Articles Posted in Car, Truck & Motorcycle Accidents

dollarsCompanies make billions of dollars leasing and renting their motor vehicles. You’d think they’d have some corresponding corporate responsibility to compensate individuals injured through no fault of their own by the negligent operation of their vehicles. They don’t.

The Florida Legislature once believed they did. They may still feel this way, but its will has been overridden by Federal law.

While section 324.021(9), Florida Statutes requires rental and leasing companies to maintain a substantial minimum amount of liability insurance on their vehicles operated in the state, it has been superseded by 49 U.S. Code Sec. 30106, also known as the Graves Amendment, which was enacted into law in 2005.

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car-insurance-policyFlorida liability insurance policies often provide coverage to many individuals, including those not named in the policy. For example, the standard Florida motor vehicle policy will insure vehicle owners and unlisted permissive users. This was the scenario in Contreras v. U.S. Sec. Ins. Co., 927 So.2d 16 (Fla. 4th DCA 2006).

Insurance companies are obligated under Florida law to act in good faith and with due regard for every insured’s interests. Boston Old Colony Insurance Company v. Gutierrez, 386 So.2d 783 (Fla. 1980). Under this duty, carriers must give fair consideration of any settlement opportunity and settle the claim when it can and should do so. Powell v. Prudential Property & Casualty Ins. Co., 584 So. 2d 12, 13 (Fla. 3rd DCA 1991).

In Contreras, a permissive user struck and killed a pedestrian while driving at a high rate of speed after consuming alcohol. Both the owner of the vehicle and the permissive user were covered under a U.S. Security motor vehicle liability insurance policy. Coverage under the policy for wrongful death was limited to $10,000.

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motorwayThe law disfavors windfall recoveries and insurance carriers are always seeking to be the beneficiaries of this public policy. One way carriers seek to benefit from this policy is by reducing jury verdicts by amounts recovered in damages from other sources. This is known as “Setoff.”

Uninsured and underinsured motor vehicle coverage is an optional form of insurance provided in motor vehicle insurance policies “for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefrom.” Section 627.727(1), Florida Statutes.

The statutory section contains the following setoff language:

Uber-300x145Riders and operators of Uber and Lyft rides will be surprised to learn that they are barely covered by insurance or not covered at all for economic losses and personal injuries resulting from crashes caused by uninsured and underinsured motorists.

Florida Statute 627.748 outlines the insurance requirements for Transportation Network Companies (“TNC”) such as Uber and Lyft. When the TNC driver is logged on to the digital network but is not engaged in a prearranged ride, the insurance coverage requirements are:

  • $50,000 for death and bodily injury per person,
  • $100,000 for death and bodily injury per incident,
  • $25,000 for property damage, 
  • Personal injury protection benefits, and
  • Uninsured and underinsured vehicle coverage (“UM/UIM”).

When the TNC driver is engaged in a prearranged ride, defined in 627.748(1)(b) as “when a TNC driver accepts a ride requested by a rider through a digital network controlled by a transportation network company, continuing while the TNC driver transports the rider, and ending when the last rider exits from and is no longer occupying the TNC vehicle,” the coverage limits above are bumped up to “at least $1 million for death, bodily injury, and property damage.”

Of the five varieties of coverage required by the statute, only the first four in the list above are mandatory. Uninsured and underinsured vehicle coverage, which is for the protection of persons insured under bodily injury policies who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness, or disease, including death, can be rejected by the “insured named in the policy” on behalf of all insureds under the policy. Section 627.727(1), Florida Statutes.

While the TNC statute, 627.748, leaves it up to the companies or the drivers to secure the required coverage, the reality is that the companies secure the coverage. This makes the companies “the insured named in the policy” authorized to reject the UM/UIM. Since UM/UIM adds to the cost of the insurance policy, TNC companies typically reject the coverage (Lyft) or select limits lower than the required BI limits (Uber). (627.727(1) allows insureds to reject altogether or select limits lower than the BI limits. Hence, Uber is able to select $10,000 in UM/UIM coverage even though its BI is $50,000/$100,000 or $1,000,000.)

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car-insurance-policyMotor vehicle insurance companies are expert at finding ways of denying coverage under policies. The successful denial of coverage can leave the insured with significant burdens.

The successful denial of coverage in Geico Indemnity Co. v. Walker, Case No. 4D20-764 (Fla. 4th DCA May 12, 2021), is a cautionary tale for Floridians, as the circumstances underlying the denial are exceedingly common.

