Insurance again; not necessarily aviation

[Let'sgoflying!]

So they always say 'insure to protect your assets'. More importantly, you should chose your limits to keep in line with the value of your assets.

The only way I have found this to be useful advice was when I had no assets and no future earnings planned! Ie, I didn't need insurance at all.

So if you have for example, $100,000 of assets to protect, how much liability insurance do you need, $100,000? $200,000? $500,000? $1,000,000?

Seems like the question begets other questions such as, 'how often do plaintiff's attorneys pursue amounts beyond what is available from the insurance payout?'

If the courts can award all the insurance money AND attach your personal assets, is there any point to insurance at all?

 

[Iceman]

So if you have for example, $100,000 of assets to protect, how much liability insurance do you need, $100,000? $200,000? $500,000? $1,000,000?

Seems like the question begets other questions such as, 'how often do plaintiff's attorneys pursue amounts beyond what is available from the insurance payout?'

If the courts can award all the insurance money AND attach your personal assets, is there any point to insurance at all?

I have no experience in past aviation related cases. However, I do know that the insurance companies have their own interest in mind...not yours. This can work in your favor because the higher the liability the more the insurance company will fight to keep the losses at a minimum.

According to most hanger talk...the plaintiff will stop when the insurance runs out...I don't buy it. I think we just say this to make ourselves feel better. A normal 100k/1M policy will cover medical expenses and damages however it will not go very far in our legal environment.

In my opinion the 1M smooth is the best way to go for the normal individual. I figure that most flights are with family or 1-2 (outside immediate family) individuals. This means if something bad happened your insurance company could respond in two ways. The first under a 100k/1M policy plan is...it's only going to cost us 100k lets right the check and go. The plaintiff I feel would still want more. On the other hand if it is a 1M smooth I think the insurance company will fight harder to stop the pontiff at a portion of this amount.

One question: Is it possible for a verdict to imply... take part of the insurance money and make the defendant pay the rest to make him suffer?

 

[gismo]

So they always say 'insure to protect your assets'. More importantly, you should chose your limits to keep in line with the value of your assets.

The only way I have found this to be useful advice was when I had no assets and no future earnings planned! Ie, I didn't need insurance at all.

So if you have for example, $100,000 of assets to protect, how much liability insurance do you need, $100,000? $200,000? $500,000? $1,000,000?

Seems like the question begets other questions such as, 'how often do plaintiff's attorneys pursue amounts beyond what is available from the insurance payout?'

If the courts can award all the insurance money AND attach your personal assets, is there any point to insurance at all?

Choosing liability limits can be tough. Make them too high and you attract litigation, too low and you can't buy a good defense. I don't think there's any actual law on this, but it seems that when your coverage matches your assets and is sufficient to cover "expected" claims, the plaintiffs seem content to leave the defendent's personal assets alone. Carrying policy limits consistent with others in the same situation seems to help with this also as might having limits that are the best you could get (most underwriters are unwilling to go above $1M these days for any low time (TT or in type) pilot).

Personally, I've always come back to having enough to give the insurer adequate incentive to fight as hard as the plaintiff's laywers and to have enough to give those lawyers their "needed" profit.

 

[SCCutler]

Seems like the question begets other questions such as, 'how often do plaintiff's attorneys pursue amounts beyond what is available from the insurance payout?'

If the courts can award all the insurance money AND attach your personal assets, is there any point to insurance at all?

Dave, good questions and good insight in asking.

First off, if a plaintiffs' lawyer knows that the insurance is the only potential source of a recovery, you can darned well bet he'll make an immediate demand for a tender of policy limits as settlement of the case, which, in turn, triggers certain rights for the insured if the carrier refuses to tender the limits in settlement, at least in Texas (Texas law, this is called a "Stowers" demand, and if a carrier refuses to tender the limits, and a subsequent judgment is awarded in excess of policy limits, the carrier may be liable for the amount in excess of the limits). This is general description, please nobody take this as legal advice as, while I am a lawyer, my holiday Inn Express currency is delinquent.

But it is a fools' paradise indeed if one believes that carying less insurance makes them less likely to be sued! Often, the most valuable part of the insurance is not the money they'll pay to cover liability, but the money they pay to have you defended. Try paying counsel by the hour to defend a very complex case; even dirt-cheap lawyers (like me) still add up over time!

If a Pltf's counsel finds that you have no insurance, and becomes genuinely convinced that you are judgment-proof, you can be assured that the Plaintiff will soon be without an interested lawyer. Making that show of judgment-proof-edness is no small hurdle, though, and there is an implicit presumption that, if you are a pilot, you must be rich (ironic, too, since for most of us, the pilot status ensures a paucity of wealth!).

'Zat help?

 

[SCCutler]

...
One question: Is it possible for a verdict to imply... take part of the insurance money and make the defendant pay the rest to make him suffer?

Meant to answer this above, too, and the answer is...

...no.

It is not allowable to apportion a verdict as to source of funds, and is generally reversible error (bad trial result) if evidence regarding the presence or absence of insurance is introduced or allowed at trial. Else, we'd have juries always presuming it is "just an insurance company" and therefore OK to make a questionable award.

The jury is to presume that the Defendant is on the hook for it all (as he or she, indeed, are), and the issue of whether the insurance will pay some or all of the judgment is a contractual matter between the the insured and his insurance carrier.

The "punishment" of a Defendant who is well-insured should, presumably, arise in other ways, including increased rates or non-insurability as a result of underwriting risk post-accident.

 

[Let'sgoflying!]

Making that show of judgment-proof-edness is no small hurdle

I had always assumed this was beyond the capabilities of most mere mortals.
T or F?

 

[SCCutler]

I had always assumed this was beyond the capabilities of most mere mortals.
T or F?

Well, Dave, it's like this.

If you have no insurance and no non-exempt assets (I am talking Texas, here, since many states do not do nearly as much to protect the assets of individuals from execution as Texas law does), the Pltf's counsel will want to know this, and your lawyer will probably make sure he knows it soonest. Preparing a reasonably complex case for trial is a big-dollar affair, and P's counsel is footing the bill for all that him/herself. Experts, court reporters, etc., add up to some real coin, money they will not want to part with if there is no pot-o-gold downstream.

Now, if you are livin' la vida loca, and showing it, you may have a hard time convincing the bad guys to back down.

I had a case once where there had been a terribly bad industrial accident (and by the way, this was not a chicken dirt case, the guy was grievously injured, through no fault of his own, in the workplace). My client was a company which had been involved in construction of the facility, but had no place in the causation. Nonetheless, proving that can cost a lot of money and, if you have insurance, sometimes the carrier will throw in some significant money, something less than the amount it would cost to try the case, to make it go away (this is a purely-business decision).

Anyway, once P's counsel understood, through discovery, that (1) there was no insurance; (2) my client's business was long-since shuttered, no assets; then he took my guy's deposition, and offered no opposition to my no-evidence Motion for Summary Judgment, which terminated the case as to my client, with prejudice.

Of course, all that still required lawyering, so if that's what you mean by being beyond "..mere mortals," well, then i guess you're right. But that might suggest that I am "beyond mere mortals," and if that's the case, why am I still renting airplanes?

 

[Let'sgoflying!]

Thanks all,

That part of my brain still has trouble grasping such things... should I see you at thanksgiving and we tire of talking airplanes I might ask further, Spike!