Oregon and Washington auto insurers protect drivers who make mistakes, and cause others injury. That is what the insurance contract is all about. However, when someone buys an auto policy, they are buying a certain level or amount of coverage. For example, in Oregon, the minimum amount of liability coverage is $25,000.00, which has not changed in many years. The amount of coverage on the policy is referred to as the policy limit, and it plays a significant role in how insurance companies handle a claim.
In both Oregon and Washington, and probably most states, insurance companies have a legal duty to protect their insureds from having to pay out of their own pocket for damages they may cause in a car collision. In other words, insurance companies have to work to protect their customer from personal liability.
When can a person be subject to personal liability? This occurs when the damages proven exceed the amount of available insurance proceeds. For example, a person may be injured in an Oregon auto collision, retain an attorney, and take her case to trial. She may prove that she is entitled to $50,000.00 compensation, but the defendant who caused the collision, may only be insured for $25,000.00. A verdict in this case is called an “excess verdict.”
The insurance company defending the negligent driver must keep the risk of an excess verdict in mind, and work to protect their customer from this potential scenario. This can affect how a Washington or Oregon auto insurance company responds to an injury claim. Why? Because if the auto insurer had the opportunity to resolve the case for the policy limits, and keep their insured from being personally liable, but did not, then their own insured may have a claim against the insurance company for not properly handling the case. In Washington, the actual injured party may have a separate claim against the insurance company, which is known as a “bad faith” claim. This refers to the allegation that the insurance company negotiated in bad faith.
The policy limits of the negligent driver also determines whether our client will have an underinsured motorist claim.
We work with injured folks in Oregon and Washington, and make sure that if there is the potential for a policy limits claim, we properly document the claim, so that if we do go to trial, and obtain a verdict beyond the available policy limits, we can look to the insurance company to pay the whole verdict, or at least most of it.
To learn more about how policy limits can affect your case, call us at 503-325-8600. We answer these kinds of questions all the time.