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Court Interprets Insurance Policy as “Per Accident” Rather Than “Per Insured Vehicle,” Limiting Company’s Liability

In a case arising out of a federal court of appeal, a tractor driver was driving down a highway with a trailer attached when the trailer detached from the tractor. The tractor driver pulled over to reattach the trailer, but before he completed the turn, another car crashed into the trailer, killing the car’s driver. The driver’s estate filed suit. The tractor and trailer’s insurance company came to a settlement with the driver’s estate but agreed they would still litigate what the policy limits were.

TrailerIn this case, both the tractor and the trailer were insured by the same insurance company. The insurance company argued that the policy limited its liability to $1 million per accident, despite the number of insured vehicles involved. The driver’s estate argued that the policy covered $1 million per vehicle involved in the accident, bringing the limit to $2 million because both the tractor and the trailer were involved. Under the settlement terms, the insurance company agreed to pay $1,000,000 if the insurance company’s interpretation was adopted and $1,550,000 if the estate’s interpretation was accepted. The trial court found that the estate’s interpretation was correct, and the insurance company appealed the decision.

In a lengthy opinion that parsed the language of the insurance policy, the federal court of appeals found that the insurance company’s interpretation was correct and that the policy was limited to $1 million. It found that according to the state’s law and the terms of the policy, the policy was limited to $1 million per accident, regardless of the number of covered vehicles involved. Thus, the insurance company only had to pay $1 million to the driver’s estate.

Automobile Insurance Law and Settlements in Florida

Insurance law almost always comes into play in car accident cases, and it can be extremely complicated. Generally, if there is ambiguity about a policy provision in Florida, the clause is construed in favor of the insured and against the insurer. Also, courts will consider the contract as read as a whole, rather than considering different provisions by themselves.

Under Florida law, an insurance company must act in good faith by keeping the insured’s interests in mind in considering a settlement within the policy limits. If an insurance company rejects a settlement within its policy limits and later is held liable for a sum beyond the policy limits, the insured then becomes liable for the excess amount. Even though the insurance company generally has the right to decide whether or not to settle a claim, it also has to keep the insured’s interests in mind. An insurance company can also be held liable for an excess judgment if it does not keep the insured’s best interests in mind if it rejects a settlement within the policy limits.

Have You Been Injured?

If you or someone close to you has to you been injured because of someone else’s carelessness or recklessness, you may be entitled to compensation. This may include medical expenses, property damage, and lost income, as well as damages for emotional distress. The skilled Pembroke Pines truck accident attorneys at Cohn & Smith have over 65 years of combined experience. We provide representation to residents of Pembroke Pines and other South Florida communities. To learn more about the options in your case, call today at 954-431-8100 or contact us through our online form.

Related Blog Posts:

Insurance Company’s Failure to Settle Case in a Timely Manner Results in Large Plaintiff’s Verdict, South Florida Injury Attorney Blog, August 17, 2016.

Slip-and-Fall Case Arising From City Sidewalk Allowed to Proceed Despite City’s Claim of Immunity, South Florida Injury Attorney Blog, August 4, 2016.

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