In Walker, the Geico insured was the driver in a single-vehicle crash that killed him and his passenger. The passenger’s estate filed a wrongful death action against the insured. Geico denied coverage under the driver’s policy because the subject vehicle was not a listed vehicle on its policy. With respect to the incident, Geico asserted that the subject vehicle did not meet the definition of an owned, non-owned, or temporary substitute vehicle.

Following Geico’s denial, the two estates entered into a settlement agreement whereby damages would be determined by arbitration and the driver’s estate would assign its right to sue Geico for breach of duty to defend and to indemnify. The arbitration resulted in an arbitration award of $7,722,150 in total damages for the passenger’s wrongful death claim against the driver.

The case we are discussing is the appeal from the passenger’s lawsuit against Geico facilitated by the assignment. At the trial court level, it was established that the vehicle operated by the Geico insured was a 1992 Porsche, made available to the driver by the owner, his stepfather, to use and take care of for ten years without specific restrictions. The Porsche was not listed under the Geico policy as an insured vehicle. Instead, the vehicle was listed in the stepfather’s automobile insurance policy with Allstate, which also listed the driver as an insured driver on that policy.

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legal-documentI have written many times before that maintaining Uninsured Motorist (UM)/Underinsured Motorist (UIM) coverage is an important way of providing a level of protection to self and others from the negative consequences of a serious motor vehicle accident. The coverage is outlined in Section 627.727, Florida Statutes.

To the extent of policy limits, UM covers losses sustained by the insured, passengers, and family members caused by a party who fails to maintain Bodily Injury (BI) insurance. Hit-and-run and “phantom vehicle” scenarios also fall under UM coverage. UIM covers losses that exceed the limits of coverage available under the at-fault party’s BI insurance. Neither UM/UIM nor BI are mandatory coverages under Florida law.

A component of UM/UIM is stacked v. non-stacked coverage. These are the similarities and differences between the two:

Aggregating Policy Limits. When people think of stacked UM/UIM, aggregation is the first concept that comes to mind. Aggregation is the act of combing the coverage limits of two or more stacked UM/UIM policies. For example, if the insured owns two vehicles with $100,000 of per person stacked UM/UIM coverage on each, a combined $200,000 in coverage is available. If stacked coverage is maintained on one but not the other, even if the other has non-stacked UM/UIM, aggregation is not available.

UM/UIM Coverage Following the Owner. With one exception, both stacked and non-stacked UM/UIM follow the insured. The lone exception is when the non-stacked insured is occupying another owned vehicle. Coverage will be denied. The exception is allowed by s.627.727(9), Florida Statutes. Otherwise, both stacked and non-stacked coverage follow the owner, whether struck as a pedestrian 1000 miles from the insured vehicle, while riding a bicycle, or occupying a friend’s car. The stacked insured is covered even if occupying another owned vehicle.

UM/UIM Coverage Following the Vehicle. Both stacked and non-stacked UM/UIM cover the insured vehicle.

For more than 50 years, UM/UIM has been considered an important component of a system fabricated to provide a basic level of insurance protection to the public. This is why, in 1971, in the case of Mullis v. State Farm Mut. Auto. Ins.the Florida Supreme Court came down hard against an exclusion in a UM policy. (In Mullis, the insurance carrier sought to deny UM benefits to the son of the named insured, his father, with whom he was residing at the time he was injured by an uninsured motorist while operating a motorcycle.) Through its words, the Supreme Court cemented a mindset towards UM/UIM that remains influential still:

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texting1-reducedPunitive damages under Florida law can increase the amount of money awarded against a defendant by a factor far in excess of the amount awarded by the jury for compensatory damages. See, Florida Statute 768.73. Punitive damages are awarded “as punishment to the wrongdoer, for the purpose of deterring him and others committing similar violations of the law from such wrongdoing in the future. Therefore exemplary damages are, as it has been said, allowed by the law, not as a matter of compensation to the injured party, but because of the quality of the wrong done by the tortfeasor, from which the injured party suffers.” Florida East Coast Railway v. McRoberts, 111 Fla. 278, 149 So. 631, 632 (1933).

With its roots in early common law, the doctrine has since, to some extent, been codified in sections 768.72-768.737 of the Florida Statutes. However, reference to case law remains important to understand procedure and parameters.

