Insurance companies play a crucial and inevitable role in nearly every personal injury case we handle. Insurers negotiate settlements, shoulder defense costs, and pay damages when required. Auto insurance carriers pay the replacement cost of a car totaled in an accident; homeowners’ carriers reimburse property owners for fire damage; commercial insurance companies pay the medical costs of injuries caused by employees of their insured.
In all of these cases, insurance companies only have an obligation to pay claims and damages up to the limits of the policy. Once those limits are exceeded, the liable party, not its insurer, has responsibility for paying any remaining damages due to the victim. This blog will explain how insurance policies and their limits work, as well as discuss the ways in which you may be able to recover additional damages from a liable party beyond the scope of insurance policy limits.
Understanding Insurance Policy Limits in Florida
Regardless of the type of insurance, policies cover property damage and liability. Whether you are purchasing auto insurance, homeowners’ insurance, or commercial insurance for a business, your insurance carrier will ask how much coverage you want. Generally speaking, you pay a higher premium for more coverage.
In some instances, you will be required to purchase a minimum amount of coverage. Florida is a so-called “no-fault” auto insurance state where, to register a car, residents must carry a minimum of $10,000 of personal injury protection (PIP) coverage and $10,000 of property damage liability (PDL) coverage. This insurance covers personal injury to the driver covered by the insurance, and liability of the driver for property damage he causes.
When you have a car loan or you have leased a car, the institution that financed the transaction typically requires full coverage, including collision insurance, and also typically requires higher liability limits. Similarly, your mortgage company might require specific coverage amounts on your residence that ensures you against liability for injuries visitors may suffer on your property.
The formal name for the amount of insurance coverage that you buy is the policy limit. If you file a claim or an injured person files a claim against your policy, your insurance carrier will only pay damages up to your policy limit. For example, let’s say you own a restaurant and a patron slips in the bathroom, hits her head on the tile floor, and sustains a traumatic brain injury. The patron decides to sue you for $500,000 for medical expenses, lost wages, and more. Your commercial policy limit is $350,000. If the court rules in the plaintiff’s favor and awards $500,000, your insurance company will only pay out $350,000. You are responsible for the remainder of the damages.
Seeking Additional Compensation
After you have exhausted your PIP policy limits or a liable party’s insurance carrier has paid your claim, exhausting their policy limits, you may have a few more options to recover the remainder of the damages the liable party owes you. An experienced personal injury attorney can advise you on the best course of action for your situation, but your options may include:
Claiming Against Multiple Parties
In some cases, more than one party might share liability for your injury and accompanying damages. This brings multiple insurance policies and carriers into play, giving you the opportunity to recover additional compensation for your injuries. Some types of cases that might have more than one responsible party include the following:
- Motor vehicle accident cases. When multiple vehicles are involved in an accident, more than one might be responsible for the accident and injuries.
- Commercial vehicle accident cases. If a commercial vehicle driver’s negligence causes an accident, victims may also sue the trucking company or other business who employs the driver.
- Product liability cases. If a defective product causes an injury, any party in the product’s chain of distribution might be share liability with the manufacturer. This includes distributors, wholesalers, and retailers. When the defective product is a prescription drug, salespeople, doctors, and pharmacists might also share liability.
- Medical malpractice cases. When a medical professional doesn’t uphold a legal obligation to provide a certain standard of care, the provider might be held liable in a Florida court. Others involved with the event(s) that caused injury, as well as the associated facility or hospital, might also be named as defendants.
- Premises liability cases. If someone intentionally harms you on another party’s property, both the perpetrator and property owner might be liable. Property owners must maintain and safe environment for visitors and might be held liable for poor security.
Filing a Claim on an Umbrella Policy
An umbrella policy is additional liability coverage over and above a standard policy. Homeowners don’t often have umbrella policies, but large corporations and businesses often have an umbrella policy that pays benefits when the damages from an accident or injury exceed the policy limits of other insurance policies. In any case, it is important to find out exactly what policies liable parties have so that an attorney can guide you on the best course of action.
For example, suppose you sue a grocery store chain for $1,000,000 because you slipped and fell and sustained a traumatic brain injury. The grocery store chain has $750,000 in liability coverage and a $500,000 umbrella policy. If the court finds in your favor and awards $1,000,000 in damages the store’s insurance carrier will exhaust the $750,000 limit of the standard liability policy. The umbrella policy will come into effect and the carrier will pay out $250,000 on that coverage.
Direct Recovery from the Liable Party(s)
In the event that you aren’t able to file additional lawsuits to seek additional compensation, nor are you able to collect damages from a defendant’s umbrella policy, you may have to attempt to directly collect damages from the defendant. Unless the defendant has extensive assets to sell or ample amounts of money in the bank, collecting additional compensation directly from the defendant is not always an easy task. If the defendant has the ability to pay, but refuses, you might have some recourse. In these cases, you can go to the court for enforcement of a judgment. An attorney with experience enforcing judgment liens can help you in this case.
