Liability insurance policies are contracts. The insured pays a premium in exchange for liability coverage to a third party. The insurance company pays a third party for economic and non-economic damages caused by the insured. However, insurance claims for car accidents, personal injuries, and other accidents are not always straightforward.
Utah insurance laws can be confusing. Insurance policies are contracts, so contract law may apply. The terms and conditions of individual insurance policies may also impact a claim. Understanding the legal elements and principles of insurance contracts can help you prepare for an insurance claim.
Our Provo personal injury lawyers explain seven things injury victims should know about liability insurance:
1. There Must Be an Insurable Interest
Insurance policies cover different losses and subject matter. For the policy to apply to a situation, there must be an insurable interest. An insurable interest is a financial stake in an event, property, or person that could result in a monetary loss if specific things occurred.
For example, a homeowner has an insurable interest in the property. The policy is purchased to protect the homeowner against potential loss. Car owners purchase automobile insurance to protect against potential loss from accidents, vandalism, and other covered incidents.
2. The Right to Indemnity
Insurance policies are purchased to protect the policyholder from loss. The insurance company agrees to indemnify (i.e., compensate) the policyholder for covered losses. The insurance company is only liable up to the policy limits. The insurance coverage is for uncertain events stipulated in the insurance policy.
3. The Principle of Contribution
If you have more than one insurance policy covering the same incident, each insurance policy pays its proportion of the loss. The proportion paid is based on the policy limits and the total losses. You cannot receive the full policy limits on all policies unless the total damages exceed the combined limits of all the policies.
4. The Duty of Utmost Good Faith
All parties to an insurance company have a duty to act in good faith. The insured (policyholder) must pay the premiums on time and meet any conditions under the policy. The insurer (insurance company) must provide coverage as dictated by the insurance contract. Bad faith insurance practices often seek to deny the insured the benefits of the policy.
5. Requirement for Proximate Cause
Proximate cause refers to the legal connection between a party’s negligence and blame for causing the accident. For parties to be responsible, there must be a sufficient connection between an act and the person’s injuries. There could be several parties who contributed to the person’s accident. If so, each party could be held liable for their percentage of blame.
6. Duty to Mitigate
The insured has a duty to take reasonable care to mitigate the loss from an accident or other covered incident. They may be unable to recover compensation for losses that could have been avoided.
Failure to mitigate damages may also apply in a third-party claim when an accident victim fails to take reasonable steps to reduce losses and harm. For example, an accident victim may fail to seek prompt medical treatment or follow a treatment plan. Suppose the insurance company proves the failure to follow a treatment plan or see a doctor immediately caused harm that could have been avoided. In that case, the accident victim might not receive a settlement for all damages.
7. The Right to Subrogation
An insurance company has the right to recover money it paid a policyholder or on behalf of the policyholder if a third party pays the claim because of negligence or other reasons that create liability.
One of the most common examples of subrogation in personal injury cases is health insurance policies. Suppose your health insurance company pays your medical bills after a car accident.
When you settle with the at-fault driver’s insurance provider, you receive compensation for the medical expenses and bills. Your health insurance company has the right to recover the amount of your settlement intended to pay your medical expenses. The company cannot recover more than it paid for the medical bills on your behalf.
Let’s assume you file an insurance claim with your insurance company after a car accident for an uninsured motorist claim. Your insurance provider pays your claim and sues the at-fault driver. The company is entitled to the proceeds from the lawsuit up to the amount it paid you for the claim. If the company recovers additional funds from the lawsuit, those funds are used to pay the costs of filing the lawsuit. Any remaining funds are paid to you.
Schedule a Free Consultation With Our Provo Personal Injury Lawyer for Help With Insurance Claims
Insurance companies often complicate the claims process to frustrate claimants and encourage them to accept unfair settlement offers. Call Parker & McConkie Personal Injury Lawyers to get help with a personal injury claim. Our Provo, UT, personal injury attorneys help you navigate the claims process to obtain the compensation you deserve after an injury or accident.
Contact the Personal Injury Lawyers at Parker & McConkie Today
For more information, please contact an experienced personal injury lawyer at Parker & McConkie Personal Injury Lawyers to schedule a free initial consultation today. We have 5 convenient locations in Utah, including Midvale, Salt Lake City, Ogden & Provo, UT. Clients can also visit our offices in Idaho Falls, ID & Rock Springs, WY.
We proudly serve Weber County, Utah County, Salt Lake County in Utah, Bonneville County in Idaho, Sweetwater County in Wyoming, and its surrounding areas:
Parker & McConkie Personal Injury Lawyers – Salt Lake City Office
466 S. 500 E., Suite 100,
Salt Lake City, UT 84102
(801) 851-1202
Hours: 24/7
Parker & McConkie Personal Injury Lawyers – Midvale Office
7090 Union Park Ave, #160,
Midvale, UT 84047
(801) 845-0440
Hours: 24/7
Parker & McConkie Personal Injury Lawyers – Ogden Office
2510 S Washington Blvd, Suite 160,
Ogden, UT 84401
(385) 402-8187
Hours: 24/7
Parker & McConkie Personal Injury Lawyers – Provo Office
37 E Center St, Suite 300,
Provo, UT 84606
(801) 876-4107
Hours: 24/7
Parker & McConkie Personal Injury Lawyers – Rock Springs Office
531 N Front St,
Rock Springs, WY 82901
(307) 205-7400
Hours: 24/7
Parker & McConkie Personal Injury Lawyers – Idaho Falls Office
2235 East 25th St. Suite #280,
Idaho Falls, ID 83404
(208) 418-0633
Hours: 24/7
