One of the most difficult parts of dealing with personal injury cases is having to tell a client that the other driver (whose actions may have very well changed their lives forever) might not have enough insurance to cover their injuries.
In a literal sense, this doesn’t stop you from pursuing your claim in court, but at the same time, people are required to carry auto insurance for a reason — there are very few of us who simply have the money sitting around to cover an expensive judgment against them.
Unfortunately, this doesn’t always mean that the insurance companies play by the rules, as they are supposed to. Insurance contracts are complicated creatures that take on an entire area of the law unto themselves, but suffice it to say that any number of factors can result in an insurance company going to court and seeking a declaratory judgment against their own insured that basically says they do not have to cover the losses they caused.
For instance, if the other driver’s actions fall under the heading of what is known as “willful and wanton conduct,” then many insurance contracts include provisions that, in these circumstances, they don’t have to provide coverage.
Does this mean that they can just back out at any time? Fortunately, in most circumstances, it does not. In some situations where it is a close call as to whether the other driver’s conduct falls outside the scope of their insurance coverage, an insurance company defending their insured can “proceed with caution” under what is known as a “reservation of rights,” but this is a complex area of the law itself.
One of the biggest question plaintiffs’ attorneys get on this point, though, stems from the concern that an insurance company may wait until the last minute, have a judgment entered against their insured, and then try to file a declaratory action to try and get out from underneath the damage.
This, fortunately, is not an option — as the court noted in Employers Insurance v. Ehlco Liquidating Trust:
“Where an insurer waits to bring its declaratory judgment action until after the underlying action has been resolved by a judgment or a settlement, the insurer’s declaratory judgment action is untimely as a matter of law.”
As we’ve stated several times, one of the main reasons that litigation is so difficult is that insurance companies will often go to great lengths to avoid paying a dime — even on the most straightforward of claims. This is why it is important (and quite often necessary) to fight them every step of the way to get the results you deserve.
You can contact us here 24/7/365 (and we really mean that as we will answer our phone) if you have anyquestions and to learn how we may be able to help you in the unfortunate event of an accident that caused you or your family or friends injuries – in particular, you will find that we listen, take your phone calls and e-mails (and even text messages!). We would be honored to help you with your matters – large or small.