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Insurance Company Has An Obligation To Settle A Lawsuit On Behalf Of Its Insured Within The Policy Limits Or Face Liability For An Excess Verdict

by | Apr 28, 2021 | Personal Injury |

A New Jersey couple has filed a lawsuit against CURE Auto Insurance Company alleging that it and its attorney refused to settle a car crash lawsuit within the policy limits resulting in an excess verdict for which they were responsible and necessitated a bankruptcy filing.  In its Complaint, the Plaintiffs allege that the insurance company breached its fiduciary obligation to settle a case prior to trial when it knew that the adverse party would accept the policy limits and thereby avoid the risk of an adverse excess verdict which exceeded their policy limits.

The Plaintiffs in this case had a $100,000 bodily injury limit when they struck a motorcyclist from behind resulting in personal injuries.  The case ultimately went to trial rendering a verdict in the amount of $250,000 which was subsequently affirmed by the Appellate Division.  Subsequently, the Plaintiffs learned from the trial Judge that the injured party had offered to settle within the policy limit, but that CURE refused to offer more than $17,500 to resolve the claim.  The lawsuit alleges that New Jersey CURE breached its fiduciary duty by not accepting the offer within the policy limits and moreover, failure to inform them that not only did their insurance company have an adverse interest against them by wanting to pay as little as possible, but by failing to advise them that they had the right to retain their own legal representation to be protected in the event of an excess verdict.

If you are involved in an accident where you are being sued, you have a right to independent legal representation.  This is especially true if it appears that there is a potential for a jury verdict exceeding your policy limits thereby subjecting you to personal financial liability.  Hagner & Zohlman, LLC routinely represents individuals who are being sued as defendants in this type of scenario.  Our role is to ensure that our clients are protected from a potential excess verdict and personal liability.  As argued in this Complaint, an insurance carrier has that obligation to ensure that you are protected and if you are at risk, has the obligation to advise you of the right of independent legal counsel.

If you have a situation such as this where you believe you need independent advice separate and apart from the lawyer assigned to you by an insurance carrier, please do not hesitate to contact Hagner & Zohlman, LLC.