Insurance Coverage Issues in Personal Injury Cases

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Comprehensive insurance is similar to collision insurance, except that comprehensive insurance will pay for damages to your car when you are not at fault.  Liability insurance pays for all expenditures, which are related to repairing any other cars involved in the accident.  Liability doesn’t cover the repair costs of your own vehicle since comprehensive and collision insurance covers those costs.

Liability insurance covers you from claims arising from an accident where there is bodily or property damage. There are three types of liability insurance; bodily injury, property damage, and uninsured motorist’s coverage.  Liability coverage protects you when an accident is your fault.  It will pay claims for medical expenses or lost wages.  If you’ve damaged someone’s property, you’ll need liability insurance for property damage to pay for repairs.  In the last instance, you are protected by uninsured or under-insured motorist coverage, which protects against an accident involving an uninsured or underinsured party.

Collision insurance pays for damage to your car resulting from a collision with another car, object or as a result of flipping, or a rollover accident.  It also covers damage caused by potholes.  Ever if you are at fault for the accident, your collision coverage will reimburse you for the costs of repairing your car.

Who is Covered?

The people who are covered by your auto insurance policy include yourself, and any of your family members, friends and associates that you let borrow your car.  Explicit permission is not required each time they borrow your vehicle.  They are covered as long as they have a reasonable belief that you permitted them to use your vehicle.

What Damages are Covered?

Comprehensive coverage covers your vehicle and other vehicles you may be driving.  It covers damage to your car if it is stolen, damaged by flood, fire, or animals.  It covers the cost of repairs to fix your vehicle, minus the deductible that you chose.

Which Vehicles are Covered?

Most insurance policies provide 30 days of automatic coverage for a vehicle that replaced a vehicle already on your policy.  Most policies also provide automatic coverage for a newly acquired vehicle, which is an addition to the vehicles already on your policy.  Motorcycles, farm vehicles, commercial and specialty vehicles may not be covered.  Higher deductibles will lower your monthly insurance premiums,, but cost  you more out of pocket if you are in an accident.

Insurance Coverage by More than One Policy

When the Driver is Not the Owner

In all auto in insurance policies, there is some provision for coverage that applies to permissive users of a vehicle under certain circumstances.  When the owner of a vehicle allows someone else to drive his car, the majority of authorities treat the car owner as sharing liability for an accident.  In an auto accident, the car owner’s part of the liability may be a condition of consequence.  Owner liability is that the owner gives permission to use the car deliberately.  When a person is driving a company car as an employee, liability is not only on the negligent driver, but also the employer.  It is the duty of the employer to check the driving record of all employees who may operate a company vehicle.

When You are the Passenger

Most states allow a passenger to recover damages against the driver if he or she was negligent in the accident.  If the other driver was negligent, the passenger may file a lawsuit against that driver.

Parents’ Liability for Minors

A parent is not automatically liable for an auto accident caused by his or her child.  However, a parent might be liable for damages under the following circumstances:

  • The parent was negligent in controlling the child’s injuring causing actions that were reasonably foreseeable to the parent;
  • The parent was negligent in allowing the child to use the automobile under foreseeable dangerous circumstances, (e.g. knowing that the child was inexperienced and/or incompetent to operate a vehicle);
  • The child was acting as an agent for the parent at the time of the accident, such as driving the family car for family purposes.

Employers’ Liability for Employees

An employer is subject to vicarious liability for auto accidents caused by its employee’s negligent driving.  The doctrine of “respondeat superior” provides that an employer can be held liable for negligent acts committed by its employees while they were within the course and scope of their employment.  Therefore, employers can be held vicariously liable for injuries caused by an employee’s negligence. 

Employers have been held vicariously liable when an employee was engaged in a business conversation using their cell phone when they got into an accident.  In addition, there have been cases which apply respondeat superior liability against the employer when they required an employee to drive a company-owned vehicle to and from work.

An employer might also be liable on theories of negligent hiring or supervision, if the employer didn’t exercise due care in excluding unsafe drivers from duties involving vehicle activity.  The employer should check his or her driving record and make sure that they have a valid license for their state and the number of moving violations within the last three years.

Uninsured Motorist Coverage

Uninsured or underinsured motorist insurance will reimburse you, a member of your family, or a designated driver if one of you is hit by an uninsured or hit-and-run driver.  This type of coverage comes into play when an at-fault driver has insufficient insurance to pay your loss.  This will also protect you if you are hit as a pedestrian.

