What boggles peoples minds is the fact that a large number of Maryland car accidents that lead to death and disability settle for $100,000 or less. Some settle for $30,000 in case where the liability is clear or even if the defendant was drunk out of his mind.
How does this happen? In many cases, the key to recovery is finding insurance. You have to know where to look and you have to know how to look. But sometimes there is nothing there even when you look in the right places.
Okay…so how can this happen? Maryland requires that each licensed vehicle be covered by auto insurance of some kind. But the minimum auto liability insurance required is quite low in relation to the  potential that a vehicle will inflict harm. Consequently, a driver may be hit by another car that has as little as $30,000 in maximum liability coverage ($15,000 per person/$30,000 per accident). The non-negligent driver may have been severely injured by another driver who has few personal assets, in which case, even prompt payment of the negligent driver’s $30,000 in liability insurance will do little to compensate the severely injured non-negligent driver. As a result, every driver is constantly at risk of being severely injured by another, largely impecunious driver with low policy limits.
The first path to getting more than the at-fault driver’s policy is to find more coverage for the at-fault driver or use your uninsured motorist coverage. In these cases, the only way to get more than the insurance policy limits is to (1) get a verdict, and (2) the insurance company fails to offer the policy limits. This happens more often than you think because insurance companies are willing to delude themselves about trial risk. Insurance companies, at least in Maryland, do not make it difficult to collect more than the policy limits when this happens.
The purpose of this post is to generally explain the path and the law involved in getting more than the insurance policy limits in a car accident case.
Insurance Company’s Obligation
The insurance company for the at-fault driver has few practical obligations to the victim. But it does have an obligation to protect the at-fault driver from having to pay a judgment beyond the policy limits that it should not have been put in a position to have to pay had they just acted reasonably. When deciding whether to settle a case, the at-fault driver’s insurance company is required to act in good faith; so the person that caused the accident is not deprived of the benefit of the insurance bargain it earned, by writing that premium check every month.
So an insurer may be liable to its insured if it does not tender the insurance policy limits, even if a policyholder’s claim is not covered under the policy. The major insurance companies in Maryland realize they have a conflict between protecting their insureds and rolling the dice on a claim. So if the insurance company does decide to roll the dice, usually they just play it straight and make a promise to the insured that if there is a verdict in excess of the policy limits, they pledge they will pay the claim. We have yet to get an excess verdict where the insurance company, even raised as a negotiating tactic the idea that the insurer only had responsibility up to the policy limits.
How the Stars Align
The key to getting more money for a case than the policy limits is the insurance company’s arrogance. We have had so tried so many cases where I thought they must know something I don’t or have some trick up their sleeve because their valuation of the case was so divorced from reality. But usually the insurer is too lazy or cocky to step back and make an honest evaluation. We tried cases where we have demanded the insurance policy limits; all the while hoping that they refuse to tender the policy, so our client would get a fair verdict from a jury that is greater than the policy limits. Because if the insurance company does offer the policy limits, that is all they are obligated to pay and that is all that they will pay.