Articles Posted in insurance coverage

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palm trees2As we discussed in a recent post, an injured person does not usually have the right to sue the insurance company of the person or business that caused the injury. There is a small exception to this rule, however. In situations when an injured person (or, in the case of death, his or her family) has filed a lawsuit against the negligent person or business and obtained a judgment, but the insurance company refuses to pay the injured person the money to which he or she is entitled under the judgment, the injured person may be able to sue the insurer directly.

In the case of Morales v. Zenith Insurance Company, the family of a man who was killed on the job filed suit against the man’s employer.  According to the family’s complaint, the man was killed by a falling palm tree while working for a landscaping firm. The family filed a wrongful death lawsuit in state court in 1999, alleging that the landscaping firm’s negligence had caused the man’s death. A default judgment was entered against the firm. Later, a jury trial was held to assess damages, with the family ultimately being awarded $9.525 million.

The Workers’ Compensation Settlement

Meanwhile, the family accepted workers’ compensation benefits from the landscaping firm’s insurance company, which insured the firm for both workers’ compensation (“Part I”) and employer liability insurance (“Part II”). The employer liability insurance provision contained an exclusion to the effect that there would be no coverage for any obligation under workers’ compensation law. In 2003, the insurance company made a “final lump sum payment” to the family in exchange for a settlement agreement that purported to constitute an election of remedies by the man’s estate with respect to both the employer and the carrier. Including the lump sum, the family received a total of $100,000 in workers’ compensation benefits.

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802348_69751285.jpgA dispute over insurance coverage has developed between a Florida homeowners’ association (HOA) and its insurer after the mother of slain 17 year-old Trayvon Martin claimed compensation for the death of her son. Martin was shot and killed by a resident in the neighborhood represented by the HOA. The insurance company filed a declaratory action in an Orlando federal court asking the court to declare that it is not responsible for covering the HOA on the mother’s claim.

The Trayvon Martin case has become well-known and highly controversial. Martin was visiting his father, who lived in a gated community in Sanford. The teenager was allegedly walking home from the store on the night of February 26, 2012, when he was shot and killed by 28 year-old George Zimmerman, a neighborhood watch volunteer who claimed that he acted in self-defense. Martin’s family says that Zimmerman singled their son out because he was African-American, followed him through the neighborhood, and incited an altercation. Police arrested Zimmerman forty-four days after Martin’s death and charged him with second-degree murder. Zimmerman has entered a plea of not guilty and is out of jail with a $1 million bond.

Martin’s mother, Sybrina Fulton, filed a claim with Travelers Insurance, which covers the Retreat at Twin Lakes HOA. She requested in excess of $75,000 in damages for Martin’s death. She also filed a claim with the Florida Bureau of Victim Compensation, and was approved in March for a payment from the Crimes Compensation Trust Fund. Her claim to Travelers drew a quick response.

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The family of a former Polk County commissioner who was killed in an auto accident last year has filed a wrongful death suit, the Lakeland Ledger reported Jan. 13. According to the article, Marlene Duffy Young was killed in May when an oncoming driver crossed the center line and hit her vehicle head-on. The driver, William Boyd Johnson, was also killed, and Young’s husband and adult daughter were hurt. Blood tests on Johnson revealed that he had a BAC of .077 (just under the legal limit), as well as Valium and cough medicine in his body.

The wrongful death lawsuit names Johnson’s wife as a defendant, but it also names State Farm, the Young family’s auto insurer, and their insurance agent. According to the article, the Youngs are suing State Farm and the agent because the agent allegedly ignored their request for “stacked” underinsured motorist auto insurance. The Johnsons did not have enough insurance to cover the costs of the accident, and the Youngs contend that State Farm is wrongfully refusing to make up the difference, as it would be required to if the insurance had been stacked as they had requested.

“Stacking” your auto insurance means that the upper limit of your insurance policy increases by the number of cars you are insuring. For example, let’s say you have uninsured/underinsured motorist coverage with limits of 50,000/100,000. If you have two cars and you do not choose to stack, the limit is 50/100 on each car. But if you choose to stack, the insurance limits double to 100/200. If you have three cars, they would triple to 150/300. This increases your premium, of course. As you can see, this could make a substantial difference to a family like the Youngs, who had three of its members in the hospital at the same time after the accident. The cost of treating even one very serious injury can easily reach six figures.

The Youngs claim that State Farm wrongfully refused to provide the materials necessary to sign them up for the stacked coverage despite their request. Unfortunately, that is not an unrealistic claim. Despite what many people think, insurance companies are not here to help their customers — they’re here to make a profit, like all businesses. When insurance companies have to pay out a very large benefit, some of them look for excuses to avoid it, even when their own contract clearly obliges them to pay. This is called insurance bad faith, and as a breach of the contract you and the insurer both signed, it is illegal.

As a Broward County auto accident lawyer, I advise my clients to treat insurance adjusters politely but never sign, record or admit anything that makes them uncomfortable. And whenever necessary, I vigorously defend my clients from insurance bad faith and other unfair or illegal maneuvers by insurers. If you or someone you love has been victimized twice by an auto accident and an insurance company that won’t do the right thing, my firm, Cohn, Smith & Cohn, can help. To set up a free consultation on your legal rights and your options, please contact us online or call (954) 431-8100.

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