Coverage for Property Damage

Property damage liability covers the cost of any property damage to another person’s property due to a car accident.  In most cases, it may be a vehicle, but it can also refer to buildings and other structures, such as stores, offices, homes, fences or lampposts.  Property damage liability coverage pays for the repair or replacement of thing you have damaged other than your own vehicle.  Property damage liability is a requirement in most states. 

No-fault Auto Insurance

Auto insurance laws establish a personal responsibility system that provides coverage when a driver is at-fault in an accident.  Only a few states maintain what is known as a no-fault system.  Under no-fault insurance, claims are paid regardless of who caused the accident.  However, it only pays for medical bills and lost income up to the limit of your policy.  Any expenses above the policy limit are not covered.

A no-fault insurance policy typically limit compensation for pain and suffering, emotional distress and future loss of income due to severe injuries.  Not all sates have no-fault statutes and several states have repealed their no-fault laws.

States with Thresholds

Drivers in no-fault states are barred from going to court to collect compensation for injuries or pain and suffering unless they meet a specific threshold of damage.  In mandatory no-fault states, lawsuits seeking compensation for human pain and suffering are permitted for injuries if they meet a certain threshold. 

There is a verbal threshold which may be expressed in verbal terms.  Any state that has a verbal threshold allows lawsuits only if the injured party can demonstrate serious or permanent injury.

States with a monetary thresholds require the victim to prove that his damages exceed a specific dollar amount in order to access the tort system to obtain damages for pain and suffering.

Several states utilize hybrid systems in which no-fault coverage supplements the required third party liability insurance.  In these states, there are no limits on lawsuits. 

All no-fault systems permit recourse against at-fault drivers for payment of economic losses in excess of the no-fault benefits.

Medical Payments and Health Coverage

When choosing a medical plan, it’s important to understand the differences between a Health Maintenance Organization (HMO) and a Preferred Provider Organization (PPO).  HMO is a prepaid health plan where the doctors that are in the network are already compensated for providing you health care.  With a typical HMO plan, you are required to choose a primary care physician (PCP).  The role of the PCP is to provide basic health care.  If you need to see a specialist such as a dermatologist, your PCP will need to make a referral to a dermatologist within the HMO network.

A PPO is a network of participating doctors in which your insurance company has negotiated a discount rate with.  As long as you choose health care providers within the network, you pay lower copayments and fees.  The large difference between an HMO and a PPO is that you can choose your own doctor within the PPO network.  If you don’t like any of the doctors in the network, you may choose an out-of-network provider.  In doing this, you will pay a higher out of pocket expense.  In addition, if you need to see a specialist, you don’t need a referral.  PPO plans have much higher premiums, larger deductibles and copayments.

Medicare and Medicaid

Medicare is a health insurance program for individuals 65 years of age or older and some disabled people under the age of 65.  It also covers individuals with permanent kidney failure requiring dialysis or transplant.

Medicare can be broken down into two categories.  The first part is hospital insurance coverage which covers inpatient care, a critical access facility which gives outpatient and inpatient services to people in rural areas, skilled nursing facilities, hospice care, and some home health care.  Most people do not pay for this if they or their spouse paid Medicare taxes while employed. 

The second part covers medical insurance, which pays for doctor’s services, outpatient hospital care and other medical services in which the hospital coverage may not cover.  These might include physical and occupational therapists and some home health care. 

Medicaid is a joint program between the federal government and the states.  It is their mission to provide health insurance coverage to people who are poor, disabled and elderly people who may be impoverished.  Medicaid is available only to certain low-income individuals and families who fit into an eligibility group that is recognized by federal and state law.  To qualify for Medicaid, an individual must meet certain criteria such as your age, if you are pregnant, disabled, blind, or your income falls below a certain amount.

State Medicaid program must cover inpatient and outpatient hospital services, physician, midwife and certified nurse practitioner services, laboratory and x-ray fees, nursing home and home health care, early and periodic screening, diagnosis and treatment for children under 21 and family planning.  Each state has the authority to cover additional or optional services and receive federal matching funds.

Workers’ Compensation

Workers’ Compensation is an insurance program, which provides medical and disability benefits to individuals who may be involved in a work-related injury or accident or those who acquire an occupational disease.  Workers’ Compensation protects both employees and employers.  Every employee that is covered has a right to benefits if they become injured on the job.  In return, the worker forfeits the right to sue the employer for job-related injuries. 

Workers’ Compensation laws are designed to ensure employees who are injured or disabled on the job are provided with a fixed monetary award.  This eliminates the need for litigation.  It also provides benefits to dependents of workers who are killed in work-related accidents.

Some laws also protect employers by limiting the amount an injured employee can recover and eliminating the liability of co-workers in most accidents.

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