No matter what the circumstances surrounding your Montgomery car accident injuries, you can almost always be assured that you will be in for a fight with an insurance company.
It’s rare that an insurer will simply pay out the policy without any challenge. This is especially true if you are seeking compensation from more than one source – as you are perfectly entitled to do. Still, insurance companies will seek to use this to offset the scope of their own liability. Sometimes they are successful. However, as the recent Indiana Supreme Court case of Justice v. Am. Family Ins. Co. shows, many times, they are not.
Insurers often bank on the belief that you won’t fight back, that you will accept the first offer they make. We are committed to fighting for full and just compensation – from all potential sources – for our injured clients.
In the Justice case, matters were complicated by the fact that the plaintiff was on the job when the injury occurred.
According to court records, an underinsured motorist crashed into a city bus, which was driven by the plaintiff. As a result of this collision, the bus driver sustained serious injuries and permanent partial impairment.
The plaintiff first pursued a workers’ compensation claim, as he was working at the time of the crash. He was granted a total of $77,500, most of it for payment to medical providers and about $26,000 for lost wages, temporary permanent disability and permanent partial disability. The city’s insurer asserted a lien against the worker’s bodily injury claim, and that lien was later settled for about $5,500, which meant his net workers’ compensation claim was valued at about $72,000. He then received $25,000 from the at-fault driver’s insurer. This brought his total recovery for damages to about $97,000.
At the time of the crash, the driver also carried an underinsured motorist coverage, that allowed for coverage of up to $50,000 per person and $100,000 per accident. (In Alabama, the minimum amount of underinsurance coverage a company can offer is $25,000 per person.)
The plaintiff sought $25,000 in compensation from his insurer, based on the $50,000 policy limit, minus the $25,000 he had collected from the at-fault driver’s insurance company. His insurance company denied coverage, citing the other $72,000 he’d collected in workers’ compensation benefits. The firm indicated that this offset the insured’s $50,000 policy limit.
The plaintiff then filed a lawsuit against his own insurer for breach of contract.
Initially, the trial court granted the insurance company’s motion for summary judgment. The plaintiff appealed. An appellate court sided with the plaintiff, citing that even if the setoff applied, the plain language of the policy required that it be applied against his total damages – not the policy limit. That ruling was affirmed by the state’s supreme court.
The court did not specifically answer the question of whether a motor insurance company could apply the insured’s workers’ compensation recovery as a set-off against the policy limit.
A recent Alabama Bar Association publication underscored that while an insurance holder is not required to exhaust the liability limits of the at-fault driver before seeking underinsured motorist benefits, the insurance carrier is entitled to set-off of the full liability limits (per Adkinson v. State Farm Mut. Auto Ins., 1994). However, it was noted that “the insurer is entitled to only set off the limits of the tort-feasor’s automobile policy.” Medical pay benefits (such as through workers’ compensation) can be deducted from the uninsured or underinsured motorist benefits – but only if the policy specifically allows for this deduction.
Call Allred & Allred P.C. at 334.396.9200 to speak with a Montgomery personal injury lawyer.
Justice v. Am. Family Ins. Co., March 13, 2014, Indiana Supreme Court
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Drunk Driving Killing Innocent Motorists in Alabama, Sept. 20, 2014, Montgomery Car Accident Injury Lawyer Blog