Questions About Um Claim

[Fernand]

s about UM claim Advertisement Expert: Doctor Settlement - 8/21/2009 I'm a few months away from attempting to settle an automobile claim where the at fault(100%) driver was uninsured. My claim has access to my $250k UM policy and my $10k MedPay policy. Most of the medical bills have been paid by private health insurance, with the remainder about to use up the MedPay portion of my policy. The vehicle(totalled) was paid by the collision portion of my policy. My questions mainly have to do with the collateral source rule and subrogation. The accident occurred in Wisconsin, which is a strong CSR state. I understand the CSR concept when it comes to private insurance, but not other sources of insurance.

1. When demanding medical bills from the UM policy adjuster, is the $10k Medpay portion included or excluded in the total?

2. Can the MedPay and Collision portions of my policy subrogate the UM settlement from the same policy?

3. Are there any differences in how subrogation and CSR work when dealing with a UM settlement as opposed to the tortfeasor's liability insurance policy?

4. Can punitive damages be claimed against a UM policy?

Thank you for your time.

ANSWER: Hi Robert, Oops, Doctor Settlement took off for the weekend without the leash of the electronic e-mail, and so your answer has been delayed.  Sorry about that.  I will put in an hour and a half for you since it looks like you might have a big claim, and you are trying to find answers on your own.

I am going to help you as best I can, so bear with me as I try to frame some answers for you(below).  But as for specific legal opinions on specific state law, we cannot do that on this site.

I do not think that anyone at allexperts.com is authorized to give you the kind of specific case law and statutory legal advice that could(or probably should) be included.  Someone at another site got sued last year for malpractice.  They do not want the exposure to malpractice, and neither do I.  We are to entertain questions regarding claims, and circumstances, and what to do, etc.  We do not have that kind of state-by-state knowledge of statutes and case law, and thorough legal research is not feasible.  .  

But I did take a look at Wisconsin law in some of these areas for you.  I just do not want to be held to it—fair enough?  So much for what we lawyers do best: make disclaimers!  If my detail is not sufficient for your purposes, may I suggest that you try to hire an attorney by the hour, if you can find one who will help you.  The most experienced personal injury attorneys are NOT going to risk their malpractice for a few hundred bucks, especially for someone who is not a client.  But it does not hurt to ask around because someone with sufficient experience should be available. You know that Doctor Settlement teaches do it yourself auto injury claim settlement at www.SettlementCentral.Com   But in your case, I would not want you to use our members' side materials if your case has a huge settlement value, along with these collateral, but possibly controlling, issues you have raised.  There is just too much at stake for a lay person to undertake if the claim is big.

If your claim is very large, then how about this idea: you work it to get a settlement offer and then you take it to an attorney and negotiate a big discount in attorney fees for her to take it the rest of the way?  What if you get only two-thirds the way to your settlement goal?  Well, you can get as big a settlement as you can on your own, and then turn it over to an attorney and save a lot of fees.  Thus, you could go it alone just to get an insurance settlement offer, and then take that insurance settlement offer to a personal injury attorney, thus exempting the amount of the offer from her fees.  Do It Yourself Personal Injury Settlement Offer Reduces Personal Injury Attorney Fees http://www.settlementcentral.com/page0109.htm

OK, Robert, enough of the disclaimers—let's get to your questions.  Remember, I have NOT gone and done in-depth research on your state statutes and case law on these topics.  So this is just my "common sense" opinion speaking.  But I seem to land on my legal feet enough to give me the confidence that I am usually within the ballpark for a correct answer.  

Do not be offended, but since the answer format is not in HTML, I will have to use ALL CAPS on the first line of my answers to distinguish them from your questions, OK?

Xxxxxxxxxxxxxxxxxxxxx

1. "When demanding medical bills from the UM policy adjuster, is the $10k Medpay portion included or excluded in the total?"

ANSWER: YES, INCLUDE IT. YOU WANT YOUR UIM DEMAND LETTER TO SHOW AS HIGH A VALUE AS POSSIBLE.  HENCE, YOU WILL SHOW THE GROSS VALUE OF ALL THE BILLINGS, not just the net paid by your health insurer or your own MedPay.  In this case, you do have a lot of bills paid by the health insurer, so take a look at them and include the GROSS BILLING in your demand letter, before any deduction shows as it was actually paid.