The plaintiff must overcome high hurdles before being allowed to make a claim for punitive damages. A showing based on record or proffered evidence of intentional conduct or gross negligence is required. The burden is even greater when seeking to impose punitive damages on an employer, principal, corporation, or other legal entity. See s. 768.72, Florida Statutes.

dollars-254x300Workers injured in motor vehicle crashes while in the course and scope of employment may be eligible for compensation through uninsured/under-insured (UM/UIM) motor vehicle insurance. UM covers losses sustained by the insured, passengers, and family members through the fault of a party who fails to maintain Bodily Injury (BI) insurance. Hit-and-run and “phantom vehicle” scenarios also fall under UM coverage. UIM covers losses that exceed the limits of coverage available under the at-fault party’s BI insurance. Those same injured workers could also be eligible for workers’ compensation benefits for the same accident.

Section 440.39(3)(a), Florida Statutes (2019) states that in actions by the employee against a tortfeasor, the employee or his representative “shall sue for the employee individually and for the use and benefit of the employer, if a self insurer, or employer’s insurance carrier, in the event compensation benefits are claimed or paid….” Id. This means that the workers’ compensation insurance carrier has a lien against any judgment or settlement ultimately recovered by the employee. Id. 

UM/UIM benefits are not subject to the workers’ compensation lien. See Volk v. Gallopo, 585 So.2d 1163 (Fla. 4th DCA 1991).

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motorway-300x224Florida is one of only a handful of states that operates under a No-Fault system for paying medical expenses incurred in connection with motor vehicle accidents. Florida’s No-Fault Law, commonly referred to as “PIP” (personally injury protection, is contained in sections 627-730-627.7405 of the Florida Statutes. There is a dollar limit as to how much is covered under the No-Fault Law. Section 627.736(1) provides as follows:

REQUIRED BENEFITS.An insurance policy complying with the security requirements of s. 627.733 must provide personal injury protection to the named insured, relatives residing in the same household, persons operating the insured motor vehicle, passengers in the motor vehicle, and other persons struck by the motor vehicle and suffering bodily injury while not an occupant of a self-propelled vehicle, subject to subsection (2) and paragraph (4)(e), to a limit of $10,000 in medical and disability benefits and $5,000 in death benefits resulting from bodily injury, sickness, disease, or death arising out of the ownership, maintenance, or use of a motor vehicle….

Florida jurisprudence allows individuals involved in accidents to seek damages for pain, suffering, mental anguish, and inconvenience because of bodily injury. These are known as non-economic damages. Florida’s No-Fault Law makes obtaining these damages in motor vehicle crash cases more difficult than in other types of accident cases. This is because of the unique requirements outlined in s. 627.737(2):

In any action of tort brought against the owner, registrant, operator, or occupant of a motor vehicle with respect to which security has been provided as required by ss. 627.730-627.7405, or against any person or organization legally responsible for her or his acts or omissions, a plaintiff may recover damages in tort for pain, suffering, mental anguish, and inconvenience because of bodily injury, sickness, or disease arising out of the ownership, maintenance, operation, or use of such motor vehicle only in the event that the injury or disease consists in whole or in part of:

(a) Significant and permanent loss of an important bodily function.
(b) Permanent injury within a reasonable degree of medical probability, other than scarring or disfigurement.
(c) Significant and permanent scarring or disfigurement.
(d) Death.
The primary battleground in the fight for non-economic damages is part (b), which involves more subjectivity than parts (a), (c), and (d). Typical examples include claims of back, neck, and knee pain. Defendants argue that there hasn’t been an injury or that an injury, as visualized in diagnostic testing such as x-rays and MRI imaging, is preexisting and unrelated to the accident.

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motorway-300x224We have represented many people who have benefited from having UM/UIM insurance. We have represented many more people who have lost out by not maintaining the coverage.

UM covers losses sustained by the insured, passengers, and family members through the fault of a party who fails to maintain Bodily Injury (BI) insurance. Hit-and-run and “phantom vehicle” scenarios fall under UM coverage. UIM covers losses that exceed the limits of coverage available under the at-fault party’s BI insurance.

Florida is one of only a handful of states that does not require owners of registered motor vehicle to maintain Bodily Injury (BI) insurance, which is the type of third party coverage that compensates individuals damaged by an insured’s negligent operation of a covered motor vehicle. Since it is not mandatory and costs the policyholder more to maintain, a large percentage of motorists do not purchase the coverage. Instead, these motorists limit their coverage to the minimum mandatory of Personal Injury Protection (PIP) and Property Damage — Liability. (Property Damage — Liability operates like BI, but for personal property. From this curious arrangement, one could conclude that the Florida Legislature, who creates statutory law, places more value on personal property than on bodily injuries.)

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