney to address the “failure to settle this claim.” The attorney offered to settle with a consent judgment against the woman for $150,000, which would limit the woman’s personal liability and protect the insurance company from a possible “bad faith” claim, which could subject the insurance company to additional, separate liability from the accident.