This, then, is the collateral source rule at work.  You are valuing your UIM claim on the same basis as you would value your third party claim.  And you will therefore make your demand based upon the actual billing, the gross amount, without reducing it to show what was actually paid.

xxxxxxxxxxxxxxxxxxxxxx

2. "Can the MedPay and Collision portions of my policy subrogate the UM settlement from the same policy?"

ANSWER: YES FOR MEDPAY; NO FOR COLLISION.  HERE IS HOW IT WORKS IN UIM BI(bodily injury): THE TOTAL VALUE OF THE THIRD PARTY CLAIM IS ESTABLISHED.  THIS, then, becomes the value of the UIM claim.  This is relevant to the issue of subrogation when we come to compare that full value versus the UIM policy limits. First, let's take a brief Introduction to Subrogation— http://www.settlementcentral.com/page0459.htm Forced Payback to YOUR OWN Insurer From Your Personal Injury Award.  

Your subrogees(your insurers who have paid your bills and now want their money back) have subrogation rights versus the UIM award according to the insurance policy, BUT also controlled by state statutes and case law.  I do not think that your state is different from others in regard to what I am writing today, except that Wisconsin is progressive in this respect.  YOU WILL HAVE MORE DEFENSES TO SUBROGATION in both the 3rd party and the UIM claim since you live in a "blue state"(where the legislators listen more to the trial attorneys than to the insurance industry).  

Anyway, any subrogee—be it your health insurer or your own MedPay—is restricted in UIM by the same defenses mentioned in the link above(i.e. here are a couple of popular defenses to subrogation:(1) you were not "made whole" by tortfeasor's limits or not "made whole" by your UIM limits—plus another example;(2) where the tortfeasor adjuster—or in this case the UIM adjuster—fought to prove that those medical expenses were NOT REASONABLE and NECESSARY; hence, since the adjuster disallowed one-third of the expenses, therefore we will disallow one-third of the subrogation demand).

IN ADDITION, the UIM BI subrogee faces another defense by the claimant, as I will discuss below: statutory muscle in support of UIM claims.  This statutory scheme trumps any policy language to the contrary.

As for the collision question, let's clear the air as to whether you used your collision or your UIM PD.  You may have purchased UIM property damage(PD) coverage.  Check that out.  You will have to pay your deductible with the use of collision, but not so when you use the UIM PD coverage.  Insofar as subrogation goes, NEITHER collision nor UIM PD will have any subrogation rights versus your UIM coverage.  Naturally they have a right of action versus the tortfeasor. Xxxxxxxxxxxxxxxxxxxxx

3. "Are there any differences in how subrogation and the collateral source rule work when dealing with a UM settlement as opposed to the tortfeasor's liability insurance policy?"

ANSWER: WELL, THEY ARE TWO DIFFERENT CONCEPTS, EACH DEALING WITH A SEPARATE PART OF THE CLAIM, so we will take them separately.  

Brief answer: as to the CSR, there are no differences between the third party action and the UIM.

The collateral source rule allows you to include the FULL BILLING amount of your medical costs in the demand, irrespective of whether the care provide actually accepted payment of a lesser sum.  And YES, it works the same way in UIM as it does in third party claims.  In Wisconsin, you get to take advantage of the collateral source rule, and the jury is prohibited from learning that the medical care provider actually accepted a lesser sum than you have introduced into evidence at trial.  Hence, your demand letter in both the third party claim AND the UIM claim will be based upon the gross billing, with no deductions shown.

Brief answer: as to subrogation, there are no differences between the third party action and the UIM, ALTHOUGH, in some UIM situations, there are two possible small advantages to help fight subrogation. First off, both types of claims(3rd party & UIM) share the basic defenses to SUBROGATION, a couple of which I included above.  This is the case for 95% of the UIM claims, so it is accurate to say that there is no difference(between 3rd party & UIM) when it comes to subrogation defenses. However,(and this is hardly worth mentioning, but just to be thorough, I will do so) there could be two little advantages in the UIM context for subrogation defenses.  Just skim this that follows.  Do not get bogged down in it, since it is not relevant in most of the claims.

The first little possible advantage in a UIM claim is that you might have an agent who sold you the insurance.  When the subrogee is your own MedPay, your agent is an ally who can lobby for you.  Technically that is not supposed to make any difference, but I have used it to the advantage of my clients.  It is a good trick if one has purchased thru an agent.  

