I was in a car wreck. My wife was also hurt in the wreck, as was a gentleman (Smith) in another car. The guy that caused the wreck only has $100,000 in liability insurance and he has no other assets. How will the $100,000 be divided?
First, the $100,000 will be paid only if all of the claims equal or exceed a total value of $100,000. Those who are injured in a wreck are not entitled to all of the insurance the at-fault driver has – they are only entitled to the amount demonstrated to be the value of their case. If the amount of the claim or claims is less than the amount of insurance, the insurance company gets to keep the difference. If the amount of the claims exceed the amount of the insurance, the insurance company need only pay the amount of the insurance and the injured persons have to pursue the excess funds from the individual who caused the wreck.
Let’s assume that your claim is worth $50,000, your wife’s claim is worth $50,000, and Smith’s claim is worth $100,000. Under these assumed facts, you would get $25,000, your wife would get $25,000, and Smith would get $50,000. In other words, each of would get a pro rata share of the total.
You can see that this can get a little tricky because people can disagree about the value of each other’s claims. Experienced lawyers will work this out through negotiation, mediation or even arbitration. Rarely is a trial required under these circumstances.
So, under these circumstances, it is still important to be able to prove the value of your claim so that you can get your fair share of the monies available. The larger the claim, the bigger share of the insurance policy you will be entitled to receive.