Case of the Week

Facts: Our client was severely injured by a drunk driver. In the collision, his clavicle was crushed and required multiple surgeries. The intoxicated driver, who was at fault for this accident, had only $15,000 liability coverage, which are the benefits we would pursue against a driver who was at fault for an accident. Fortunately for our client, the car he was driving had very substantial under-insured motorist benefits totaling $500,000. This means that if the value of this case is worth in excess of the insurance on the vehicle at fault, he can go back to his company for what are known as under-insured motorist benefits (UIM) which insured you against being injured by someone with inadequate insurance. It was clear that the value of our client’s case was worth in excess of the $500,000 in insurance on his policy but his company refused to offer the full amount.

Once an insurance company is on notice of a UIM claim and a claimant attorney’s makes it clear that the case is worth the total amount of that insurance or more, the insurance company has a responsibility to pay those benefits within a reasonable period of time. If the company fails to do this and a verdict or arbitration award is received in excess of the available insurance, the claimant can actually receive the full amount of the award or verdict rather than the limited insurance.

In this case, Jon Ostroff obtained an arbitration award on behalf of his client of $1.3 million dollars. Mr. Ostroff’s client immediately received the full $500,000 policy limit or received it within 30 days, but within the next six months, the claimant received most of the $800,000 that was awarded to him in excess of the $500,000 available under the applicable policy. Mr. Ostroff’s client was very tempted to accept a $350,000 offer from the insurance company made just a day or two before the arbitration commenced. Mr. Ostroff strongly urged his client to refrain from accepting that amount as he was confident that they could receive an arbitration award well in excess of the $500,000 policy limits and potentially receive more than that amount. Luckily, Mr. Ostroff’s client took Mr. Ostroff’s advice, and agreed to present the case at arbitration where they received an amount that was multiples of the amount offered prior to arbitration.