Insurance….not fun to think about, but necessary.

I’ve had on many occasions the very unpleasant task of sitting across from a client and telling them that the person who injured them didn’t have enough to cover their losses or that they don’t have enough coverage to handle the claim being made against them.

The most common answer to “what coverage do you have?” is “I’m OK, I’ve got full coverage”. However that’s just a general description. It’s like someone telling you “I’ve got a vehicle…but you still don’t know if it’s a car, truck, SUV, etc.

Full coverage just means you have most, if not all, of the major coverage categories offered to you. Everything depends on the details.

You need: Liability: Enough so that the person you injure in an accident takes your insurance money and doesn’t come after you. If you are “judgment proof”, for example have no regular job, no career, no assets, then you may be able to get away with the Kentucky required minimum of $25,000 per person, $50,000 per accident. Even then, you’re betting that bankruptcy will save you from a judgment that could follow you for 15 years or more.

If you don’t fit that category, then raise your limits to what you feel keeps you safe from a judgment that could attach your house, your vehicles and your paycheck. I usually recommend 100/300 (that means $100,000 per person and $300,000 total per accident) as about the least a person of average means should have. You’ll be surprised just how little that raises your premium over the minimum, depending on your company and your driving record. If you have more to protect, get your limits up higher and consider a personal umbrella policy to raise it to one million. That is a policy that starts where all of your others leave off and usually costs somewhere around $250 to $600 per year,  again depending on your record and your company.

Property damage: That’s the amount that covers the vehicle or other personal property you damage. The state required minimum in Kentucky is $10,000 and it doesn’t take much looking around the average parking lot to see that most of the vehicles, two and four wheeled, would cost more than that to replace. With the higher liability limits above, the property damage limits will be higher.

Again, the idea is to have enough insurance so that the person harmed does not have to come after your personal assets to be made whole.

Collision: That’s the coverage that lets your company pay for fixing your car or motorcycle. It can apply regardless of whether you or the other person is at fault.

Uninsured Motorist: This one usually gets an argument. Why, people say, should I have to buy coverage to cover what somebody else doesn’t have? Aren’t they supposed to be insured? Yes, but the simple fact is that a lot of them aren’t. If you’re in an accident in which an uninsured is at fault and you don’t have uninsured coverage, your medical bills, lost wages (above the PIP…see below) and pain & suffering aren’t going to be compensated.

Underinsured Motorist: This means that if the guy who injures you has less coverage than it takes to compensate you for your damages, your own company steps up and covers you for the difference, up to the limits you’ve purchased, if necessary. It does not cover property damage to your vehicle.

For both Un-insured and Under-insured coverage, you should buy as much as you feel comfortable with. As a rule of thumb, for under-insured, count on the other guy having no more than $25,000 and for Un-insured, of course, figure on him having nothing.

Personal Injury Protection (also known as “No-Fault” or “Basic Reparation Benefits”):  This is insurance on your vehicle that pays your medical bills and some lost wages, and a few other items, regardless of who is at fault for the accident.  If you have car insurance, it’s included in the policy. If you have a motorcycle, this subject is of vital importance in Kentucky because of a peculiar quirk in the Kentucky Motor Vehicle Reparations Act, KRS 304.39 et seq. as it applies to bikes. The subject can’t be covered completely in the space allotted here (there’s an article about it elsewhere on my website) but remember this. You  should either purchase Personal Injury Protection (not “pedestrian injury protection”…that’s something different) coverage as a separate line item on your policy with a separate premium or you  should complete the form to reject it for motorcycles only. If you don’t do one or the other, you may have a $10,000 setoff in what you can recover from the person who injures you in an accident on your bike.  Standard PIP is $10,000,  but additional coverage in similar increments can be purchased separately.  There’s a very good reason for doing that, but it’s more complicated than will fit here.

The above is not intended to be a comprehensive treatment of a very complicated subject. There are many large volumes of law books dedicated to insurance coverage and its many confusing subtexts. It is only a brief overview, designed to get you thinking about a topic you don’t want to have to think about, but must.

All of these recommendations will raise your premium, but probably not as much as you think.   The “takeaway” is this: Remember that the purpose of insurance is not to be as cheap as possible, but to protect what you have to lose.

