You’ve been in a car accident. It wasn’t your fault. At the scene you exchange insurance information with the person who hit you. Although you’re in pain you’re at least happy to know that the other driver has insurance so you don’t have to worry about repairs to your car and medical bills. Or do you? You might be surprised to learn that if the other driver fails to cooperate with his insurance company in its investigation of the accident, that insurance company can deny coverage leaving you to pay for your own car repairs, medical bills etc. How can an insurance company deny coverage to you even when you do nothing wrong and the other party is at fault?
With respect to the insurance coverage think of it like this: when you buy car insurance you are making a deal with the insurance company. The insurance company’s part of the deal is that it agrees to provide you with insurance coverage up to a certain amount if you cause an accident. In exchange for the insurance coverage you agree to two things. First you agree to pay the monthly premiums on the policy. Second – and just as important – you agree that if you cause an accident you will cooperate with the insurance company in its investigation of the claim. If you fail to cooperate with the insurance company during its investigation of the accident then you have breached the terms of the contract. It is absolutely no different than if you stop paying your monthly premium. If you stopped paying your premium and sometime after you stopped paying you got into an accident would you expect your insurance company to cover you for that accident? Of course not.
In short, if you don’t do what you have agreed to do then the insurance company does not have to do what it agreed to do. In the hypothetical case above, the Defendant breached his contract with the insurance company by failing to do what he promised to do i.e. cooperate with it in its investigation of the accident. As such, the insurance company does not have to do what it promised to do i.e. pay for the damages he caused. You didn’t do anything wrong but insurance contracts are treated just like any other contract and if someone causes a breach of that contract then a third party beneficiary, like you, can be left out in the cold through no fault of your own.
Does that mean the person who caused the accident can’t be held responsible? No, whether there is insurance coverage or not has nothing to do with whether the Defendant himself is responsible for causing the accident – of course he is still responsible. It just means that his insurance company doesn’t have to pay for the damage he caused because he breached the contract. Generally, in a personal injury case in Florida we are required to sue the individual – we cannot sue the insurance company directly. The insurance company’s job is limited to defending the lawsuit and paying any judgment up to its policy limits. In the case outlined above you can still sue the Defendant and probably get a judgment against him but because he breached his insurance contract the insurance company will not be responsible for doing its job of defending him or paying a judgment we get against him. Rather, the Defendant will be required to defend himself – or hire his own lawyer to defend him – and he will be required to pay any judgment out of his own pocket. As a practical matter, a person who fails to cooperate with his insurance company during its investigation probably doesn’t have a million dollar bank account and so collecting any judgment against him personally will likely be next to impossible. Is that fair? Is that right? Of course not.
What can you do? You can make sure you carry adequate UM coverage (underinsure/uninsured motorist coverage). UM insurance is coverage that you buy to protect yourself from uninsured drivers or drivers like the one in the case above who fails to cooperate with his insurance company. If you have UM coverage you are taking a big step towards protecting yourself. Do you really want to tie your future to whether someone else does the right thing?
Gregory T. Zele
Zele Huber Trial Attorneys, P.A.
4600 Military Trail, Suite 212
Jupiter, FL 33458
(561) 630-9700 – Office
(561) 630-9707 – Fax
(561) 371-4515 – cell
Email: gzele@MyInjuryJustice.com
Admitted in Florida & New York