accident attorney Insurance Claims and Negotiations 2 — Questions and Answers
Question 1: What is 'subrogation waiver' and why would a plaintiff request it in a settlement?
- A release by the insurer of its right to seek reimbursement from the settlement, allowing the plaintiff to keep more of the recovery (Correct answer)
- A waiver of the plaintiff's right to sue the insurer
- A court order dismissing all liens against the settlement
- An agreement by the defendant to pay liens directly
Correct answer: A release by the insurer of its right to seek reimbursement from the settlement, allowing the plaintiff to keep more of the recovery
Negotiating a subrogation waiver or reduction with health insurers allows plaintiffs to retain a larger portion of settlement proceeds rather than reimbursing the insurer dollar-for-dollar.
Question 2: What is a 'structured settlement' in a personal injury case?
- Payment of the settlement in periodic installments over time rather than a single lump sum (Correct answer)
- A settlement that structures blame between multiple defendants
- A court-ordered repayment plan for a defendant
- Settlement paid exclusively to the plaintiff's attorney
Correct answer: Payment of the settlement in periodic installments over time rather than a single lump sum
Structured settlements (often using annuities) provide tax-free periodic payments to plaintiffs, offering financial security and sometimes a larger total payout than the lump sum alternative.
Question 3: What is 'excess verdict' exposure for an insurer?
- A jury verdict that exceeds the defendant's policy limits, potentially leaving the insurer liable for the full amount if it acted in bad faith (Correct answer)
- A verdict awarding more than the plaintiff requested
- Punitive damages that exceed compensatory damages
- A verdict in a case where coverage is disputed
Correct answer: A jury verdict that exceeds the defendant's policy limits, potentially leaving the insurer liable for the full amount if it acted in bad faith
If an insurer unreasonably refuses a policy limits settlement and the jury awards more than the policy limits, courts may hold the insurer liable for the entire excess verdict.
Question 4: What is 'stacking' of medical bills (billing inflation) and how do accident attorneys address it?
- Providers charging inflated rates knowing litigation is pending; attorneys negotiate reductions at settlement (Correct answer)
- The plaintiff seeking treatment from multiple doctors for the same injury
- The insurer bundling multiple claims into one payment
- The court consolidating multiple plaintiffs' cases
Correct answer: Providers charging inflated rates knowing litigation is pending; attorneys negotiate reductions at settlement
Medical providers (often on LOPs) may charge above-market rates in litigation cases; attorneys negotiate reductions to increase the plaintiff's net recovery from the settlement.
Question 5: What triggers an insurer's 'duty to defend' a policyholder in a lawsuit?
- Any complaint alleging facts that, if true, would potentially be covered by the policy (Correct answer)
- Only when coverage is confirmed after investigation
- Only when the policyholder formally requests defense
- When the verdict exceeds the deductible amount
Correct answer: Any complaint alleging facts that, if true, would potentially be covered by the policy
The duty to defend is broader than the duty to indemnify — if any allegation in the complaint could potentially fall within policy coverage, the insurer must provide defense even if coverage is uncertain.
Question 6: What is a 'release' in a personal injury settlement?
- A legal document signed by the plaintiff giving up all future claims against the defendant in exchange for the settlement payment (Correct answer)
- An insurer's authorization to pay a claim
- A court order ending the lawsuit
- A document releasing medical records to the insurer
Correct answer: A legal document signed by the plaintiff giving up all future claims against the defendant in exchange for the settlement payment
A general release is a complete waiver of all claims, known and unknown, related to the accident — once signed, the plaintiff cannot sue again for the same incident.
accident attorney Insurance Claims and Negotiations 2
What is 'subrogation waiver' and why would a plaintiff request it in a settlement?