When I am evaluating a case for a new client who has been injured in a motor vehicle collision, one of the first questions I’m asked is: How much insurance did the other driver carry on their auto policy?
This is a critically important component of every personal injury case. The ability to obtain a favorable recovery often hinges on the amount of insurance available to cover my client’s claim for bodily injury.
Determining the limits of liability coverage on the other driver’s auto policy is not always a straightforward matter. It requires an understanding of the obligations imposed by Virginia law on both insurance companies and injured claimants.
The importance of liability coverage
Under the common law of Virginia, when a negligent driver injures another motorist or pedestrian, the injured party may bring a civil lawsuit and request that the judge or jury award damages. The claimant’s damages are based on the injuries and their impact on their life – not how much insurance the defendant carried. As a practical matter, however, the claimant’s ability to make a successful recovery usually hinges on how much insurance is available to cover any potential damages.
Therefore, when assessing the value of a client’s case, not only do I need to know the full amount of his or her damages, but I also need to know how much liability insurance the at-fault driver carried. My client’s own policy may provide uninsured/underinsured coverage to further pay for damages, should the other driver’s policy fall short.
For reference, underinsured/uninsured coverage is further discussed here, and it’s good news! There have been recent changes in this law, and it benefits the plaintiffs – those who have filed claims after they’ve been injured through no fault of their own.
Investigating the defendant’s coverage limits
Step 1: Police Crash Report
One of the first tasks in investigating a new case is to obtain the Police Crash Report. This is usually completed by the responding officer shortly after the collision, which the officer then files with the DMV. The officer routinely collects each driver’s insurance information and records it in the Police Crash Report. While this report provides us with the name of the at-fault driver’s insurer (State Farm, Geico, Progressive, etc.), it does not provide us with the amount of coverage on the policy. In other words, does their policy have coverage limits of $30,000, $50,000, $100,000, or more?
Step 2: Minding the statutory requirement to disclose insurance limits
Virginia law protects injured people from defendants who may not be inclined to disclose the full amount of their liability coverage. At the pre-litigation stage, there is a statuary requirement that forces the disclosure of the at-fault driver’s coverage limits
Under Va. Code § 8.01-417(C), an insurance carrier is required to disclose its limits of liability coverage once an injured party or their attorney provide the following information:
- The date of the motor vehicle accident
- The name and last known address, if known, of the at-fault driver
- A copy of the accident report
- The claim number
- The claimant’s medical records
- Medical expenses or lost earnings totaling at least $12,500
Once this information is submitted, the insurance carrier has 30 days to disclose the limits of any policy that may provide coverage to the at-fault driver. Interestingly, the carrier is required to provide the coverage limits of a policy even if the insurance company takes the position that the policy does not apply to the claimant’s case.
Exception to the $12,500 rule
What if the injured party hasn’t incurred medical expenses or lost earnings that total $12,500? There is one other instance in which the insurer must nevertheless disclose its coverage limits. If the at-fault driver was charged with driving under the influence of alcohol in the collision, giving rise to the claimant’s injury, then the carrier is required to disclose its limits even in the absence of economic damages of $12,500 or more.
Limitations to the disclosure rule
The framework set out in Code Section 8.01-417(C) can be very helpful to injured parties in Virginia. However, the statute lacks some “teeth” which would make it more effective and useful for injured claimants.
Issue 1: Lack of penalties
Though the insurance carrier is required to respond to the claimant’s request for limits disclosure within 30 days, there is no penalty for its failure to do so. I have experienced many situations in which I sent a request for disclosure with all the information required by the statute but was simply ignored—even after the 30-day deadline had passed and I had made follow-up inquiries. Under the current version of the statute, there is no remedy available for the insurance carrier’s failure to comply.
Issue 2: Lack of support for smaller recoveries
As noted above, the procedure is not available unless the claimant has incurred at least $12,500 of economic damages, or the at-fault driver was charged with driving under the influence. There are many cases in which the damages are not as severe and the defendant’s conduct is not as egregious, which would nevertheless benefit from early disclosure of the liability limits. Unfortunately, the procedure is simply not available to these claimants.
Final step: Interrogatories and subpoenas
Once a lawsuit is filed, we can issue interrogatories to the defendant. These are written questions that must be answered under oath. The defendant would be required to identify all applicable auto insurance policies and the amount of coverage on each. We can also issue subpoenas directly to the insurance carrier, which obligates them to provide the same information, including a copy of the policy itself.
However, not all cases require that a lawsuit be filed to reach a successful resolution. And if a lawsuit is filed, it is often not addressed until many months following the collision.
Once we have used the available statutory framework to confirm the amount of insurance coverage available, we can make a variety of strategic decisions to position our client for the best possible recovery. For example, this information can influence:
- Whether to file a lawsuit
- Which court to file in
- Whether our client’s own auto coverage will provide any additional coverage
- Decisions involving settlement versus trial.
At Allen & Allen, we specialize in identifying and pursuing all potential insurance policies applicable to every case. It is our mission to pursue the best possible resolution for each client. If you or a loved one has been injured through no fault of your own, we are happy to provide a free case evaluation. Call today at 866-388-1307.