Is my insurance company entitled to the property damage portion of my settlement paid by the other driver's insurance?

Asked over 2 years ago - Los Angeles, CA

My boyfriend, daughter and I were in a rear end accident while stopped at a stop light 2 years ago. By 6 months my insurance co. paid for my car rental (2K), paid off my car (18K) plus an additional 4K to make up the value difference in my car. My lawyer proceeded with our personal injury cases (15/30) and property damage (10K). After negotiations we all agreed on certain amounts-- 6K for boyfriend, 5K for daughter, 15K for myself and 10K for the PD (loss of use). My lawyer told me that we would each receive 1/3 of PI and I would receive ALL of the PD. After I sign everything, he tells me that my insurance company is taking 9K of the 10K leaving me with only 1K. Is this customary? And what about the verbal agreement between my and myself? Can I sue him for breaking a verbal agreement?

Attorney answers (11)

  1. 23

    Lawyers agree

    Answered . You have an attorney, and we can't undermine him.

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  2. 19

    Lawyers agree

    Answered . If I understand your facts correctly, your insurance company paid for the damage to your car, which was $18K. Your insurance company also paid you additional $4K to make up the difference between the fair market value ($18K) and what you owed to the bank. Your insurance company also paid you $2K for renting another while your car was inoperable.

    Am I correct thus far? I hope I am.

    So, you are asking for the $10K that was recovered from the 3rd party should go to you. Am I correct? If so, what damage did you sustain that wasn't paid for by your insurance that you claim is subject to reimbursement?

    First, the damage to your car was paid for, including the overage (via GAP). Second, there is no loss of use because you got $2K for the rental.

    The fact that your lawyer was able to get you $1000 from the 3rd party's insurance, should be considered a gift as it is 100% subject to subrogation.

    Once your insurance company pays for the damages to your vehicle, whatever money is recovered from the 3d partt should go to your insurance company. If you read your policy section relating to the subrogation, you'll see it for yourself.

    Lastly, and on unrelated note, I disagree with one of the responses above saying because you have a lawyer other lawyers cannot ethically advise or speak with you. There is nothing wrong with getting second opinion or advice or questioning your lawyers work with other attorneys.

    Send your lawyer a tank you card as he has done a good job for you.

    Happy Thanksgiving.

  3. 18

    Lawyers agree

    Answered . "After I sign everything, he tells me that my insurance company is taking 9K of the 10K leaving me with only 1K. Is this customary?"

    Your insurance company has a subrogation claim against any money you have a right to receive if they have paid out for that claim under the terms of your policy.

    So, to use your facts as an example, your insurance company must have paid out to you $9K in property damage and since they did it is their right – not yours – to receive the first $9K from the settlement. So, yes, this is customary.

    I do not see any violation of any agreement you had with your attorney, so long as you receive all of the PD available to you, i.e., $1K, without deduction from that sum for attorney’s fees.

    In this context, the terms of your written attorney-client agreement govern. Not any verbal agreement between “my and myself.”

    I am licensed in California only and my answers on Avvo assume California law. Answers provided by me are for... more
  4. 17

    Lawyers agree


    Answered . If you have representaion, this pane cannot reasonably or ethicaly advise you. Please speak with your attorney again.

  5. 17

    Lawyers agree

    Answered . I doubt there was a verbal agreement in any enforceable sense. Even if there was, it could cost more to pursue, with, in my opinion, a minimal chance of success, than you would recover. I suggest talking with him so that you understand what happened-such misunderstanding the process is the most likely thing that happened.

    No attorney client relationship is created by the above response. The above response if for general information... more
  6. 15

    Lawyers agree

    Answered . Insurance companies have subrogation and reimbursement rights. These contractual and statutory rights allow the insurance company to be reimbursed or to recover the amount of money they paid on your behalf. This is customary.

    Without knowing the context of your conversation with your lawyer, it was probably meant that the recovery for property damage will not be subjected to his attorney fee amount, i.e. his 33.3% It does not mean the insurance company is not allowed to recover the amount they paid on your behalf for your property damage.

    You should raise this issue with your lawyer and allow him the opportunity to explain it to you. It sounds like he did a good job representing your interests and he shouldn't have an unhappy client because she doesn't understand the rights of the insurance companies.

    This response does not create an attorney-client relationship between you and I. I am not your lawyer and I am not... more
  7. 14

    Lawyers agree

    Answered . I assume that you claimed loss of use damages for part of the 5 mos you went w/o a car, separate and apart for the time you had a rental vehicle. I assume further that you calculated that at 10k or more. Putting aside the arguments that your loss of use wouldnt be 10k (dont know how many days and how much per day you were claiming, and why it took so long to get your collision claim resolved with your own ins co.), I would suggest you talk to your atty about fighting the ins company's subrogation claim. I have successfully argued that my client's right to be made whole, takes priority over the ins co's right of subrogation. Even if you cant get them to walk away completely, you should be able to negotiate a better deal than a 90/10 split in ins co's favor.

  8. 15

    Lawyers agree

    Answered . Sounds me like you just need a little more information. None of us want to ride shotgun on another lawyer's work, AND we should not while you are represented. Go meet with this person. It sounds like you are not disappointed with the financial result, but where the money went. Where the money goes is not always under your lawyer's (or your) control. Good luck!

    The answer provided by counsel in the AVVO forum is not intended to create an attorney-client relationship. The... more
  9. 11

    Lawyers agree

    Answered . You need to bring up these concerns with your attorney. If you are still unsatisfied with the work, then you may want to consider hiring a different personal injury attorney.

  10. 11

    Lawyers agree

    Answered . Insurance policies typically entitle your carrier to reimbursement for payments they make on your behalf which are recoved by you from a third party.

  11. 10

    Lawyers agree

    Answered . Breaking a verbal agreement is always tough to prove. Its a he said / she said type problem.

    Moreover, your insurance likely paid out the 9k or so for someone else's property damage, so under their subrogation clause they have the to recoup what they have paid out on property damages.

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