Bad Faith of the Insurance Carrier
Insurance companies notoriously deny claims for dubious reasons as a way to protect their bottom line. Consumers have an expectation that when they pay premiums for a policy, the carrier will provide the coverage when someone is injured. When they fail to do so, it leaves the insured and injured victims facing devastating costs from a serious injury.
In some cases, an insurance company’s delayed processing or denial of a claim is a result of them acting in bad faith. When a consumer buys a policy and signs a contract with an insurance carrier, the carrier breaches the contract when they fail to act in good faith.
Florida law prohibits insurance companies from acting against bad faith; however, carriers will still go the extra mile to avoid paying claims and sometimes those denials are against the law. Below are some examples of an insurance company acting in bad faith that might affect personal injury victims:
- Purposefully delaying the investigation or processing of a claim
- Providing an unreasonable interpretation of policy to avoid paying damages
- Delaying payment for an unreasonable amount of time
- Unreasonable denial of a claim
- Refusal to offer explanations for full or partial claim denials
- Refusal to partake in settlement negotiations
In Florida, you might have a bad faith claim against an auto insurance company because of the state’s no-fault insurance laws, but in other personal injury cases, it is the defendant who might have a claim. Although a defendant must make a bad faith claim against an insurance company and they also hold the burden of proof to show their insurance company has acted breached their contract, a plaintiff seeking additional compensation needs a skilled personal injury attorney to assess the situation.
If the defendant files a bad faith claim against their carrier, and the court rules against the insurance company, not only will the insurance company have to pay out on the policy, but the company might also be ordered to pay additional losses. When insurance companies deny claims they leave defendants open to personal liability, requiring you to directly collect damages. As mentioned above, this isn’t an easy task.
If you are seeking additional compensation for injuries and you or your attorney suspect bad faith on the part of the liable party’s insurance company, you have no recourse because you don’t have a contract with the defendant’s carrier.
In addition, not all insurance company denials constitute bad faith under Florida law. Your attorney, however, may be able to use the prospect of a bad faith judgment to convince an insurance company to “play fairly.” Insurance carriers know the law, and the simple mention of a bad faith claim sometimes motivates them to settle or pay if you have a strong case with reasonable demands. This creates a complex, and sometimes awkward situation, where the original plaintiff and defendant have common interests. These cases require the finesse and expertise of an attorney that understands your rights to seek additional compensation and understands bad faith claims.
Additional Compensation and Workers’ Compensation Insurance
Workplace injury claims work much the same as any other claim, but some differences do exist, so they deserve special treatment. If you are injured on-the-job, your first course of action is usually to file a workers’ compensation claim with your employer’s insurance carrier. Florida employers are required to carry workers’ compensation insurance. If yours does not, immediately contact an attorney for advice on your next steps.
Unlike other insurance policies, worker’s compensation benefits rarely cover all of your losses. In fact, benefits only cover two-thirds of a worker’s average weekly salary and medical expenses related to their injury. Worker’s compensation insurance doesn’t have traditional policy limits like other insurance; maximum weekly or lifetime benefits serve as that limit.
Even when receiving these benefits, employees might face financial hardship because they aren’t fully compensated for lost wages. Additionally, workers’ compensation insurance does not cover non-economic damages like pain and suffering, loss of consortium with a spouse, or any other damage that might apply to a particular case. Yet, in the vast majority of instances, you cannot sue your employer.
To obtain additional compensation to make up for lost wages not covered by workers’ comp and seek non-economic damages, you may have to file a lawsuit against a third party. Some examples of third-party lawsuit scenarios that might result in additional compensation beyond workers’ compensation benefits include:
- Your job requires you to work at a property or job site owned by a party other than your employer.
- You were injured in a traffic accident caused by another driver while you were on-the-job in a company vehicle.
- You were exposed to toxic substances in the workplace, leaving the manufacturer to share liability with others for illness or injury.
- A piece of defective machinery at work causes injury, once again leaving the manufacturer potentially liable for damages.
If you sustain a serious injury at your workplace, consult with an attorney who can guide you through the workers’ comp claims process, handle any denials or a reduction of benefits, and advise you on if or when you should pursue a third-party lawsuit for additional compensation.
Let an Experienced Lawyer Help You Obtain Full and Fair Compensation
The skilled legal team at Dolman Law Group in St. Petersburg has years of experience representing victims in personal injury cases, resulting in the recovery of millions of dollars in damages for our clients. We are here to protect our clients’ rights to full and fair compensation for their injuries and to advocate for them during the claims process and settlement negotiations. When settlement is not an option, we are prepared to aggressively litigate our clients’ cases in the courtroom.
Regardless of the path a case takes, we will always diligently pursue the best possible outcome. Email the Dolman Law Group in St. Petersburg at (727) 222-6922 for a free consultation to learn your rights to seek additional compensation when insurance policy limits have been exhausted.
Dolman Law Group
1663 1st Ave S.
St. Petersburg, FL, 33712