By the way, it also should make no difference that it is your own company that is coming after your UIM award for subrogation, BUT, in tight cases that could go either way, there can be a slight nod to favor a company's own insured.

The second little possible advantage in UIM is that in progressive Wisconsin you have a strong statutory statement favoring UIM.  This is just an additional piece of horsepower on the side of the claimant that is not available in the third party claim.  This is the statutory framework that includes strong statements of purpose that trump policy language to the contrary.  How does this advantage show itself in claims practice?  Look at the case law decisions.  You can see a lot of case annotations beneath the Wisconsin UIM statutes at:http://www.legis.state.wi.us/statutes/Stat0632.pdf   There are some good strong UIM provisions are in sections 632.32(4) and(5)

xxxxxxxxxxxxxxxxxxxxxxxxxxx

4. "Can punitive damages be claimed against a UM policy?"

ANSWER: YES, BUT THEY WILL NOT ALLOW YOU TO EXCEED YOUR UIM LIMITS.  THE UIM CLAIM STANDS IN THE SHOES OF—and HAS ALL THE RIGHTS OF—the claimant versus the THIRD PARTY.  Hence, if you do have a punitive damages claim versus the third party, then that claim will increase the value of that 3rd party claim.  Since the UIM coverage is designed to replace the third party missing coverage, it follows that everything you were going to prove versus the 3rd party is available to be included in the UIM claim. The ONLY kicker is that the punitive damages claim CANNOT be used to increase your UIM policy limits.  For example, let's say that you have a 3rd party claim with compensatory damages worth $80K and the tortfeasor has limits of $25K, and you have $100K UIM limits.  On top of the $80K compensatory damage claim, you have a punitive damages claim worth $100K.  

What is your award to be paid from your UIM limits of $100K?  You get to first add everything together, and then we start deducting in order to see what will end up in your pocket.  Hence, your total claim versus the tortfeasor is the $80K plus the $100K, or $180K.  However, your UIM limits are only $100K, and from that we are going to deduct the tortfeasor's $25K limits, leaving you only $75K available as your total award from your UIM.  In other words, you did get to include the punitive damages claim, BUT it did not allow you to collect one dime over your policy limits. I trust that my extra time here has produced some information that has been of value to you, and thus I would respectfully request that you take the time to locate the FEEDBACK FORM on this site and leave some feedback for me.

Best Wishes, Dr. Settlement, J.D.(Juris Doctor) http://www.SettlementCentral.Com

---------- FOLLOW-UP ----------

Thank you SO much for such a detailed answer! And I do appreciate your need for all the disclaimers, very understandable.

I plan on doing exactly what you suggest - getting a lawyer if the settlement offer is not favorable. I've been handling the logistics of medical bill payments on my own(which has been going well), and slowly preparing a demand letter with supporting evidence(medical bills, lost wages, pictures, detailed discussion of my pain and suffering, calculations of future losses, etc). I'm of the belief, which may very well be naive, that if I'm able to effectively communicate my demands and provide adequate evidence up front, that I should have a decent shot at getting what I demand on my own. Of course, I've also prepared myself for the possibility that this will all blow up in my face.

I have already discussed with my orthopaedic surgeon the need for narrative and permanency reports when the extent of my recovery is known, and plan to have these in time to be included with the demand letter.

Luckily I know someone with access to a Westlaw account, and was able to get a lot of information about the tortfeasor, all of which indicate he is worth much less than the policy limits of my UM policy.  This is another reason why I am attempting to "go it alone": going after the tortfeasor would probably be a futile effort, and while I think my claim will be reasonably worth more than my policy limits, I'd be satisfied with the policy limit if it doesn't include a 33% legal fee.

I did have one more general question that I'm hoping you can help me with. I'm lucky to live in a state that puts all of its civil lawsuits online with full docket reports, and actually lets you narrow your search to just automobile accident related actions. While doing a search this weekend, I found that not a single personal injury automobile related case has been decided by a jury in my county in at least the past 5 years!  They all settle well before trial, with a handful settling during trial. The few actual judgments posted are all default judgements, which don't actually mean anything to my situation. Can you comment on what this phenomenon, in general, might mean to a claim brought in my county, and is it worth pointing this fact out in my demand letter as a means of showing that I'm an educated and prepared claimant?

