Posts Tagged ‘coverage issue’

Pam’s best friend Paula always seemed to be on the wrong side of luck. Paula had recently had her license suspended because of a D.U.I. conviction. Paula was pretty much dependent upon Pam to take her wherever she needed to go.

On one occasion though, Paula had to go downtown to pick up some medication and asked Pam to loan her the car to take her on this very short trip. Pam knew that Paula’s license had been suspended but for some reason, since it was such a short trip, she said it was ok.

Unfortunately for both ladies, Paula’s bad luck continued and she rear ended another vehicle on Main Street. A law suit ensued and Pam’s insurance company denied coverage.

ISSUE: Is Pam’s insurance company obligated to defend with the auto accident that Paula was involved in?

ANSWER: No. Insurance policies on automobiles almost always have a provision that if the owner of the policy allows a non-licensed or impaired driver to drive their vehicle, then that insurance company will no longer be responsible if an accident occurs. Under no circumstances should an owner or family member of an auto ever allow an individual to drive a vehicle who is not legally allowed to do so.

Disclaimer: The above article is for instructive purposes only and each case is fact sensitive. Consultation with an attorney should be obtained instead of reliance upon the legal issues discussed in this column.

Jennifer was a passenger in a car being driven by her friend, Carol. While going down Main Street in Hawley, a car came out of one of the side roads being driven by Madison. Madison ran a stop sign and drove her vehicle directly in front of Carol’s vehicle, resulting in an accident. Jennifer was injured in the accident and suffered a broken shoulder as well as a bad neck sprain.

When Jennifer brought suit against Madison, Madison’s lawyer joined Carol as an additional defendant in the lawsuit, stating Carol was also partially to blame because Carol did not keep an adequate lookout at the time of the accident.

The case went to trial, and Jennifer was awarded $150,000. Madison was found to be 95% negligent and Carol only 5%. Unfortunately, Madison only had $15,000 in coverage, while Carol had $100,000 in coverage.

Issue: How much can Jennifer collect from Carol’s insurance company?

Answer: While it seems unfair, Jennifer is entitled to collect the entire $100,000 from Carol’s policy. She will have collected $115,000 out of the total verdict of $150,000. Carol’s insurance company will have a right to try to recoup some of the monies directly from Madison, but the likelihood of that happening is very unlikely.

This is referred to as joint and several liability that allows these types of outcomes. It is still the law in Pennsylvania and, as mentioned before, has resulted in many unfair outcomes where people that are found only slightly negligent bear the greater the cost of covering judgments.

Disclaimer: The above article is for instructive purposes only and each case is fact sensitive. Consultation with an attorney should be obtained instead of reliance upon the legal issues discussed in this column.