The Value of Your Injury Claim vs. Available Insurance

If there is no insurance policy against which to make your injury claim and the defendant doesn't have deep pockets, the value of your case is effectively zero.

What if you are injured, and the person or company at fault has no liability insurance? What happens to your claim? How does the lack of liability insurance coverage affect the value of your personal injury claim? Read on to learn more.

Motor Vehicle Accident Claims

If you are hit by someone who has no car insurance, you would be able to file what is called an uninsured driver claim against your insurance company (assuming you have uninsured driver coverage). Drivers are required to have uninsured driver coverage in many states. You could make a claim against your own insurance company up to the limit of your uninsured driver coverage.

So, in this type of case, the value of your injury claim is affected by the amount of your uninsured driver coverage. If, for example, you are seriously injured, you might theoretically have a case worth $100,000, or more. But if you only have $50,000 in uninsured driver coverage, then $50,000 is all that you would be able to recover. Thus, the value of your case is based on the amount of the available insurance. However, truly uninsured drivers are rare because drivers in almost every state are required to have automobile insurance.

Slip and Fall Accidents

If you slip and fall on someone else’s property, you can usually make a claim against the property owner’s homeowner’s insurance or, if the property owner is a business, against the owner’s business liability policy. However, if the property owner or business owner has no insurance, then what happens?

If a property or business owner has no insurance, you can only recover on your claim if the property or business owner has some money available to compensate you for your injury or if there is equity in the property. Your own homeowner’s or renter’s insurance has no “uninsured property owner insurance” like automobile insurance does.

So, in a slip and fall case, the value of your claim is based on how much money the owner has to pay you damages. Unfortunately, most property or business owners who do not have liability insurance do not have much spare cash. This is just the way things work. People with a lot of money almost always have sufficient insurance coverage. If someone doesn’t have much money, or, if their property isn’t worth much, they may decide that it isn’t a good financial decision to purchase insurance or they just don’t bother to purchase insurance.

If the property owner has no insurance and no available cash, you might be able to get something out of the value of the property itself. If, for example, the property owner is broke or in bankruptcy, then the only way that you can be compensated for your injury is to force the property owner to sell the property. Your lawyer would likely put a lien on the property in the meantime to ensure that you get your share of sale proceeds when the property is sold.

So you can see how, in a slip and fall case, the value of your personal injury claim is directly affected by the availability of liability insurance. If there is no liability insurance, the value of your claim is directly based on the amount of money the potential defendant has or on the value of the property and its marketability.

Products Liability Claims

Another type of personal injury claim where insurance coverage is key is a products liability claim. Products liability claims involve defective products. However, uninsured claims against product manufacturers and sellers are rare because product manufacturers generally have either liability insurance or large amounts of assets. In that case, they are often referred to as self-insured.

But if you do have a claim against a product manufacturer or seller that has no liability insurance, your claim would proceed like the claim against a property owner, discussed above. The value of your claim would be limited by the amount of assets that the product manufacturer has available to pay a judgment against it.

What To Do When a Defendant is Uninsured

If you have a personal injury claim against a truly uninsured defendant, your lawyer will want to figure out as soon as possible whether the defendant has any ability to pay you a settlement or a judgment.

If the defendant has no assets or money whatsoever, then he/she/it is generally called "judgment proof," and there is rarely any reason to proceed with the claim. So your goal is always to go after a defendant that has some assets with which to compensate you for your injuries. This is called the "deep pockets" theory.

The deep pocket theory says that it is better to pursue a weaker case against a defendant with some insurance or assets than a stronger case against a defendant with no money or assets. After all, even if you win a million dollar judgment against a defendant with no money or assets, you still won’t get any compensation for your injuries because the defendant has no money with which to pay the judgment.

See our article on Injury Compensation Beyond Insurance Limits for some other options on collecting on your damages.

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