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Settled case illustrates the complexities of insurance and the laws of different jurisdictions.

Partner Gene Miller recently settled a case for a client for the liability policy limits and also obtained Personal Injury Protection (PIP) benefits from the client’s own insurance. The total recovery exceeds $300,000.00 and additional recoveries are expected. The case is a perfect illustration of the complexities of some cases that involve different insurance companies and the laws of different jurisdictions. The client lived in Washington, D.C. She was driving a car owned by a relative from Maryland. She was in an accident in Maryland when she was struck head-on by a Maryland driver.

Insurance coverage: The Maryland driver had liability coverage of $300,000.00 However, the car that the client was driving had $500,000.00 in underinsured motorist coverage. As a result, the client had available to her the liability coverage of the at-fault driver plus $200,000.00 of underinsured motorist coverage from the car’s insurance policy (the $500,000.00 of underinsured motorist coverage gets a credit for the $300,000.00 liability coverage leaving only $200,000.00 of underinsured motorist coverage available. Maryland has since changed their law so that enhanced underinsured motorist coverage can be purchased that does away with the credit). The insurance policy on the car the client was driving carried PIP coverage of $2,500.00. The client had her own personal insurance policy on her car with PIP coverage of $100,000.00 for medical expenses and $24,000.00 for lost income. The client was also covered by health insurance.

Injuries: The client suffered multiple severe fractures to her ankle, a strain to her knee, and multiple contusions. She required surgery to her ankle which involved the installation of metal plates and screws. Medical evaluations and care both before and after surgery were extensive. Her job required her to be on her feet all day so she missed a significant amount of time from work. Her recovery from the injury and the surgery took a long time. Her orthopedic group did not accept her health insurance so the client paid out of pocket for much of her care. Some care outside her orthopedic group was paid in part by her health insurance. The surgery was successful at repairing the fractures. However, the injury extended into the ankle joint and compromised the cartilage and tendons which has resulted in early degenerative changes. These changes and the presence of the plate and screws continue to cause her pain and stiffness. Total medical bills to date approached $70,000.00. Lost income approximated $18,000.00.

Liability Recovery: The liability insurance company tendered their policy limits of $300,000.00 without too much fight although they tried to get away with offering less than the policy limits which was immediately rejected. Although the liability limits were tendered, they could not be accepted without jeopardizing the underinsured coverage of $200,000.00. Under Maryland law, the liability policy limits cannot be accepted without first placing the underinsured motorist insurance company on formal notice and obtaining their permission to accept the liability limits. The underinsured motorist company did so and the liability limits were accepted.

Underinsured Motorist Coverage: The settlement with the liability insurance company will allow the client to access the underinsured motorist coverage. Unfortunately, the underinsured motorist insurance company has engaged in “games” and does not appear to be serious about resolving that part of the claim. They first claimed to have not received the demand from us. However, they did receive our request to accept the liability limits, which had all the same documents. They then stated and continue to state that they have not had a chance to evaluate the claim despite having had all the documents for several months. In the meantime, the client continues to have symptoms and is exploring further treatments including injections and possible future surgery. It is fortunate that there is additional insurance coverage available should the client’s injuries require further medical treatment. The good news also is that the statute of limitations to sue the underinsured motorist insurance company is three years, running from the date of the initial underlying tender of the policy limits. It would behoove the underinsured motorist insurance company to make a significant offer now to “buy” their peace, but insurance companies are not known for paying a lesser amount now in anticipation of paying much more later. We are therefore preparing to file suit against them at a time of our choosing.

PIP: Depending on the jurisdiction, PIP coverage can be primary or secondary to health insurance. PIP can also be limited to paying only for deductibles, co-pays, or balances after health insurance pays. PIP also may not pay the actual medical bill, but may be reduced to what is judged to be a “reasonable charge.” They will also only pay 80% of lost income. The insurance policy on the car, paid their $2,500.00 PIP coverage quickly. The personal insurance policy took much longer. For no apparent rational reason, that insurance company took almost 6 months to start paying PIP benefits. They have now paid over $15,000.00 in medical benefits plus almost $16,000.00 for lost income. Additional payments for bills submitted are expected. In addition, we will pursue them for failing to pay certain bills and for arbitrarily reducing other bills. The administration of PIP claims is managed by Weiner, Spivey & Miller for a very modest flat fee.

By: Eugene C. Miller, Esq.

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Maura Weiner