The way your UM/UIM benefits work is that they don't "kick in" until the negligent party's limits are "exhausted." The UIM benefits are then only applicable if they exceed the 3rd party's limits. (For example, if your UM/UIM benefits only had a $15K limit, even if you settled with the 3rd party's carrier for their policy limits, since their 3rd party liability limits are higher than your UIM policy limits, you would not be able to collect anything more from your carrier.) In your case, you're lucky (and smart for having higher than minimum UM limits), so you would be able to collect the difference between the 3rd party's limits and your $50K limits. Since it sounds like the 3rd party insurer is willing to pay the policy limits of $25K, and assuming that the 3rd party does not have any assets to satisfy any judgment over and above the policy, it may be a wise decision to take the 3rd party policy limits settlement, show proof of that payment, and collect the rest of your UIM benefits. These issues can be tricky, so without trying to praise the virtues of PI lawyers too much (even though that's what I do), it's often wise to have counsel help you navigate these tricky issues.
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You should consult with a personal injury attorney in your area to help you evaluate the verdict potential of you case. If it is not more that $75,000, the combined limits the defendants coverage and you Underinsured Motorist coverage, then you should consider resolving your claims for the available coverage limits.
You always have the right to sue the defendant and if you obtain a verdict in excess of the combined coverages, you could attempt to collect the difference from the defendant, if he had significant assets in his own name; however, you will have a difficult time finding an attorney willing to pursue that path.
An attorney specializing in personal injury matters will be in the best position to advise you on the value of your claims.
You may need to UM insurer's permission to accept a settlement with the other driver's insurance so be careful. You could waive your right to UM benefits if you fail to get permission to settle if that is required. This is an example of why having an experienced attorney would benefit you. If you do not want to hire an attorney on a contigency fee basis consider paying one by the hour to review your situation to make certain your rights are protected. Good luck to you.
The information provided by me should not be considered legal advice and does not establish an attorney-client relationship. I am licensed to practice law in Florida and you should consult with an attorney in your area for legal advice. The information exchanged on avvo.com is not privileged and you should not share confidential information over this forum.
I would like to clarify a couple points under California Underinsured Motorist Law(UIM) (Insurance Code Section 11580.2) that were previously misstated. You cannot split your general damages (i.e. pain and suffering) and your special damages (i.e. medical bills). You get to access your UIM if your entire case is worth over the policy limits of the defendant. Assuming your case is worth over $50,000, you can settle with the defendant for his $25,000 policy and then settle with your UIM for up to $25,000 more, for a TOTAL of $50,000.00 Under California Unsurance law you cannot "stack" policies in this situation and get $75,000. However! California law allows you to use the auto policy of ANY relative living in your house at that time if it exceeds your 50/100 limits. I regularly find other relative's policies because I ALWAYS look. I always run a title report in your county to see what the defendant's assets really are. You can settle for his policy limit and contract for him to pay the difference too. Also, in California, the driver AND the registered owner are liable for your damages. If you settle for his insurance limits, have him sign a declaration of policy limits and no assets that is notarized.
Your problem in netting the highest amount possible is in paying your medical bills, which you are likely legally obligated to pay. (This depends on the contract for services you have with each provider. E. g. Kaiser does not require repayment of medical bills from UM settlements but ERISSA plans do)You certainly don't want them sending you to collections when the case is over. I regularly get my clients their money's worth by negotiating their medical bills DOWN. So to earn my my money's worth, one more thing: most insurance companies (except AAA) require you to pay them back any medpay you used, but a good California personal injury attorney will negotiate this down by at least 1/3. And if you received emergency medical services, you have to comply with the hospital lien act (Health & Safety Code 3040.5). If you used MediCal or MediCare services you better call me because it gets complex. I'm happy to talk to you on my cell phone at 559-304-1549 or you can look at information on my website at www.jdbohnlaw.com. Good luck!
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