It was the other guy’s fault !….well, except for

No one ever wants to think that they were at fault for their own accident, even a little bit. But it sometimes happens that accidents have more than one cause.  An accident is only the last event in a chain of decisions and circumstances .  Just because you might have made one of the mistakes that resulted in the accident, that doesn’t mean you were the only one at fault and it doesn’t mean that you can’t recover at least part of your damages from the other person.  A brief primer:  Kentucky used to use the “contributory negligence” standard which, in simple terms meant that if you were at all responsible for your own injuries, you couldn’t recover your damages from the other person at fault.  About 25 years ago, that was changed to “comparative negligence” meaning that a jury could determine the percentage of fault to assign to all of the participants to an accident and the injured person could still recover the percentage of fault not assigned to him or herself.  (None of this has anything to do with what is called “No Fault”, which refers to Personal Injury Protection benefits, a different subject for another time.)    In other words, if you and The Other Guy have a wreck that is due to both of you making an equal mistake, you (and he)  may be found 50% at fault and still get 50% of your damages reimbursed.  Depending upon the facts, the percentages could be different.   You may even have been sued by The Other Guy and still end up with the jury apportioning some (maybe even the majority) of fault on him.  There are a lot of factors that come into play when apportionment is being done by a jury, far too many to go into here, but the bottom line is, don’t give up on your own claim, even if it wasn’t all The Other Guy’s fault !

Witnesses

“Why don’t they just tell the truth?” I hear that a lot when I tell clients that much depends on the witnesses we and the other side can bring to the case to tell what happened. The problem is that most people (there are habitual liers in the world, but that’s a whole ‘nother story for a different day’s blog) do tell “the truth” as they saw it….but that isn’t always the same thing the guy standing next to them saw. A lawyer once told me of a case he’d been in which involved a serious accident at a four-way intersection. All of the participants in the accident and the bystanders had strong testimony about who had which color light when the cars entered the intersection, though few of them agreed with each other. But the truth was that there was that there was no power on the light at all. No one had any color light, but that didn’t stop the witnesses from describing what they saw. We don’t see with our eyes, but rather with our brains. The eye is just a camera that sends images to our brain which interprets what it’s getting within its own experience and capability. Often in cases I’ve taken the depositions of witnesses who describe in detail what happened, but at some point say that they heard the collision and then looked up, or turned around, and saw the vehicles spinning from the wreck. Their mind then recreated the scene so that it made sense to them.  I’ve been in cases where witnesses and/or parties testify as to the way a fall occurred, only to have the video surveillance camera record completely contradict their versions. Everybody remembered it differently than the camera recorded.  Just because one witness doesn’t agree with another, or with the client, doesn’t necessarily mean they aren’t telling “the truth”….it’s just not the same truth as the one someone else saw.  The important thing is what will the jurors, the ones who get to make the decisions, find credible?  Everything depends on what their minds’s eyes “see” when the witnesses are testifying.

Malcolm, the office dog

Malcolm just happened one afternoon. My wife and my then 10 year old grandson went to the Humane Society “just to look”. In my years as a volunteer with that organization, I learned what the almost-always outcome of that scenario would be. Sure enough, there he was, sitting in a cage with a bunch of others, each trying to figure out just how this fate befell them. Brenda pointed at this scruffy face with the  simian brown eyes and said “Let’s see that one”. The adoption clerk told her that he’d just been brought to the cages from the sick bay and wasn’t too good at being on a leash. The dog was reluctant to move out of the cage until Stuart started walking .  Brenda said, “give the leash to him”. The dog’s head went up and he followed the boy as if this was what he’d been waiting for. Our fate was sealed. I was at the office and got the call to come bring him home and that was that.
He was given the name Malcolm because the shelter had him down as a terrier mix and my wife thought he looked Scottish. One of my heros from motorcycling is the amazing off road rider, Malcolm Smith, so the name seemed doubly appropriate.
Malc was an “owner giveup” who had been in sick bay because he’d had Parvo, a terrible disease with a high mortality rate. He’d finally been pronounced well and put into the adoption cages, as luck would have it, about 20 minutes before Brenda and Stuart arrived to claim him. He was docile and calm, just what two seniors like us needed and for the first few days, he settled right in. He had some residual nasal congestion, so we took him to Boonesboro Animal Clinic and got him checked over and a series of shots of antibiotics.
Then I went off on a four day motorcycle trip. I called home to check on progress. An exhausted Brenda said that the morning after I’d left, she had taken Malc out for his morning walk and a transformation had occurred. His nose had cleared up. He took in a deep sniff of the country air and suddenly, a new animal had taken his place. He felt GOOD and wanted everyone to know it.  At nine months of age, he was still puppy enough to enjoy being wild and he had some sick time to make up for.  It took another three months to calm him down and get him socialized, but the effort was well worth it.  Malcolm now spends several days per week here in the office, where his official duties are to greet visitors and be fawned over for a few minutes, then return to his sleeping place until the next one arrives. Despite being the Office Dog, he steadfastly refuses to answer the phone or take notes.

www.johnricelaw.com

The Office Dog

Mediation…What is it?

