Underinsured Motorist (UIM) Settlements for Bodily Injury Involving Defendants with Assets
Let’s assume your attorney’s investigation of defendant Joe Brown reveals he won a $10,000,000 lottery last year, but never increased his minimum $25,000 liability limits. The plaintiff, Priscilla Pristine, fractured her tibia in 2 places and fractured her ankle in 3 places in a Fairfax, Virginia, car crash. She has $100,000 in UM/UIM coverage entitling her to $75,000 in UIM benefits from her own carrier, State Farm. Priscilla’s case has a value of over $3,000,000. You are Priscilla’s lawyer. What do you do?
Follow the 4 steps: RTP (Read the Policy), RTS (Read the Statute), RTC (Read the Cases) and FTD (Find the Date of the Defendant’s liability policy was issued or renewed in 2016). The defendant’s policy was renewed on January 2, 2016 before Priscilla’s crash. Nothing has changed in 2016 except the statute. Let’s read new section K of §38.2-2206, especially the first and last sentences.
“A plaintiff may settle a claim with (i) a liability insurer or insurers without prejudice to any UIM benefits. . . This section provides an alternative means by which the parties may resolve claims and does not eliminate any other available means.”
In this “rich guy defendant” example, it would be best not to settle the liability claim under the new 2016 settlement law as the defendant would be forever released by payment of $25,000 from his liability carrier. Instead, proceed to trial. After a judgement, Joe, the lottery winner defendant, would owe the plaintiff the excess verdict out of his own pocket. In addition, since the plaintiff never received payment from Joe’s liability carrier, Geico, before judgement, the UIM carrier’s subrogation rights against Joe are preserved.
With Client Meeting Locations in Woodbridge, Manassas and Fredericksburg and a main office in Alexandria, Gerald Schwartz helps people injured in auto accidents throughout Northern Virginia.1-800-423-0055 – Free Consultation