Un-insured under-insured
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Un-insured under-insured
15 yr old female- passenger, suffered broken /fractured c1 & other permanent injuries. The driver was a minor & cited with DUI for driving drunk. Driver’s parents limits were $50,000.00 & tendered immediately. I have a um rider for $200,000. If the Insurance company agrees to pay the policy limits can I still sue the minor’s father – & can he offer on his own to forward funds for her medical etc.? Is a settlement for the minor from my insurance taxable?
Asked on May 6, 2009 under Personal Injury, Florida
Answers:
L.M., Member, California Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
If the insurance company for the parents of the at-fault driver paid its limits of $50,000, you likely signed either a "covenant not to sue" or a release and waiver, barring your right to go back and sue for more money. I assume your rider is for both uninsured motorist (UM) as well as underinsured motorist (UIM) coverage. If and when your insurance company pays you (for your daughter, I assume?) part or all of the underinsured motorist policy limits, your insurer may, if you did not sign a full release and waiver, "subrogate" against (make a claim against) the responsible party to get the money back that they paid to settle your UIM claim. Chances are, if he couldn't afford to purchase more than $50K liability coverage, he doesn't have the money to reimburse your insurance company. Insurance settlements, in general, are not taxable as income by the IRS. Discuss it further with your accountant.
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
You really should ask your attorney for advice in matters like this as he or she is the only one who can give you formal advice you can rely on.
Settlements for medical expenses, loss of function, disability, or pain and suffering in personal injury matters are not taxable.
Normally the carrier tries to protect its insured from additional liability and seeks to get a release for everyone involved, including the car's owner. Assuming that you were not required to release the car's owner as well as the driver, the issue is whether Florida law imposes essentially strict liability on the part of the car's owner (I am NOT a Florida lawyer and do not know) OR the father was negligent and either knew his son drank or had some responsibility for keeping the son from driving, or the son was doing some act on behalf of the father (or family) and was in essence his father's agent. That's something for your lawyer in Florida to address.
As you know, you also have a claim against your company on the under-insured motorists coverage. (THAT WAS VERY SMART -- MOST DRIVERS FOOLISHLY TRY TO SAVE A FEW DOLLARS AND DO WITHOUT IT.) As to whether the carrier has any subrogation rights under under-insured motorists, so that it but not you can sue the parent-car owner, I do not know what Florida law or policies provide.
My best wishes for your daughter's full recovery. And ask your lawyer, If you don;t have one, visit www.AttorneyPages.com
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