Insurance Issues

Appellate Court Finds Overbroad Settlement Offer by Insurance Company Was Not Made in Bad Faith

October 17, 2021 | Lebowitz & Mzhen

Earlier this year, a state court issued an opinion in a car accident case involving where the insurance company’s settlement offer was at issue. The case highlighted some challenges that can arise during settlement negotiations in the aftermath of an accident. The court was asked to decide whether an insurance company acted “in bad faith” when their offer to settle included a broad release of all claims against the driver at fault, but gave the victim’s attorney the option to revise the terms.

Do Insurnace Companies Need to Act in Good Faith?

Yes, insurance companies are required by law to act “in good faith” when trying to settle in order to protect the financial interests of the people they insure. That means they should make timely and reasonable settlement offers that try to fully compensate victims, making it likely that they will agree to settle. Drivers buy liability insurance all the time because they expect the insurance company to protect them from financial liability. In some states, like Maryland, drivers are required to have a minimum amount of liability insurance to cover potential bodily injury and property claims that may result from car accidents.

How Maryland Car Insurance Laws Can Help Accident Victims

July 16, 2021 | Lebowitz & Mzhen

Knowing the ins and outs of Maryland’s car insurance laws can help you stay financially protected should you become the victim of an accident.

For example, despite Maryland laws requiring drivers to carry car insurance, a recent report showed that about 14 percent of drivers in the state are still uninsured. The unfortunate person who is injured in a motor vehicle accident by an uninsured driver may still be financially protected, however, if she has purchased the right kind of insurance.

Like in most states, Maryland drivers must carry basic liability insurance to help cover the cost of injuries and damage to other people and their belongings in connection with an accident.

Insurance Disputes After Maryland a Car Accident

April 13, 2021 | Lebowitz & Mzhen

Insurance companies play a crucial role in ensuring that Maryland car victims are not left destitute after a disastrous accident. Although insurance companies boast the benefits of their policies, their interests lie in preserving their financial standing. As such, many insurance companies engage in bad faith practices to avoid paying out rightful claims to policyholders. When this occurs, injury victims should contact an attorney to discuss their rights and remedies.

Many car insurance disputes stem from an insurance company’s wrongful denial or failure to adequately settle a claim. Car insurance companies may offer several types of coverage to policyholders. This includes bodily injury protection, property damage liability coverage, uninsured motorist bodily injury coverage, uninsured motorist property damage coverage, and personal injury protection. Before purchasing vehicle insurance, consumers should consult with multiple insurance companies, ask for price quotes, and ask about deductibles and discounts. However, most importantly, motorists should review their policy and fully understand the terms before purchasing the policy.

What Is an Insurance Dispute?

Insurance disputes often arise because of an unclear or ambiguous term in the policy. This can present injury victims and their loved ones with significant issues while trying to medically and financially heal from an accident. Generally ambiguous terms are liberally construed against an insurer. However, the result of this analysis may still lead to unfavorable results for a plaintiff. For example, a court recently issued an opinion in a case stemming from a dispute between the family of a woman killed in a car accident and an insurance company. The woman died from injuries in a car accident with an employee driving a vehicle for a not-for-profit corporation.

Purchasing Uninsured Motorist Coverage in Case of a Maryland Car Accident

October 14, 2020 | Lebowitz & Mzhen

In Maryland, it is essential for drivers to purchase a specific type of automobile insurance called “Uninsured/Underinsured Motorist” coverage (UIM coverage). This coverage protects you if you are hurt in a Maryland car accident caused by someone who does not have insurance or does not have enough insurance to cover the resulting damages. For example, if Driver A is hit by Driver B, and incurs medical expenses of 100,000, they will likely seek to recover the $100,000 from Driver B. But if Driver B doesn’t have insurance, or only has enough insurance to cover $25,000, this may leave Driver A thousands of dollars in debt from an accident they did not cause. This tragic scenario can be avoided, however, if Driver A has UIM coverage.

UIM insurance is not just for individuals—companies can purchase it for company vehicles and employees. Sometimes, however, Maryland residents might think that they are protected by their commercial UIM insurance, when they are not. This is why it is important to carefully read each insurance policy, to avoid a situation like one discussed in a recent state appellate opinion.

According to the court’s written opinion, the plaintiffs in the case were a husband and wife, members of a pet and feed supply store limited liability company (LLC). The LLC had a commercial automobile insurance policy from the defendant, including UIM coverage for the LLC’s vehicles. One day, the wife drove her personal vehicle to a feed supply store to purchase inventory—a trip she made purely for business reasons. Whilst walking towards her parked car, she was hit by another vehicle in the parking lot. The driver of the second vehicle was an underinsured motorist, and had only $25,000 in liability insurance. The injured plaintiff suffered severe injuries, costing her over $200,000 in medical expenses. She could only recover $25,000 from the at-fault driver, however, and her personal insurance could not cover the full remaining amount, meaning she was not fully compensated for her injuries. Because of this, she submitted a UIM claim to the LLC’s automobile insurance carrier, the defendant in this case.

