I was in a car accident, I turned left, I was supposed to yield but it was dusk and the other car did not have headlights on so I didnt see them. I was sent a letter by my car insurance that the other parties attorney sent my insurance a demand letter for $100,000. My policy limits are $50,000. The letter from my insurance said to notify them if I want to use my own counsel but they will try and negotiate in mine and their best interests. I have a house which I have no equity in, I have about $2,000 in my bank account. I dont know what I should do. Should I consult with my own lawyer or let my insurance handle it? Does it seem likely that they would refuse to settle for my policy limits if I have no assets?
As a general rule it is unlikely that they would refuse to settle for your policy limits if you have no assets. I suggest you tell your insurance adjuster that you have no assets and have no money to contribute to a settlement. Then instruct him to try and settle within the policy limits. Good Luck
Has the injured party filed a lawsuit against you? If so, your insurance company will hire and pay for an attorney to represent you (which is what I used to do). You should also demand that your insurance company send you a copy of the Demand that outlines what the injured party is looking for, so you can assess the risk. If it is clearly a case that exceeds your policy limits (and based on what you told us we don't know) then you can demand that they tender your policy limits to the injured party - and make sure you put that in writing. You can always seek your own private counsel to consult with and ask your insurance company to pay for it. Best of luck to you.
Arthur D. Leritz
In Washington, your insurer is going to have a duty to defend, under the terms of the policy that you purchased from them. Pursuant to their duty to defend, they should provide you with insurance defense counsel (in Washington, some insurance companies - e.g. Safeco - handle almost everything "in house", while others - State Farm, for instance - generally refer the matter out to a private attorney with whom they have a contract). Whether in house or otherwise, the attorneys primary duty in theory, if not always in reality, is to look out for your best interests. Accordingly, the extent to which you need to confer with your own counsel will be gauged by the probability that the plaintiff will pursue assets in excess of your policy limits. In a settlement context, this is probably unlikely (but will depend upon the injuries suffered by the plaintiff), however in a litigation context, where you have been served with a summons and complaint, all bets are off. The answer to your question, then, is more a matter of timing. Unless specific demands are being made of you, pre-litigation, you should probably let your adjuster know that you're not interested in being involved in a lawsuit if that is the case, but you do probably not need to confer with an additional lawyer at your expense at this time. You should also be aware that to the extent your insurance company does not honor those wishes and exposes your personal assets to liability, you do have protections, and potentially remedies against your insurance company.
I believe that I have previously responded to this question. However, in an abundance of caution: clarify with your carrier what it means by "use your own " counsel. You do not post the underlying facts of the auto accident, but if it was not alcohol related, you may consider bankrutcy. You do not necessarily lose assets, especially those in which you have no equity.
Most commonly, an insurance company will receive a demand letter that is well in excess of the actual value of the claim. If there is a true claim with a value of $50,000 or so, the injured person will likely agree to settle for your policy limits AND A RELEASE of you personally. The release is the important part, that means they cannot sue you personally for any additional monies. If the injured person has underinsured motorist coverage, they are usually happy to take your limits with a release, and pursue their own insurance company that they know has money, instead of you, who likely does not have any additional monies to offer them.
Attorney Gillin is correct. The other driver will not want to litigate a case against a party who is judgment proof. Just because the other driver's attorney sent a demand does not mean he's going to get anything. If it can be established that the other driver was in violation of a traffic law by not turning on his lights, his/her case may not be so strong. Keep in mind that your insurer has a duty to defend you in this action. That means that you will be assigned an attorney to represent you if a lawsuit is filed. Until then, you shouldn't worry too much.
First, a demand letter is not actually a demand for money to settle. It serves more as a negotiating starting point to try and settle a case. Therefore, just because an attorney sent a demand letter of $100,000.00 does not mean that the case will or should settle for actually $100,000.00.
The reason you have insurance is to cover your risks in car accidents, etc. Your insurance provider has teams of adjusters and attorneys who review claims, lawsuits, etc for a living and are usually very good at their job. This being the case, if you inform your insurance provider of your financial situation and ask them to handle the negotiations in your best interest, they will likely do so. It may be a little early in the life of the case to start considering seeking outside representation.
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