At-fault accident, limits exceeded. UIM, but same insurer. Covenant not-to-execute: details/potential risk? Likeliness of trial?
Once the covenant is signed, are my own assets really 'safe'? Any reason not to sign a covenant, and would I need to disclose my finances before this? (not rich, just worried!)
Does it matter that both parties have the same insurer (resulting in the insurer not only to pay up to my limit but also any UIM settlement!)?
When i talk to an attorney from my insurer, what do i ask? Do i need a personal lawyer? Will there likely be an actual trial
7 attorney answers
In my opinion, a "convenant not to execute" is insufficient protection. If your limits are going to be paid in exchange for extinguishing your financial exposure, you should be receiving a full and final release of all claims. And you should look to increasing your limits in the future. The situation with the same insurer holding both policies may be why they are considering the convenent route, as a normal release would free you as well as your insurer. However, if they make the effort to go beyond their boilerplate language and create a proper release, there is no reason they can't let you out while leaving the UIM coverage on the table.
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I like to get to the bottom line. Your own insurance company has to provide you a lawyer to protect you as well as the ins. co. In big money cases you might hire your own lawyers. But in a case like you describe, if you don't want to bear the expense of hiring your own lawyer, try to get a letter from the lawyer that the ins. co. provides stating that what they are asking you to sign will protect your assets and credit rating.
covenant not to execute
An agreement by the plaintiff in a lawsuit not to enforce a money judgment against a defendant. Covenants not to execute are sometimes given to an insured in exchange for the insured's agreement to allow a consent judgment and an assignment of the insured's potential bad faith claim against a liability insurer.These agreements require careful review and drafting as a mistake on drafting these personal injury releases could inadvertently release the other defendant or insurance company if the intent of the agreement and the language is not very clear and in line with state law.
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As long as all the parties who are injured sign a release accepting the money and waiving any right to pursue you then your assets are protected. Make sure that any parties that could potentially be injured sign a release. I would suggest if you have the money, speak to an independent lawyer aside from your insurance company. Although the insurance company has appointed you a lawyer, in cases like these, I personally think that the Defendant should have his own attorney, even if it is a free consultation or for the Defendant to pay a couple hours to an attorney to review the release and language. In this particular case, I think there may be some missing facts as typically if the injured party signs a release and then pursues their underinsured, the injured party would sign a general release not a covenant not to execute. Covenants not to execute are complex to explain here but generally speaking from the facts you lay out there, the injured parties would sign a general release not a covenant not to execute so I think there may be some additional facts that are missing. Maybe there was a judgment against you? It does not matter that both parties have the same insurance company. These claims should be treated separately in that one is a liability claim against you and the other is their underinsured. Again, with respect to the language covenant not to execute generally speaking they would be signing a general release not a covenant not to execute so I think there may be something additional going on that has not been explained to you. I would ask the attorney why are they signing a covenant not to execute as opposed to a general release and was there a judgment against you. I think having another lawyer look over the file and pay for an hour or two review to an attorney may be beneficial for you. Remember, although the insurance lawyer is working for you in this case, really he/she gets his pay check from the insurance company. Many lawyers, not all, in these circumstances act in the best interest of the insurance company because that is who is paying them. Just my two cents. Good luck with every thing.
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I agree with my colleagues. THis is standard practice. You sign the agreement and they sign the release not to sue you anymore. Best of luck.
This answer is provided by Manuel A. Juarez, Esq., El Abogado de Accidentes de Autos de California: 510-206-4492. El Abogado de Accidentes de Autos provides answers of a general context. These answers are not intended to form an attorney client relationship. El abogado de Accidentes de Autos y Lesiones Personales practices in Antioch, Berkeley, Concord, Oakland, Hayward, Martinez, Newark, Richmond, San Francisco and San Rafael. El abogado de accidentes y lesiones is licensed only in California. This information is good only in California and it is not to be taken as legal advice on car accidents, personal injury, divorce, bankruptcy or in any other type of situation. Esta respuesta es del Abogado de Accidentes de Autos y Lesiones Personales de Acidentes de carros, Manuel A. Juárez, 510-206-4492. Abogado Hispano de Accidentes, Divorcios, Abogado Latino de Accidentes, y Abogado de Acidentes de Oakland, Hayward, San Francisco, y California. Estas respuesta son solo para información general y no consisten en consejo legal sobre divorcios, mantención de esposas, mantención de hijos o bancarrotas. Las respuestas son comentarios legales que no forman una relación de abogado y cliente. Manuel Juarez, Esq., esta licenciado solo en el Estado de California.
Your insurance co. will give you an attorney to defend the claim and get a Release signed in your favor if they tender the limits or payout any settlement amount for that matter.
Call for a free consultation at 727-937-1400 or visit us on the Web at www.serviceandjustice.com.
Your insurance company should obtain a release of all claims on your behalf in exchange for tendering the policy limits. You may want to speak with an attorney to ensure your assets are protected.
If you would like a free consultation, call me at 702-823-3333. www.naimidilbeck.com
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