Articles Posted in Insurance Companies

Auto insurance is supposed to help accident victims recover for their losses after being involved in a serious accident. However, in reality, insurance companies are for-profit companies that are solely motivated by profit. In too many New Mexico car accident cases, insurance companies refuse to offer fair settlements or contest accident victims’ claims altogether. A recent personal injury opinion illustrates how an insurance company may try to limit the amount of money it pays out following a serious car accident.

Signed ContractThe Facts of the Case

The plaintiffs lost two loved ones in a fatal car accident. At the time, the plaintiffs insured five cars through the insurance company and were provided two policy numbers. The limit on each policy was $250,000. Thus, the plaintiffs were seeking a total of $500,000. However, the insurance company claimed that the plaintiffs only had a single policy and paid out just $250,000. Following the accident and the insurance company’s failure to pay their requested amount, the plaintiffs filed a wrongful death lawsuit against the other driver as well as their own insurance company.

At trial, the insurance company sought dismissal of the case, taking the position that the plaintiffs had only one insurance policy and arguing that it had already paid what was due under the plaintiffs’ single policy. The trial court rejected the insurance company’s argument and denied the insurance company’s motion. The insurance company then appealed to a higher court.

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As if being involved in a car accident is not bad enough, sometimes New Mexico car accident victims encounter significant trouble when they try to seek compensation for their injuries. In many cases, these troubles are due to the involvement of insurance companies. While insurance companies are ultimately the source for most car accident victims’ compensation, these companies are operated on a for-profit motive and are financially incentivized to settle claims for as little as possible.

Car AccidentInsurance companies know that the post-accident recovery period is a difficult time for accident victims. In some cases, insurance companies take advantage of this vulnerability by offering to settle a claim for far less than the costs that the accident victim actually incurred. In other cases, insurance companies will deny claims altogether, requiring the victim to file a personal injury lawsuit. This is what happened in a recent case involving a car accident caused by an underinsured motorist.

The Facts of the Case

The plaintiff was the passenger in a car being driven by a friend. The two were heading to the grocery store. When they pulled into the parking lot, the plaintiff and her friend began talking in the car. Before they finished their conversation, they heard a loud bang. As the plaintiff looked over, she saw that two vehicles had gotten into an accident. She exited the vehicle and approached to provide assistance.

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A state appellate court recently decided that a personal injury case involving an underinsured motorist claim should be remanded back to the trial court, due to ambiguities in the insurance contract. The main issue that was being disputed was a clause in the insurer’s policy that required that an underinsured motorist claim must be brought within three years, although the policy also stated that the insured individual must first exhaust the underinsured’s insurance policy.

Signing a ContractIn this case, a mother and her two sons were involved in a serious car accident with an underinsured motorist. The mother filed a lawsuit against the other driver, and her own insurance company also filed a complaint against the driver. The insurance company was seeking damages for payments they made as a result of the accident. However, the other driver’s insurance policy coverage was minimal. The mother filed a claim with her own insurance company as well because the other driver’s policy was insufficient to cover her damages. However, since this was done more than three years after the accident, the insurance company filed a motion to dismiss and argued that the claim was barred by the requirement in the contract that all claims be brought within three years.

The trial court denied the insurance company’s motion, and they then appealed. The court affirmed the trial court’s decision and found that the policy was ambiguous and should be construed in favor of the plaintiff.

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In a recent opinion, a court held in favor of an injured driver who sued their insurance company after filing a claim with the company and receiving a very small amount of damages. The case stemmed from a 2007 accident in which the driver was rear-ended by another vehicle. Sadly, the accident caused serious harm to the driver’s back, and as a result, he filed a claim with his insurance company.

Wrecked CarThe driver brought the claim under the insurance company’s “uninsured or underinsured motorist coverage.” The insurance company and the driver had several months of back and forth until the insurance company finally paid a very small amount. The driver went on to sue the insurance company and claimed that the company breached their contract and caused an unreasonable delay. The jury found in favor of the driver, and the insurance company then appealed. The insurance company argued that the driver produced erroneous expert testimony and was unreasonable. However, the District Court ruled in the driver’s favor and affirmed the $2,250,000 damages award.

New Mexico Underinsured and Uninsured Motorist Insurance Policies

Although accidents are a natural risk that everyone takes when driving, it does not mean that the devastation is any less when it does occur. Drivers purchase insurance policies in order to mitigate the financial cost of an accident. However, frequently insurance does not cover all of the costs associated with an accident. A particularly difficult situation arises when the culpable party does not have insurance at all. In these situations, many drivers rely on their own insurance company’s under-insured or uninsured policy.

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The United States Court of Appeals for the Seventh Circuit released its opinion in a personal injury case earlier this month. The case arose from a 2011 accident in which a woman drove through a stop-sign and caused a multi-vehicle accident. The plaintiff in the case was a motorist who was driving with two passengers.

Wrecked CarThe at-fault driver had an insurance policy that had liability limits of $250,000 per person and $500,000 per accident. The plaintiffs settled the case and opted to collect under the per-accident limit, so the driver received $250,000, and the two passengers split the remaining $250,000. The plaintiffs then argued that the amounts they received were inadequate to make them whole and as a result put a claim in through the plaintiff-driver’s insurance company through their “underinsured” motorist clause.

