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Ben Glass
Ben Glass
Attorney • (703) 584-7277

Allstate Decision Leaves Insured’s Personal Assets Exposed

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What happens when the insurance company that is defending you in a car accident case decides to throw the dice and the jury returns a verdict in excess of your insurance policy? That’s an issue that we are frequently consulted on and a recent Fairfax Virginia car accident case highlights the issues and rights of the insured who is left holding a judgment that is a whopping $150,000 more than his coverage.

The case of Ki Sop Lee v. Anthony Brooks (Fairfax Circuit Court CL2007-10221) highlights the issue. Lee sued brooks for injuries sustained in a car accident. Allstate hired an doctor to examine Lee and the doctor’s opinion was that Lee suffered a herniated disk that was a permanent injury due to the accident.

The case was handled by attorney David Marks of Fairfax, VA.

Lee’s medical expenses exceeded $13,000. Despite the opinion of the doctor who they hired to examine Lee who said that she suffered a permanent injury from a herniated disk, Allstate offered only $6,000 to settle the case.

Lee rejected Allstate’s offer but made a demand that was well within Brooks’ insurance policy limits of $250,000. Allstate refused to budge, despite the advice of a neutral case evaluator assigned by the court to help get the case settled.

The jury returned a verdict of $400,000 and the judge entered the judgment immediately. This means that right now, in Fairfax County, there is a judgment against Brooks in the amount of $400,000 and he has only $250,000 in coverage.

Depending on the facts as to what was communicated to Brooks, he may have a claim against Allstate and/or the attorney who hired him.

Here are the essential points to be heeded whenever you are the alleged cause of a car accident and are being defended by an insurance company.

1. The lawyer assigned to you if YOUR lawyer even if that lawyer works directly for the insurance company.

2. That lawyer owes you a duty over and above any duty owed to his employer

3. The lawyer’s duty is to keep you fully informed as to the status of the case, settlement negotiations, medical reports, settlement status conferences and the like. That lawyer is typically reporting to the insurance company and you should be receiving all of those reports as they are being transmitted to the insurance company.

4. When it comes down to rejecting settlement offers, you need to be in the decision-making process. You should insist that if a settlement offer is made within your policy limits that the case be settled unless you are willing to take 100% of the risk of paying any excess verdict. In other words, if you insist on getting the case settled and the insurance company does not want to settle the case, then you should insist that the insurance company, promise, in writing, that they will either immediately pay the full verdict or deposit into court the total amount of the full verdict so that the judgment against you does not impair you credit, impair your ability to buy a car or house or affect you in any way.

5. To be sure, insurance companies have a right to take cases to trial, but you, as the one who will end up paying out of your own pocket should things go wrong, have the absolute right to be fully informed and to insist that the insurance company not gamble with your money/house/car.

6. If you are involved in a case where the potential damages exceed your insurance coverage you should consider hiring your own lawyer to make your position very clear with the insurance company. Again, if the verdict is in excess of your insurance coverage, its your assets that are at risk.

In a case like this, with the defense hired physician agreeing that there is a permanent injury it may be very difficult for Allstate to argue that a $6,000 offer for a herniated disk was a reasonable decision to make. Maybe they discussed this fully with Brooks before the decision was made to take the case to trial. Hopefully he was fully advised and agreed with the decision. In my opinion, that’s the only way this case should have been handled: full advice, full communication of settlement offers, full participation in settlement negotiations.