Expert: Anne - 8/14/2009

Question
Greetings. I have a question regarding an auto claims settlement I am trying to finalize.

A few yrs ago I was involved in an automobile accident where another driver blew through a red light and struck me, completely destroying my car. He was 100% at-fault and received a ticket for the accident. I suffered multiple fractures in my wrist and some back strain. Long story short, I sent-off my demand letter to his insurance company and they immediately responded offering to settle for their insured's BI policy limits. I obtained a copy of his certificate of coverage and decided to accept the offer with the intention of recovering the remaining demand amount from my PIP/UM benefits.

My question is, did I make a mistake by not notifying my insurance company prior to signing this release? And since I wasn't "made-whole" (thousands below my requested amount), will they still come after me given I possibly violated their subrogation rights.  Thank you for any advice.

Florida Driver

Answer
Hello,

It was probably a mistake not to involve your insurance company. If they paid for your medical bills, their right of recovery exists against them but if you release them, then against you. Please see: http://www.auto-insurance-claim-advice.com/Subrogation-of-Rights.html

Your notion regarding the made whole doctrine is correct, but it will probably not apply here. Subrogation of rights are secondary to your right to be made whole. However, this applies when a JURY determine the actual amount of damages and the limits of the policy of the person who hit you do not cover all your damages.

If you settle, most likely you sign a release to cover all damages, including medical bills. Meaning that you have agreed that the limits were enough and giving the insurance company rights of subrogation.

I hope this hopes,

Good Luck
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