If plaintiff has offered to settle the case for policy limits, i.e., has made a policy limits demand, you will not be on the hook for a judgment in excess of policy limits -- your insurance company will be obligated to pay the excess amount.
Should you hire your own attorney? It is always wise to have your own, independent attorney. Your attorney might be able to force the issue with a letter. At the very least your attorney could document the policy limits demand and make certain the carrier was “on the hook” for any excess judgment.
Some situations, for having your own attorney, are more compelling than others. For example, if the carrier is defending you under a reservation of rights because your carrier believes you may not be covered under the policy – you should ALWAYS have your own attorney. If this is the case, your carrier should have advised you of your right to “Cumis counsel.” If you are entitled to Cumis counsel it will be paid for by your carrier and you should employ such counsel immediately.
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You have tons of valid questions none of which can be answered on even a great computer information and marketing website like AVVO. But, neither will they be answered by the insurance attorney whose employer is the insurance company and whose job, sure enough is to kick away at the claim to reduce payout down below the policy limit. I have met and worked with some very capable insurance defense attorneys.
But, their interest is not the same as your interest. After the case is over they will quickly direct their attention the the next pile of cases coming in the conveyor belt, while you will live with the result. Therefore, if you believe there is any possibility whatsoever of a judgment in excess of coverage you need to consult now with an experienced personal injury attorney to review in detail all of the facts and circumstances that will allow an experienced attorney to give you actual advice.
Meanwhile, here is how the value of a claim is determined:
Law Offices of Andrew D. Myers, North Andover, MA & Derry, NH provide answers for informational purposes only. Actual legal advice can only be given by an attorney licensed in your jurisdiction, thoroughly familiar with the area of the law in which your concern lies. This creates no attorney-client relationship.
It's difficult to know the likelihood that a judgment would exceed your policy limit without knowning more facts. Here are a couple things to think about:
1. Nothing is absolute in the law, but its possible that if a jury verdict were to exceed $250k, your insurance company would be determined to be in "bad faith" for failing to settle within the policy limits. In this scenario, it is likely that your insurance company would either pay the full amount of the judgment, or the other party would come to you and ask that you "assign" your right to sue your insurance company for bad faith in exchange for a promise by the plaintiff not to enforce the judgment against you. Either scenario would get you off the hook.
2. You can consult with an outside attorney to assess the entire case and the likelihood of a judgment exceeding the policy. He/she can also protect you by advocating for payment of the policy limit if he/she feels that is necessary to protect you. It is impossible to know on these facts how real the threat of an excess verdict is and whether such a consultation is advisable.
Mr. Daymude is correct. If the injured party made a policy limits demand which was rejected by your carrier, your carrier would be liable for the entire judgment if the matter proceeds to trial and a judgment is awarded to the Plaintiff in excess of your policy limits. Kudos to you for carrying a large liability policy. I don't know what stage your litigation is in, but if it is early, your carrier may want to do discovery to determine certain issues such as liability, contributory negligence, plaintiff's actual injuries and whether medical expenses were reasonable and necessary. You may want to consult with an attorney to ensure that your carrier is handling the claim properly, particularly if your carrier is handling the claim with a reservaition of rights.
Best of luck
As previsouly noted... you may be able to force your insurance company to hire a seperate lawyer, only for you, who does nto answer to the insurance company at all. I suggest speaking with a local lawyer about it.
This response is not intended to act as legal advice. I am not licensed to practice law in any state other than the State of Illinois. No attorney-client relationship is formed until you sign an attorney-client agreement with my office.
First, you should know the injuries and damages claimed by the plaintiff. Ask your insurer for this information. If it refuses, private counsel (mentioned below) may be able to assist. Second, once the plaintiff offers to settle for or within your policy limits and your insurer refuses, then should the case proceed to judgment for an amount higher than your limits, your insurer would probably pay the full amount, including the judgment in excess of your policy limits. The reason for that is that once your insurer rejects an offer for or within the policy limits, it rather than you is and should be the one taking the risk of a higher judgment. If your insurer does not voluntarily pay any judgment above your policy limits, then the plaintiff may request that you assign your rights against your insurer to it in exchange for a promise not to execute on your assets. If that does not happen, then you may sue your insurer for its breach of its covenant of good faith and fair dealing for exposing you to an excess judgment. Once it appears you have any conflict of interest with your insurer you should retain private independent legal counsel experienced in personal injury and insurance law. Many times your insurer will pay for this independent legal counsel under a legal precedent called Cumis Counsel. Your insurer and/or private counsel can explain this to you. The bottom line is that once you were wise enough to buy adequate insurance coverage (i.e., $250K, an amount for which the other side was willing to settle), you probably have nothing to worry about. For more information on insurance and auto accidents, see our web page on this subject: http://www.walchlaw.com/lawyer-attorney-2016564.html .
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I cant disagree with what my fellow attorneys have said and I am not in your jurisdiction. However, one thing has not been commented upon. If the Plaintiff has demanded your policy limits from your insurance company then your insurance company should be providing you with sep. counsel in the near future because there is a potential bad faith claim being set up. Your insurance company should go on to defend the case but I would not be shocked at all if in the near future the Plaintiff attorney asked you to assign any potential bad faith claim you have. You should ask these questions to your counsel.
I am an Arizona attorney. AVVO does not pay us for our responses. Simply because I responded to your question does not mean I am your attorney. In Arizona a non-lawyer is held to the same standards as an attorney so there are dangers to representing yourself. This is for informational purposes only. If you require legal assistance an in depth discussion of your case is needed as there are many other issues to consider such as defenses, statute of limitations, etc.
There are many outstanding answers that have been provided. Since there is so much riding on the line, you should consult with a personal injury attorney for assistance. You have many questions, and there have been great answers. In case you have a question, consider paying an attorney a small fee to make sure your questions are answered in person.
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