We used to try a lot of cases “back in the day”, but for about the last 15 years or so, the courts in Kentucky have been encouraging, and  often ordering, cases to mediation.  That means that once a case has been filed in court, there are only two ways it’s going to end:  Either by a verdict in a courtroom or by a negotiated settlement. I’ve been a trial lawyer for 25 years and a mediator since 1996. Mediation is an informal way of resolving cases without the uncertainty of a jury verdict and it does work. In my experience, about 90% of cases get resolved this way.  In the final result, a court dealing with an injury case can only decide that money does…or does not…change hands.  The judge and/or jury cannot make the accident not have happened or the injury less severe.  At mediation the injured party will not receive what they could possibly get on their best day in court, but they won’t get what the worst day in court can bring, which is nothing.  Anyone who has tried a lot of cases to a jury, and I have, knows that juries sometimes don’t do what you want or expect them to do.  With mediation, the client is in control of what happens and has the option to accept an amount certain, with no risk of loss, or to take the chance of a better result at trial.   (For my thoughts on how to value a case, see previous entries in this blog.)  

At mediation, the mediator (almost always another lawyer, not connected with the case) will listen to both sides present their respective evidence in summary form, then will divide the parties up into separate rooms for private discussions.  In those private sessions, the mediator will probe each party’s case, pointing out the strengths and weaknesses of both sides in an attempt to move the participants toward a resolution.  In most situations, “one side’s gotta come up, the other’s gotta come down”.  It’s not about meeting in the middle, but about controlling the risk for each side that a worse result might happen if someone else, i.e. the judge or the jury, gets to make the decision instead of the parties actually involved in the dispute.  When you leave the mediation with a signed agreement, there is no risk.  You’ve made the decision, you know what’s going to happen and it’s over.  For most cases in these modern times, it’s the better option.

What’s my case worth?

It sounds cold to talk about “valuing” a person’s injury in monetary terms, but the reality is that no court or jury can make the accident not have happened  or make any change in the injury that has occurred.  A monetary compensation is all that can be accomplished.  And when talking about money, anything is worth only what a buyer is willing to pay for it. In the case of a personal injury claim, the only measure of monetary value is what a jury in that venue will put on the last page of the jury instructions on the day the case gets tried. In Kentucky there are typically five elements of damage an injured person can ask from the person who injured them (or more commonly, from the at-fault person’s insurance company) and those are: 1) Past medical expenses, 2) Future medical expenses, 3) Lost wages, 4) Future impairment of power to earn money, and 5) Pain and suffering.
Some cases do add another element or two, but these 5 cover the vast majority.
The first four elements need clear documentation to support and if that proof isn’t there, the judge probably won’t allow that line on the instruction to the jury.  The last item, pain and suffering, is less clear and it often relies on the intangible factors that humans use to guage another’s pain. Each county in Kentucky is different in how its jury pools treat this element; the same kinds of cases with the same  evidence can deliver radically different verdicts in counties side by side.
While most cases settle in negotiation before suit or at mediation before trial, never making it to the courtroom,  the method of determining value is always the same….What would the jury do?  The lawyers on both sides have to use their experience and judgment to make the best determination they can about what that result might be if settlement is to be achieved. If they can’t agree, we get to find out for real just what the jury thinks.

www.johnricelaw.com

“if you don’t know where you’re going, you’ll end up somewhere else”

I’m a motorcyclist, the kind who believes that bikes are best enjoyed when heeled over in a turn. To get the best line through a turn, you look at it “backwards”, picking the place on the road where you want to come out, then that tells you where you need to go in. Evaluating a case has a lot in common with that approach. What sets the value of any injury case is only this: What will a jury in that venue put on the last page of the jury instructions on the day this case gets tried. In turn, that is determined, not entirely, but to a large extent, by what evidence they will hear and from whom they hear it. So when I talk to a client, getting the facts of the accident and their injuries, I have to think of it in terms of the far end of the process, the exit of the turn, so to speak. What jury instructions will I need, what evidence will I need to prove those elements and where will that proof come from. In interviewing the client, I want to know everything there is to know about that person, how they got to this point and what is this accident going to mean to the rest of their life and I have to put all of that in the context of where this case, this part of their life, is going to end up. I want them to come out of the curve on the right side of the road.

“Lawyer says he’s too busy to take my case”

About two or three times per month I get a call from someone saying that they’ve got a great case but all the lawyers they’ve called are too busy to take it. This one particularly rubs me the wrong way. I’ve been doing personal injury cases for a long time and I’ve never seen a lawyer who’s too busy to take a good case. But I have seen a lot of lawyers who don’t want to tell the person on the phone that they don’t have much of a case, so they tell them they’re “too busy” and send them on for someone else to finally give them the bad news. I say, tell ‘em the truth up front. As the statesman-lawyer Elihu Root put in, many years ago, “About half the practice of a decent lawyer consists in telling clients that they are damn fools and should stop”. I may not put it quite that way every time, but I believe it’s much better to tell your client, or prospective client, the bad news up front than let them think they have a great case when they don’t. To do otherwise leaves them feeling betrayed when it comes time to settle or try the case and the results they expected just aren’t there. Sometimes being professional means telling people things they don’t want to hear.

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