Appellate Court Reinstates Plaintiff’s Case Against Insurance Company of Bankrupt Driver

After a driver is involved in a South Florida car accident, they will likely make a claim with the at-fault driver’s insurance company, seeking compensation for the damages they sustained in the accident. In the event that the at-fault driver does not have insurance or does not have adequate insurance, the accident victim may then have to file a claim with their own insurance company.

Car AccidentInsurance claims, however, are not always approved. Insurance companies operate on a for-profit model and are often looking for ways to reduce their costs. This may mean trying to find ways to deny a claim that would otherwise be costly to the insurance company. A recent case illustrates the difficulties one motorist had when making a claim with his own insurance company following a serious car accident.

The Facts of the Case

The plaintiff and his wife were involved in a serious car accident with another driver. The plaintiff’s wife was seriously injured and later died before she could recover from her injuries. The plaintiff filed a personal injury lawsuit against the at-fault driver as well as his insurance company. In addition, since he believed that the at-fault driver’s insurance policy was not going to provide full compensation for his loss, the plaintiff named his own insurance company, based on the underinsured motorist provision in his insurance contract.

After the case was filed, the at-fault driver filed for bankruptcy. Under bankruptcy law, most of a petitioner’s debts and obligations are discharged. In this case, the personal injury case against the at-fault driver was going to be dismissed due to the bankruptcy filing. As a result, the plaintiff’s own insurance company sought for the case against it to be dismissed as well, citing state law that says a plaintiff can only recover underinsured motorist benefits from his insurance company when he is “legally entitled to recover damages” from the at-fault party. The insurance company’s argument was that, since the plaintiff could no longer recover compensation from the at-fault driver (due to the bankruptcy petition), the insurance company was no longer liable.

The court rejected the insurance company’s argument. The court explained that the bankruptcy petition merely placed an injunction on the plaintiff’s ability to collect any damages from the at-fault driver that he was awarded through the case. The court elaborated that the bankruptcy petition did not prevent a court from finding that the at-fault driver was legally responsible for the plaintiff’s injuries, only that he could not be required to pay the damages, if any were awarded. Thus, the court determined that the injunction preventing the plaintiff from recovering from the at-fault driver did not extend to the at-fault driver’s insurance company.

Have You Been Injured in a South Florida Car Accident?

If you or a loved one has recently been injured in any kind of South Florida car accident, you may be entitled to monetary compensation. While insurance companies should be fair when it comes to settling claims, the reality is that they are often looking for ways to get out of paying even the most valid claims. This can jeopardize or delay an accident victim’s compensation. At Friedman, Rodman & Frank, we do everything we can to hold insurance companies accountable for the actions of the drivers they insure. We have decades of experience handling South Florida car accident cases, and we would be happy to meet with you to discuss your case. Call 877-448-8585 to schedule your free consultation today.

More Blog Posts:

Determining Damages in South Florida Car Accidents, South Florida Personal Injury Lawyers Blog, published September 21, 2017.

Pre-Suit Requirements in Florida Personal Injury Cases Naming Government Defendants, South Florida Personal Injury Lawyers Blog, published September 7, 2017.

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