The world of California insurance is based on contract law, California statute, and insurance regulations. There are many overlaps, some of which can lead to confusion. Insurance disputes can cause a person to become disoriented -- because there is potentially a lot of issues that need to be resolved.
One such issue that arises frequently in my practice as an accident attorney: which, if any, insurance policy provides coverage for the accident. Two individuals involved in an accident does not mean that there will be only two policies in place at the time of the accident. Let me explain.
Yes, one could expect at least two insurance policies in place at the time of the accident if there are two parties involved (because California law requires insurance when driving); but, there could be two more if they were both driving during work, and within the scope of their work. Most employers carry commercial auto policies. Therefore, an attorney, representing an injured party, should certainly investigate to see whether there was an employer auto policy in place at the time of the accident.
But wait, there still could be more policies (more than 4)! Let us take the same hypothetical above, and add one set of facts. Two individuals are involved in an accident, during work, but one of them is borrowing his uncle's vehicle. Now, there could be a potential issue with the vehicle involved in the accident, because it is owned by a non-party to the accident. Insurance policies will sometimes follow the vehicle, particularly if the driver is a "permissive" driver, meaning that the driver had permission to drive it. With this new set of facts, there could potentially be 5 auto policies in place.
For fun we can add more. Take the second hypothetical but add yet another twist. Say two individuals are involved in an accident, during work, one of whom was driving his uncle's vehicle, but the accident was partly caused because a road was not properly maintained. The road should have been maintained by a government entity but it was not. Governments carry insurance too. The third hypothetical could involve 6 auto policies.
Because insurance can be carried by a number of parties, and can potentially cover the same accident, it is important to understand some of the basics of primary and secondary coverage.
More policies does not necessarily mean that an injured party will receive more. A person's damages are limited to the extent of the person's injuries. One million dollars of insurance will not be paid out (more often than not) for an extremely minor collision. However, more policies does mean that in the event of a catastrophic accident, a person will likely receive more.
At the outset, insurance carriers will determine who is the primary carrier. Those insurance carriers that are not primary are usually referred to as "excess" carriers, meaning that they will not have to pay out a claim unless the damages exceed the primary insurance's "limit." Typically the primary insurance carrier is the insurance carrier of the negligent party. Thus, if a primary carrier only has a limit of $15,000, it is more likely that an "excess" carrier will have to pay out a claim as well, if the injuries were significant.
Like I stated at the beginning of this blog post, it can be problematic if an injured party does not have the same knowledge as a seasoned personal injury attorney when it comes to insurance. It is extremely wise to contact a lawyer for the reasons above for a consult. Should you need to discuss a potential case, we welcome your calls and questions.