Auto Accident Attorney Insurance Claims 2 — Questions and Answers
Question 1: What is 'bad faith' in auto insurance and what remedies are available to policyholders?
- Unreasonable insurer conduct in handling claims; remedies include extra-contractual damages and attorney fees (Correct answer)
- Filing a fraudulent insurance claim
- Refusing to cooperate with an investigation
- The insurer canceling a policy without notice
Correct answer: Unreasonable insurer conduct in handling claims; remedies include extra-contractual damages and attorney fees
Insurance bad faith occurs when an insurer unreasonably denies, delays, or undervalues a valid claim, and can expose the insurer to punitive damages.
Question 2: What is the significance of a 'policy limits' demand in auto accident negotiations?
- It demands the full insurance policy limit to settle the case, which if rejected may expose the insurer to excess judgment liability (Correct answer)
- It caps the amount a plaintiff can recover in court
- It requires the insurer to pay immediately without investigation
- It allows the plaintiff to choose which insurance policy applies
Correct answer: It demands the full insurance policy limit to settle the case, which if rejected may expose the insurer to excess judgment liability
A policy limits demand within a reasonable time can expose an insurer to bad faith liability for the full verdict if they refuse and a higher judgment is entered.
Question 3: What is 'stacking' of auto insurance policies?
- Combining coverage from multiple vehicles or policies to increase available compensation (Correct answer)
- Purchasing multiple policies for the same vehicle to defraud insurers
- The process of prioritizing which insurer pays first
- Combining medical bills from multiple providers into one claim
Correct answer: Combining coverage from multiple vehicles or policies to increase available compensation
Insurance stacking allows policyholders to combine UM/UIM limits from multiple vehicles or policies to maximize available coverage.
Question 4: What is Personal Injury Protection (PIP) coverage and which states require it?
- PIP pays medical expenses and lost wages regardless of fault; required in no-fault states like Florida, Michigan, and New York (Correct answer)
- PIP covers only vehicle damage; required in all states
- PIP is optional coverage available only for motorcycles
- PIP pays property damage caused by the insured
Correct answer: PIP pays medical expenses and lost wages regardless of fault; required in no-fault states like Florida, Michigan, and New York
PIP is mandatory in no-fault states and covers medical expenses, lost income, and related costs without regard to who caused the accident.
Question 5: What does 'per occurrence' vs. 'per person' mean in auto liability insurance limits?
- Per person is the max per individual claimant; per occurrence is the total max for all claims from one accident (Correct answer)
- Per occurrence means the premium per year; per person means the deductible
- They are different terms for the same coverage amount
- Per person applies only to medical payments; per occurrence applies to property damage
Correct answer: Per person is the max per individual claimant; per occurrence is the total max for all claims from one accident
A 100/300 policy pays up to $100,000 per injured person and a total of $300,000 per accident regardless of how many are injured.
Question 6: What is an 'independent medical examination' (IME) in auto accident insurance claims?
- An exam ordered by the insurer with a doctor of their choosing to evaluate the claimant's injuries (Correct answer)
- An exam conducted by the claimant's own doctor to establish injury severity
- A court-ordered evaluation for criminal cases only
- An annual wellness check required by insurance policies
Correct answer: An exam ordered by the insurer with a doctor of their choosing to evaluate the claimant's injuries
An IME is an examination by a physician selected by the insurer to evaluate whether claimed injuries are supported, often used to dispute ongoing treatment.
Auto Accident Attorney Insurance Claims 2
What is 'bad faith' in auto insurance and what remedies are available to policyholders?