Thank you again for your time and efforts. It is truly a great service that you are providing!

ANSWER: Hello again, Robert,

Thanks for the nice comments.  

"Can you comment on what this phenomenon, in general, might mean to a claim brought in my county, and is it worth pointing this fact out in my demand letter as a means of showing that I'm an educated and prepared claimant?"

ANSWER: NO, I WOULD NOT MENTION IT AT ALL.  YOUR SHOWING AS AN EDUCATED AND PREPARED CLAIMANT ALREADY COMES THRU, AND WILL ALSO show in your demand letter.  Though I DO worry about your not having a sufficient resource of claims information if you are truly going to try to resolve this big case on your own.  

A quick answer to your question would be available were you to ask a couple of trial attorneys why there are few cases being tried.  That will give you the answer.

Enough said—read on only if you have a curiosity on this topic.  The question having been answered, quit here, unless you want to read the ravings of a mad man trial attorney! I could be wrong in the opinions I am about to express, since we generally think of your state as enlightened and evolved, not some redneck bastion of mostly high school grads.

As for the lack of trials in your county, it sounds like what happens when the juries are decidedly in favor of the insurance industry.  And that usually happens among the lower educated, NOT in your state.  If juries do tend to favor the insurers, plaintiffs then avoid trials.  

If the contrary were true, and juries were awarding higher and higher verdicts, do you think we trial attorneys would just walk away and tell our clients to take the settlement offer?  NO, we only take a settlement offer when it looks like we will get less by going to trial.  Otherwise, we trial attorneys would continue to push for trials, NOT settlements.

Of course I would not know for sure what your county's phenomenon means, but I suspect it could mean that your county is tough on plaintiff injury claims.  Yes, one county can be different from another.  This is common where there are socio-economic differences between regions, between states, and even between counties within a state.

Maybe it could mean that the plaintiffs are getting way too much money at trial and the insurance industry is folding to their demands and just settling the cases.  Or, as is more likely the case, it could mean that your county has turned in poor results for the plaintiffs, and their attorneys choose to settle.  This is in fact what happened in my county, especially whenever the economy suffered in past years. Consider this: in my state the medical malpractice insurers were crying bloody murder about the abuses of the malpractice claims with jury verdicts waaay out of control.  The legislature did an investigation and reported that only 12% of the medical malpractice claims ever went to trial and of those that did, only four(of more than two dozen) malpractice claims state-wide resulted in verdicts for the plaintiff in the year of the study.  All of the others were defense verdicts.  So, what does that tell you?  

To me it says that the plaintiffs were settling 88% of their malpractice cases because they knew that the juries had been propagandized by the insurance industry and the Bush administration's campaign to hate trial lawyers and their scum clients who were blood sucking from the medical community and ruining its economy.  Hence, these attorneys avoided the juries and settled their claims.  

Can one county be different from another in terms of jury verdicts?  Yep.  It seems to go along the lines of educated populace versus blue collar, and good economy versus tough times.  One county may have an industry with a lot of layoffs, or a lot of folks who are not too sharp and will believe the propaganda from the insurance industry.  In that county, the trial results will always be less than in a county with educated folks who recognize the BS in "like a good neighbor" or "you are in good hands".  

Just like the differences between states and areas of the country where the emphasis on education differs(consider the statistics and scores and percentage of college educated in your state, a blue state, versus the southern red states, for example), so too, the ability to approach any concept with an open mind and listen to evidence differs geographically within a state.  Just human nature, I guess.  

Plus, the lower socio-economic folks think that fifty thousand dollars is a truly princely sum since they never could imagine such a huge amount landing on their doorstep in one chunk.  "MY GOSH, what is he gonna do with ALL that money?  That is twice what I ever made in one year of hard work."  I am NOT making this stuff up.  We had a continuing legal education seminar on these differences in jury perspectives one year, and it was both enlightening AND kind of scary to see how propaganda can influence folks who do not read or have quit learning after high school.

Bottom line of my rant: be thankful for the value the citizens of your state put on education.  It is a true asset, and impacts the quality of your lives.  And jury verdicts.  

Good luck on all of this, Robert, I trust that my time here(actually last question session) has produced some information that has been of value to you, and thus I would respectfully request that you take the time to locate the FEEDBACK FORM on this site and leave some feedback for me.

