Found an issue on this page? Let us know and we will look into it as soon as possible.
Car Accident, my insurance company is not settling. Do I need to hire my own attorney?
Anonymous5 views7 answers
I was in a car accident where I was at fault. The other driver sued 18 months ago for a soft tissue injury. I have a $250k policy limit. The other driver missed a few weeks of work due to an endoscopic procedure on his back. His attorney has demanded $150k.
I was told by the claims rep that the case went to arbitration and they awarded $45k, which was rejected. The claims rep is now using the arbitration award as leverage and offered $55k, which the plaintiff rejected. My claims rep is telling me there will be no more negotiations, and that the trial is set for sometime in April.
I sent a letter to my insurance-appointed attorney demanding that they settle within the policy limit. What if the verdict is over my policy limit? How can I be held liable when the insurance company could have settled?
Your insurance contract probably gives your insurance company discretion to settle the claim or to defend it to trial. The language of your particular contract would be critical in determining your insurer's rights in this regard.
Your insurer must exercise that discretion, though, in good faith. The law requires it to avoid placing its own financial interests (paying $55k or less) above yours (avoiding an excess judgment).
If you are concerned with the effects or probability of an excess judgment, you cannot count on the attorney whom your insurance company hired to protect you against the bad acts of your insurer. Seek independent counsel - not necessarily to defend the suit itself, but to advise you about what to do if the other party obtains a verdict in excess of your policy limits.
There is likely no means by which you can force a settlement, but independent counsel should be able to advise you as to the best course for ensuring that your insurance company, not you, is responsible for paying any excess judgment obtained at trial or otherwise insulating yourself from the risk of such a judgment.
Most attorneys will provide a free consultation and you should avail yourself of this in order to obtain a perspective from a NJ attorney.
While results do vary, I can tell you that if an arbitration panel awarded $45k, that should be as much a guide to you as it is to the adjuster as to the value of the case. If the attorney has demanded $150k, that should also be a guide to you as to the upper value of the case. Even plaintiff's attorney does not value it at your policy limits.
Does this mean a jury would never award that amount or over? Of course not. However, it is unlikely to happen that way. Talk to some attorneys to try to ease your mind. Hopefully, someone here from New Jersey will answer your question for you.
Your insurance company will provide an attorney; however, as the insurance company is the one paying the bill, the attorney will be beholden to the insurance company. If you truly want to protect your own interests, you can always retain your own attorney.
In New Jersey, if a plaintiff submits a settlement demand that is within the policy limits of the insurance company and your insurance company refuses to settle within those limits (and the demand is otherwise reasonable in light of the circumstances), your attorney should send what is known as a "Rova Farms" letter, demanding that your insurance company settle within the limits of your policy.
Once sent, if the insurance company does not comply with your request for them to settle the suit within limits, your insurance company will automatically, by law, be liable for any verdict in excess of policy limits. Your attorney should know this and if he/she hasn't sent the "Rova Farms" letter, it should be sent immediately so as to protect you. (Rova Farms refers to the court decision which resulted in this common law rule in New Jersey.)
