Auto accidents happen every day on Orange County roads, such as I-5 Santa Ana Freeway and I-405 San Diego Freeway, and lead to injury and damages. Sometimes these cases will lead to a policy limit insurance coverage claim. In California, a pending law change may affect policy limit demands in Orange County and elsewhere. If you have been hurt in an accident because of someone’s negligence, talk to our Orange County personal injury attorneys at Law Office of Joseph Richards, P.C.
What Is A Policy Limit Demand In California?
It is understood in the state that insurance companies need to accept policy limit demands. However, the ideas of fair dealing and good faith in an insurance contract mean the insurance company should not expose a client to liability if a judgment is more than policy limits.
California Code of Civil Procedure Sections 999-999.5
California Code of Civil Procedure sections 999-999.5, which took effect on Jan. 1, 2023, sets up essential statutory requirements for people making policy limit demands in California. The idea driving the new law is to establish guidelines for using time-limited demands to settle personal injury lawsuits in many areas, including auto, commercial, and homeowner policies.
A time-limited demand is described as the following in C.C.P 999 (b) (2): “an offer before the filing of the complaint or demand for arbitration to settle any cause of action or a claim for personal injury, property damage, bodily injury, or wrongful death made by or on behalf of a claimant to a tortfeasor with a liability insurance policy for purposes of settling the claim against the tortfeasor within the insurer’s limit of liability insurance, which by its terms must be accepted within a specified period.”
The California statute, Senate Bill 1155, has established the standards below when the claimant puts forth a time-limited demand. The demand letter needs to have these attributes:
- First, the demand needs to be in writing.
- It must be called a time-limited demand.
- It must provide at least 30 days for the other party to accept the demand when delivered by email. It must provide 33 days if it is sent by conventional mail.
- The letter must clearly demand to settle the matter inside insurance policy limits. It also needs to satisfy all liens.
- The letter needs to state the loss date when the loss occurred, and a claim number, if there is one.
- It must provide a description of every personal injury that the person had.
- It must provide clear evidence of the claim and damages. It can include medical expenses and related records.
When the insurer gets the policy limit demand, it is allowed under the new California law to request additional information. Making this request does not mean there was a counteroffer or a rejection. If the insurer rejects the demand, the claimant must be informed in written form before the 30 days or 33 days expires. The new law will offer a more level playing field on both sides of California civil claims.
How Often Do Personal Injury Claims Exceed Policy Limits?
One of the problems with some personal injury claims is the policyholder’s policy limits may not be enough to cover all damages after an accident. So, how often do accident settlements exceed California policy limits?
California Vehicle Code 16451 states minimum liability coverage is set for all California drivers. This minimum includes property damage and bodily injury. The minimum is $15,000 for the injury or death of one person in one accident and $30,000 for the injury or death of more than one person in one accident.
You also must have at least $5,000 for damage to the other person’s property. But remember that these amounts are only the minimum; many people have much higher coverage.
What Happens If Your Claim Exceeds Policy Limits?
The law in California provides that insurers must review every detail of a claim and provide a fair settlement. However, most insurers think a ‘fair settlement’ is any number at or below policy limits. So, for example, if the driver who is at fault has $15,000 coverage for bodily injury, the injured person should be entitled to $15,000. But how often do claims go over policy limits in the state?
In most cases, depending on the circumstances surrounding the accident. If the injured party filed a personal injury lawsuit, the insurer might try to reduce or deny the claim. If this happens, it is common for the injured party to file a personal injury lawsuit against the insurance company or another party involved in the incident.
How To Sue Beyond Insurance Policy Limits?
If your accident claim exceeds the policy limits, there are several ways to obtain additional compensation. The first is to file a lawsuit against the at-fault person in the accident. If the liable person has significant financial resources, it could be best to file a lawsuit against them for the additional money they owe.
However, not all liable parties have the funds to pay for a judgment. Filing a personal injury lawsuit against a driver with a low income or no assets will probably not lead to more money for you. If that is the case, your Orange County personal injury attorney will consider other options.
One option could be to file a lawsuit against the insurer for operating in bad faith. If the insurer is trying to minimize or deny your claim, these tactics could be illegal in some situations. If your attorney can prove it, the insurer may be successfully sued for acting in bad faith when a claim goes over policy limits. The other option is to sue someone else involved in the accident.
Speak To Our Orange County Personal Injury Attorneys Today
If you were injured in an accident caused by someone’s negligence, you could be entitled to compensation for your losses and damages. Law Office of Joseph Richards P.C. has skilled Orange County personal injury lawyers who can help you. Contact our Orange County Personal Injury Attorneys now at (888) 883-6588 for a complimentary consultation. Our lawyers work with injured clients in Riverside County, Orange County, and San Bernardino County.