Best Wishes, Dr. Settlement, J.D.(Juris Doctor) http://www.SettlementCentral.Com

---------- FOLLOW-UP ----------

Hello Dr. Settlement, I just wanted to update you on the results of my claim since you helped me out so much.

I want to begin by clarifying that I was actually helping my 60 year old mother with her claim. Reading my original question I seem to have made it sound like I was referring to a claim involving myself. I also want to say that I have an engineering degree from a Big-Ten university, but didn't have any legal experience prior to my mother's accident.

Anyways, as it turned out her injuries resulted in degenerative arthritis of her right ankle. Since she was an unskilled worker who had worked on her feet all of her life, she would no longer be able to return to work and would lost her seniority and the wage that went with it. The only further treatment possible would be an ankle fusion, which we determined would not be in her best interest since it is a treatment of last resort, and she was still able to get around with minimal pain, just not stand for more than an hour at a time. I was able to get her orthopaedic surgeon to make a report to support this conclusion, and we got a second opinion from another Ortho who drew the same conclusion. I helped her apply for SSDI and she was approved on a permanent basis(due to her age).

At this point I contacted the claims adjustor and told him we were ready to begin settlement negotiations because she was at the end of her treatment. He said that he needed to gather all of the doctor reports and her medical records to begin evaluating the claim. I was a bit weary of letting him make the first offer without sending him a demand letter, but agreed to it because I felt I could always stay a step ahead of him. I sent him the report I had, and he seemed a bit shocked that I already had this information. I also let him know she was approved for permanent SSDI.

During the next few months I gathered all of the data and made all of the calculations needed to support my mother's claim for lost wages, dimished earning capacity, and other implications of her having to retire at age 60 instead of 66. I concluded that with general damages her claim was worth close to the full amount of her $250k UM policy. Just as I was finishing my calculations, the adjuster called again and asked for her current wage. However, I instead provided him with all of the data that I had gathered and a detailed letter explaining all of the different items we were demanding, without revealing any specfic dollar amounts. Once again I could sense that he was not expecting us to be so well prepared.

Another month passed in which he kept making excuses for delaying his evaluation, from scheduled vacation time to blaming the doctor for sending information to the wrong address. I'll admit I was feeling nervous but was determined not to let him feel that we were losing patience.  This may have been risky but it paid off.

Last week he finally stopped over to discuss his evaluation of the claim. I didn't really know what to expect, but was fully prepared with my own calculations and supporting evidence for her special damages. I was prepared for the worst case scenario, in which he would give us a lowball offer and I'd have to get a lawyer.

To my surprise, his breakdown of my mother's losses nearly matched the numbers I had. The term "collateral source rule" was never spoken at any point in my communications with him, but he actually applied it to her medical bills and lost wages(he knew she had 6 months of 60% sick pay). His FIRST offer was $226k. Needless to say, I was floored, but managed to keep my composure as I knew she deserved more and was determined to get it. After about 10 minutes of haggling we agreed to $241k(her UM policy was $250k). After subrogation(medical + medpay), she got to keep $220k. Within 45 minutes after he arrived, my mother had her check and the adjustor was on his way. I realize a lawyer probably could have gotten the policy limit, but his fee would have left her with a much smaller net settlement.

I wanted to share this information because without the help of you and the other volunteers on this forum I probably wouldn't have even thought of attempting this. I'm not implying that you or any of the other experts actually recommended I or anyone else try to settle a large claim, but I just want to let everyone know that it is indeed possible to settle a large claim without a lawyer if you are patient, able to educate you self on the subject, and don't anticipate any major complications(like contested liability). That might be the same as saying "You too can win the lottery!", but we are living proof that there are situations where it is possible.

[Meng]

Thanks for the accolades, Robert, but it is YOUR hard work that made this result possible.  A "huge $241,000 personal injury Uninsured Motorist insurance settlement using Dr. Settlement online tips" is a good headline, all right.  But in truth, no one can do what you did without a lot of hard work and patience, so I know that your Mother is both thankful and proud of you.  Congratulations, Robert: you got a better result than ever could have been achieved with an attorney.

Best wishes to you both!

Dr. Settlement, J.D.(Juris Doctor) http://www.SettlementCentral.Com