The insurance company denied the claim and held that this clause did not apply because their policy states that the coverage is limited to $500,000, and the plaintiffs already received that amount through the original claim. The plaintiffs argued that the insurance company’s policy does not make clear that the underinsured motorist policy is limited to $500,000 per accident, and the limit should be considered a per-person limit.

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With the prevalence of ride sharing and privately operated car services, discussions regarding the rights and liabilities of those injured by or as passengers in these vehicles have begun to make headlines. Although taxi cabs have been around for decades, the increased availability of private driving services has resulted in many legal questions. A recent national newspaper article reported on these concerns from the perspective of the drivers.

Taxi LaneGenerally, these private car services are app-based and driven by individuals not employed by any company. These drivers operate their own vehicles and are supposed to be insured. At this point, these drivers are not considered “commercial drivers,” and as a result their insurance policies do not address the complicated issues that may arise when they injure someone in a car accident.

In most cases, when a passenger is injured in a car accident, there are several ways they may try to recover damages for the injuries they suffered. For example, an accident victim may bring a negligence lawsuit in civil court, or they may try to collect from the driver’s insurance company or even their own insurance company. In New Mexico, if the parties have low coverage limits, the injured party may be able to collect enough by bringing claims against both their own and the other party’s insurance company.

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Obviously, the most important settlement consideration to the plaintiff in a personal injury case is his/her net recovery. Therefore, the plaintiff’s attorney must understand the role of the various parties who make a claim against the settlement proceeds. The plaintiff’s net recovery is enhanced by proper handling of these claims. In addition, the plaintiff must be aware of the potential consequences of not handling these claims correctly.

Subrogation arises between an insurer and its insured, allowing the insurer to recover payments against the person who caused the loss. Subrogation “allows an insurer who has fully compensated the insured to step into the shoes of the insured and collect what it has paid from the wrongdoer.” Amica Mut. Ins. Co. of Ariz. v. Maloney, 120 N.M. 523, 527, 903 P.2d 834, 838 (1995). Subrogation arises “by operation of law.” Safeco Ins. Co. of America v. U.S. Fid. & Guar. Co., 101 N.M. 148, 149, 679 P.2d 816, 817 (1995). Subrogation also arises in the suretyship context. See NM State Highway & Transp. Dep’t v. Gulf Ins. Co., 2000-NMCA-007, ¶11, 128 N.M. 634, 996 P.2d 424.

New Mexico has applied subrogation principles only in disputes involving insurers. Gulf Insurance Co. v. Cottone, 2006-NMCA-150, ¶11, 140 N.M. 728, 148 P.3d 814. Cottone arose from a chain reaction auto accident. A person injured in the accident sued (only) a driver, insured by Gulf Insurance Co. Gulf then sought reimbursement from others allegedly at fault for the accident. Gulf argued it became subrogated to the claims of the injured party when it settled with her. The court rejected this attempt to expand the concept of subrogation, which traditionally has been limited to insurance companies that had paid their own insureds. The reasons for this rejection were (1) the doctrine of comparative fault meant that Gulf had only paid damages by which its insured was responsible and, therefore, had no claim against the other parties, (2) New Mexico does not allow an assignment of personal injury claims, and (3) the release signed by the injured party did not release anyone other than Gulf’s insured.

New Mexico is far from the richest state in the nation. New Mexico residents rarely have substantial assets buried in their back yard that can compensate New Mexico accident victims for their injuries. As a result, the financial recovery available to New Mexico car accident victims is often limited to the insurance policies in effect at the time.

New%20Mexico%20Car%20Insurance%20Policies.jpgUnless the negligent driver has substantial assets to cover the injuries caused by the accident, many times the biggest question for serious car accidents or New Mexico wrongful death cases, is what is the available limits of insurance. Answering this question typically requires obtaining the other driver’s insurance policy. However, if the accident victim has any New Mexico uninsured or underinsured coverage, than a simple review of the policies can shed some light on what the minimum available limits may be.

If you have been injured in a New Mexico accident, you can check your own insurance to see if you see the letters “UM” or “UIM” next to various numbers. If you see these letter, it means that you have uninsured or underinsured motorist coverage that if necessary can be used to help in the recovery. Next to these letters you will see two numbers separated by a “/”, such as “25/50” or “100/200.” Whatever these numbers may be, they are your policy limits on that particular vehicle. The way to read these figures is to look at the first number which indicates the most that any single person is able to recover from injuries resulting from the accident, and the second number which is the most that can ever be paid by the insurance company for the accident.

The American Association of Justice recently released the results of a survey of the nation’s worst insurance companies. Although all of the notorious New Mexico insurance companies are not on the list, some do appear. The study focuses on court documents, testimony, complaints filed, news accounts, and FBI records.

Client’s often times do not understand the importance of an insurance company in a New Mexico auto accident case, but often times the insurance company will determine the pace and direction of the case. There are some New Mexico insurance companies whom an experienced New Mexico injury lawyer knows that it will be necessary to file a lawsuit against. Other insurance companies are easier to work with and will resolve much earlier. Being aware of the the style of the insurance company you are going up against is crucial to begin the case and get it moving in the right direction.

As far as the list goes, according to the American Association of Justice, Allstate, Farmers, and Liberty Mutual scored some of the worst scores and are more likely than not to result in a bumpy litigation road. If you are unsure of how your insurance company compares with the rest, it may be worth speaking with a New Mexico injury lawyer regarding what can be done.