Insurance carriers would like us all to believe that they are our partners in adversity. Tree fell on your house? The calm insurance professional is right there to help you with your claim. Attacked by lions? Your insurance agent will teleport you to safety. Aliens destroyed your vacation home? Don’t worry, you’re covered!
You know that insurance companies are in business to make money. They collect premiums in the hope that nothing bad will ever happen to you. When something does happen, they cover part of your loss, but you are left holding the bag for your deductible, any exclusions or exceptions and, in some cases, the part of a judgment against you that exceeds your policy limit. You agreed to some of these terms when you bought the policy, but sometimes the insurance company steps over the line.
An excess judgment is a great example of how your insurance company can look like it’s helping, but, in fact, it is acting in its own best interests. If you don’t fight it, you can lose big.
An excess judgment is a damage award to a third party that exceeds your policy limits. Our website offers a great example, along these lines: You’re in an accident and the other driver files a personal injury lawsuit against you. Your insurance company sits down to negotiate a settlement on your behalf. Your policy limit is $100,000, and the other driver offers to settle for exactly that amount.
Your insurance company, however, does not want to pay $100,000. You were clearly at fault, and the other driver’s loss easily amounts to $100,000. Still, your insurance company offers $50,000, take it or leave it.
There is a trial, and the jury awards the other side $500,000. You now have an excess judgment of $400,000. But your insurance company is only obligated to pay up to the policy limit.
At the moment the insurance company refused a reasonable settlement within policy limits, it may have put its own interests ahead of yours. That would mean it acted in bad faith.
The attorneys at Ver Ploeg & Marino have the experience and the skills necessary to help policyholders resolve claim disputes like this. Insurance companies are supposed to protect their policyholders from loss. We work on our clients’ behalf to make sure insurance companies keep their promise.Share