Maryland Court of Appeals Rules Insurers Must Pay Rental Expenses in Uninsured Motorist Claims

August 19, 2020 | Lebowitz & Mzhen

The Court of Appeals of Maryland recently issued a decision holding that insurers are required to pay rental expenses and other loss-of-use damages in uninsured motorist claims. Uninsured and underinsured motorist coverage is required by law in Maryland for every motor vehicle insurance policy issued in the state. The coverage is meant to protect insured drivers by covering their out-of-pocket expenses when involved in an accident with an uninsured or underinsured tortfeasor.

The state’s highest court considered whether the phrase “damage to property” in the state’s uninsured motorist law included the loss-of-use damages. Loss-of-use damages provide coverage for the period of time that the property could not be used, such as the expenses of a rental car while a vehicle cannot be driven. The court decided two cases involving the same legal issue. In the first case, the plaintiff was hit by an uninsured motorist and sought to recover rental car expenses from his insurer after the accident. In the second case, the plaintiff was hit by an uninsured motorist and sought to recover out-of-pocket expenses from her insurer.

Under section 19-509(e) of the Maryland Uninsured Motorist statute, a motor vehicle liability insurance policy must contain uninsured motorist coverage equal to the coverage set forth in Maryland’s financial responsibility law. That law requires coverage at least for claims for “property of others damaged or destroyed in an accident of up to $15,000, in addition to interest and costs.”

Court Determines When Statute of Limitations Begins to Run in Maryland Underinsured Motorist Claims

June 11, 2020 | Lebowitz & Mzhen

The Maryland Court of Appeals issued an opinion addressing when the statute of limitations begins to run against an insured motorist in an underinsured motorist claim against their insurance company. The case arose after an underinsured at-fault motorist offered $20,000 to an insured car accident victim. In April 2011, the plaintiff was braking her vehicle as she approached slowing traffic when the underinsured driver rear-ended her. After the initial collision, the plaintiff hit her brakes, but the driver slammed into her for a second time. The plaintiff suffered serious injuries and required several years of medical treatment.

The rear-end driver was underinsured, and her liability insurance covered up to $20,000 per person in bodily injury coverage. The plaintiff had uninsured and underinsured motorist coverage (UIM) of up to $300,000 per person. Two years after the accident, the at-fault driver’s insurance company offered the plaintiff $20,000 to release all claims against them, on the condition that the victim’s insurance company would waive its right to subrogation. Her insurance company agreed and began settlement negotiations. In January 2015, the plaintiff sent a formal demand letter to her insurance company requesting recovery under her UIM benefits. The company acknowledged receipt and notified her that a review was pending and requested additional medical documents. The insurance company contacted the plaintiff’s attorney in February, March, April, and June, to follow-up on its request. During this time, the insurance company did not deny the plaintiff’s claim.

In 2016, the plaintiff filed a lawsuit against the insurance company seeking the balance of unpaid damages not covered by the at-fault driver’s insurance company. The insurance company filed a motion to dismiss, claiming that the lawsuit was time-barred because the three-year statute of limitations had passed.

Contractual Disputes Between Maryland Policyholders and Insurance Companies

May 25, 2020 | Lebowitz & Mzhen

When an individual is involved in a Maryland car accident, one of the first steps that they may take to recover for their damages is to file a claim with their or the at-fault party’s car insurance company. Although many people expect their insurance company to protect them in these instances, there are several reasons that an insurance provider may deny coverage. Moreover, in some cases, Maryland insurance companies will deny applications to renew existing policies. Maryland motorists and accident victims should contact an attorney to determine their rights and remedies in these situations.

Often, car insurance providers will deny coverage to those individuals that they believe are likely to be involved in an accident, such as those who have a significant number of traffic violations, are too young or too old, have poor credit, or live out of the coverage area. In other cases, even if a person receives coverage, their insurance company may deny a specific claim. For example, a Maryland car insurance company may deny a claim if the other party claims that the policyholder is at fault.

Maryland is one of the only states that continues to follow pure contributory negligence rules. A Maryland driver who possesses any level of responsibility, even five percent, is not entitled to compensation. Insurance companies may also deny coverage if they do not believe that the claimant suffered any physical injuries. Finally, insurance companies may deny a claim by asserting that the policy does not cover the specific situation that occurred. This often happens when a claimant indicates that they are refusing specific coverage when signing the insurance policy.

