Non-Cooperation with Liability Carrier Before Payment - Enter UM Coverage

Defendant Joe Brown can not be found by his liability carrier, Geico, because Joe never gave Geico his new address. In addition, Joe, refuses to give a statement as to how the crash happened to the Geico adjuster.

Every Virginia auto policy has sections entitled “Duties” and “Exclusions”. Every policyholder is required to cooperate with his insurance company after an auto accident. If the policyholder does not cooperate with his own insurance company, his insurance company is allowed to deny the policyholder the coverage he needs to protect him from a claim for damages brought by the person the policyholder negligently injured.

Here, since Joe failed to cooperate with his own company, which prejudiced Geico, Geico can deny liability coverage to Joe for this auto accident.

Instead of being “left out in the cold”, the plaintiff is allowed to bring an Uninsured Motorist (UM) claim with her own insurance company, State Farm, because – by failing to cooperate – Joe now has no insurance for this accident. He is now called an “uninsured motorist”.

So, if Geico denies liability coverage to Joe for this accident because of non-cooperation, the plaintiff now has a UM claim, not a UIM claim, against her insurer, State Farm.

If the defendant, Joe, initially cooperated with Geico but stopped cooperating with anyone after the payment to the plaintiff, the UIM case still proceeds against State Farm. Remember: “upon payment” of the liability limits to the plaintiff, the liability settlement is finalized and the liability carrier’s duty to defend and the UIM carrier’s subrogation rights are eliminated. The loser is Joe Brown as State Farm’s subrogation rights against Joe are revived by his non-cooperation after the liability payment to the plaintiff is made.

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For help with an Uninsured Motorist (UM) claim, an Underinsured Motorist (UIM) claim, or for help holding a wrong-doer accountable, call Gerald Schwartz today for a free consultation.