Thursday, April 9, 2015

What Happens When the Person Responsible for Harming You Has No Insurance?

   Clients often wonder why lawyers seem more interested in whether there is insurance than the facts of their injury and harms.   If someone else is clearly at fault, why does insurance matter?  If there is no way for the lawyer to collect money to compensate for losses, there is little a lawyer can do.

   Here is a cautionary tale.

   A client fell and broke his hip in an unmaintained apartment building.  All buildings secured by a mortgage are required to have insurance.

  Besides being a landlord, the building's owner operated a business.  All successful business people have insurance.

 The building's owner appeared to own a boat and other properties.  Certainly, a successful businessman could pay losses even if there was no insurance.

  It turns out there was no insurance on the apartment building, something which we confirmed by filing suit against the landlord.  It also turned out that the business man's prosperity was only on the surface.  His boat and other properties were not owned in his name.  His tax returns showed that he had spent what income he had unsuccessfully day trading. Other business documents showed that he owed money to many people. Trying to collect money from this landlord involuntarily meant standing in a long line and hoping that, once one got to the front, there would be money that could be found or something that could be sold. In itself, this explained why the apartments had been allowed to become run down.

  The solution in this case was to negotiate a payment plan with the landlord that allowed him to keep doing business to generate the cash to make the payments and that contained quick remedies if he failed to do so.   So far, he has made the first payment and I am keeping my fingers crossed that he keeps his promises to make future payments.

  In motor vehicle accident cases, there is another way to attack this problem.  Most people buy Underinsured Motorist Coverage to protect themselves from those on the road who break the law and choose not to buy insurance.  If you do not have this coverage, you should because it is more important to protect yourself from the other guy than to protect the other guy from you.

   You have to play your hand smartly.  See