Recovering a fair settlement after a serious injury or wrongful death is a tricky process that may involve several insurance policies. Ideally, the person or entity that caused your injury or loss will have liability insurance that covers such scenarios, whether it was a car accident, slip and fall, product defect, etc.
In addition to auto, home, and renter’s insurance, some defendants have umbrella coverage. This is extra liability insurance that will kick in if the policyholder is held responsible for serious injuries, property damage, and/or other losses that are not fully covered by their other policies.
For example, if you were hurt in a car accident but the at-fault driver’s auto insurance limits are too low to cover your medical bills, his or her umbrella insurance may cover the remaining costs up to the umbrella policy’s limits.
Below, we’ve answered a few FAQs about umbrella insurance. If you still have questions or if you need help with your personal injury or wrongful death case, contact the Law Office of Michael D. Waks at (562) 206-1939 for a free consultation.
What Does an Umbrella Insurance Policy Cover?
Depending on the specific terms of the defendant’s umbrella insurance policy, it may provide coverage for:
- Serious injuries or property damage caused by the policyholder and members of his or her household;
- Injuries caused by dangerous conditions on the policyholder’s property for which he or she is legally liable;
- Injuries and property damage caused by the policyholder’s dog;
- Injuries and property damage caused in an auto accident for which the policyholder is held responsible;
- Injuries sustained by a guest in the policyholder’s home;
- Injuries sustained by a child who was playing in the policyholder’s yard;
- Injuries sustained by a person who tripped on a crack in the sidewalk of the policyholder’s rental property;
- Injuries caused by the dog of a tenant who is renting a property from the policyholder; and
- Claims against the policyholder involving libel, slander, shock and mental anguish, and other personal liability situations.
How Do I Determine If the Defendant Has Umbrella Coverage?
The answer to this question depends on whether you have already filed a lawsuit. If you have already filed, your attorney will serve a “Form Interrogatories” document to the defendant, which includes a series of questions the defendant must answer under oath. One of these questions will be whether, at the time of the accident, the defendant had any insurance that might cover the claim. The defendant is required to disclose all insurance policies that might apply, as well as their coverage limits.
If you have not yet filed the lawsuit, the defendant has no legal duty to disclose the types of policies he or she carries or their coverage limits. In some scenarios, though, the defendant will authorize the claims adjuster to disclose this information anyway, especially when it is obvious that the value of the injuries exceed the underlying insurance coverage.
Often, whether or not the defendant will authorize disclosure depends on the amount of damages the claimant has incurred and the defendant’s policy limits. For example, if your medical bills are low but the defendant has high coverage limits, he or she probably will not authorize disclosure of those policy limits due to fear that you might accrue more medical bills than are necessary for treatment. Conversely, if your medical bills are high but the coverage limits are low, the defendant may be more likely to authorize disclosure because your claim would be worth more than the policy limit.
If the defendant does not authorize disclosure, your lawyer may be able to hire an insurance tracing company to investigate the policy limits.
If you already have a law firm to represent you, it’s a good idea to find out if your attorney has requested disclosure of the defendant’s insurance coverage details or has hired an insurance tracing company to uncover this information. If your lawyer has not done so, it may be wise to ask him/her why not, or to consult another attorney.
Unfortunately, it is not uncommon for personal injury lawyers to overlook this crucial step and recommend that a client undergoes expensive medical tests and treatment without first finding out if the defendant has the insurance to cover these costs. If the policy limits are too low to pay for your medical bills, you might be stuck covering the difference out of your own pocket. This is true even if your doctor treated you on a lien basis.
At the Law Office of Michael D. Waks, we make it a point to determine the defendant’s insurance coverage limits as soon as possible. We will do everything we can to protect your financial interests, and that means devoting the time and resources needed to help you make informed decisions about your medical care.
Who Should Purchase an Umbrella Insurance Policy?
If you own assets of significant value, it’s probably a good idea for you to purchase umbrella coverage. Here are a few factors to consider when choosing your policy limits:
- How much are your assets worth? Consider the value of bonds, stocks, retirement funds, and properties.
- What types of risk do you face? Do you own a home or rental properties? Do you have a long drive to work? Do you take part in dangerous activities that put other people at risk? Do you own a dog with a history of aggressive behavior?
- Do you earn a high income? In some cases, a liability lawsuit can result in the loss of future income.
What Are Some Other Potential Avenues of Financial Recovery After a Serious Injury?
Unfortunately, it is not uncommon for defendants in personal injury and wrongful death cases to lack the insurance coverage to pay for the medical bills, lost income, and other damages they cause. Depending on the types of insurance you carry, though, there may be several options for obtaining compensation other than filing a third-party insurance claim or a lawsuit against the tortfeasor.
For instance, if you were injured in a crash with an uninsured driver but you carry uninsured motorist bodily injury coverage, this may pay for your medical bills up to your policy limits. If you suffered property damage in such an accident but you carry uninsured motorist property damage coverage, this may pay for your vehicle repairs or replacement. You may also be able to recover compensation for property damage by tapping into your collision coverage.
If you were injured in a car accident and you carry no-fault insurance, such as medical payments coverage (med pay), you may be able to recover compensation for your medical bills no matter who was liable for the crash.
Discuss Your Case with a Long Beach Personal Injury Lawyer
Your Injuries Are Personal to Me
The aftermath of a serious injury or wrongful death in the family is a confusing time. Making matters worse, the insurance adjuster will likely go to great lengths to find reasons to dispute your claim.
If you have incurred significant financial losses due to another person’s negligence or wrongful acts, turn to the Law Office of Michael D. Waks. We will assess your case for free and help you identify all potential avenues of pursuing compensation.