The best thing would be to hire an attorney to respond to this letter and to respond to any lawsuit should you be sued above your coverage amount.
THESE COMMENTS ARE NOT LEGAL ADVICE. They are provided for informational purposes only. Actual legal advice can only be provided after consultation by an attorney licensed in your jurisdiction. Answering this question does not create an attorney-client relationship or otherwise require further consultation.
In order to protect your rights and assets I would recommend hiring your own personal attorney to ensure you are not exposed to an excess judgment. The insurance company is supposed to protect your interests but their own claim process sometimes gets in the way.
You should consult with an attorney. Even if you have no assets at the current time, in Florida the statute of limitation to enforce a judgments is 20 years total and is a lien on any real property.
You want the case settled within your policy limits and an attorney can put pressure on your insurance company Thus, if you will the Power Lotto 19 years from now, you do not have to deal with an old judgment.
Although you would clearly benefit from hiring personal counsel, you should know that many attorneys (Including our firm) will be willing to charge you an hour or two of their time for some guidance, or legal advise.
The scenario you describe is common when injuries exceed the coverage limit. You should request the demand letter and claimed "medicals" of your insurance carrier so you may review with any attorney you consult with. You should also advise your insurance carrier that you expect any payments under your policy to include a "full release", which would end yyour exposure if accepted.
That's a form letter that rarely creates a need for you to hire your own lawyer. Your insurer has the duty to defend you and to pay the claim up to the policy limits. They'll try to settle the claim within the limits of the policy. If they can do it, then you're off the hook. If they can't and you get sued, then you ought to consult with a bad faith attorney. In your area, you ought to consult Dale Swope's firm, if the situation arises.
Dennis Phillips, Esq.
Florida plaintiffs' lawyer
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