The Benefits of Stacking Maryland Uninsured Motorist Coverage

May 13, 2020 | Lebowitz & Mzhen

Uninsured and underinsured motorist protection provides coverage for insured drivers involved in a crash with uninsured or underinsured drivers. Although uninsured and underinsured motorist coverage is required in Maryland motor vehicle policies, stacking uninsured motorist coverage is optional. Opting for stacked uninsured motorist coverage can benefit Maryland car accidents victims in the event of a crash, because stacking coverage can provide additional coverage beyond an insurance policy’s general policy limits.

Stacked uninsured motorist coverage is expansive and typically provides coverage whenever and wherever the insured is injured by an uninsured motorist. This means that an insured can stack or aggregate uninsured motorist coverage if the insured has multiple insurance policies. Non-stacked uninsured motorist coverage provides less protection and does not apply whenever and wherever the insured is injured. This means that it normally cannot be stacked or aggregated. Maryland’s Private Passenger Motor Vehicle Liability Insurance – Enhanced Underinsured Motorist Coverage law requires enhanced coverage to be offered under policies issued as of July 1, 2018. The law allows individuals covered on such policies to stack their uninsured motorist coverage.

A recent case from a state appeals court highlights the differences between stacked and non-stacked policies. In that case, the court found two individuals were not entitled to non-stacked uninsured motorist benefits where they had accepted stacked uninsured motorist benefits their policies with other insurers. Two individuals were injured when one of them was driving and was hit by another car that was driven by an uninsured motorist. The car was insured by a commercial auto policy in another individual’s name and provided non-stacked uninsured motorist coverage with a policy limit of $300,000. The two settled under the policy for $300,000. They also had three of their own insurance policies that provided uninsured motorist coverage. In addition, the parties settled under two of the other policies, which had provided stacked uninsured motorist coverage. The third policy insurer refused to pay because they had chosen non-stacked coverage.

Maryland Court Decides Time Limit for Filing Claim Against Insurer for Uninsured Motorist Benefits

April 27, 2020 | Lebowitz & Mzhen

Every motor vehicle liability insurance policy issued in Maryland is required to include uninsured and underinsured motorist coverage. Uninsured and underinsured motorist coverage protects insured drivers from paying out-of-pocket expenses for their injuries if the drivers are involved in a Maryland car accident with parties that are uninsured or underinsured. The goal of Maryland’s uninsured motorist statute is to provide protection for individuals injured by uninsured motorists.

Uninsured motorist coverage refers to when an insured is involved in an accident with a driver that does not have any liability insurance. Underinsured motorist coverage refers to when an insured is involved in an accident with a driver that does have liability insurance but whose coverage is less than is needed to cover the accident victim’s injuries. If an insured driver is injured in an accident with an uninsured or underinsured driver, the insured can proceed with two separate claims. The first is a tort claim against the uninsured or underinsured driver. The second is a contract claim against the insured’s insurance company for uninsured or underinsured motorist benefits.

In a recent case before a Maryland appeals court, an insured driver was hit from behind by the underinsured driver in April 2011. In April 2013, the underinsured driver offered the insured driver a settlement offer of $20,000 (the extent of the underinsured driver’s policy), which she later accepted. The insured driver continued receiving medical care until July 2014, and in January 2015, she requested underinsured motorist benefits from her insurer to recover additional underinsured motorist benefits from her insurance company. Under her policy, she was entitled to up to $300,000 per person for bodily injury that was caused by an uninsured or underinsured motorist. In September 2016, she filed a claim in court against her insurer seeking to recover her additional benefits.

Understanding When a Family Members’ Injuries Are Covered after a Maryland Car Crash

March 5, 2020 | Lebowitz & Mzhen

If you are found to be at fault for a Maryland car accident and your family members were in the car with you, you may wonder whether your family members’ injuries are covered under your insurance policy. Some insurance policies contain language, called exclusions, stating that the policy does not provide coverage to an insured or to the family member of an insured or to any family member of the insured residing in the insured’s household. Such provisions are written to prohibit coverage or to reduce coverage to those persons. The law on this issue varies depending on the state where the policy was issued. Some states prohibit household exclusions because many drivers and passengers are not covered if the family member is found responsible.

In a recent state appellate decision, one state’s supreme court considered the lawfulness of such provisions under state law. In that case, a man was injured in an accident while a passenger in a car covered by a policy the man and his wife had purchased from an insurance company. The man submitted a claim under the policy, but the insurance company refused to pay the man’s claim based on a partial household exclusion clause in the auto policy.

The court found that under that state’s law, partial household exclusion clauses were not valid. The state’s supreme court held that an auto policy in any coverage amount is not permitted to exclude or reduce liability coverage under household exclusion provisions “solely on the ground the claimant is a named insured or resident in the named insured’s household.”