What Happens If There Are Multiple Victims and Limited Insurance Coverage?

I was in a a bad car accident involving a car and a truck.  Two people were hurt, and one person was killed.  The total liability insurance available is a single limit policy of  $300,000  and the at-fault driver does not have any assets.  The insurance company has offered the group of us $300,000. How will the money be divided?

Hopefully, the money will be divided by agreement without the need for litigation.  Those negotiating the case should be driven by what would happen if no agreement was reached.  In other words, people should negotiate with the idea of how a court would divide the money if there was a trial.

A court would divide the $300,000 on a pro rata basis depending on the value of the claim.   So, if all three claims had a total value of $3,000,000, each claimant would receive 10 cents on the dollar of his or her claim.  For example, if one claim was worth $500,000, that claimant would only receive $50,000  of the total monies available.

So, you can see why I said that the parties must negotiate with this in mind.  At the end of the day, no one will receive a just amount under these circumstances.  But the amount of injustice suffered by each party will be equal, that is, each party will get the same percentage reduction.

So, the controversy in settling these cases is determining the value of each case (which is frequently true) compounded by the knowledge that every party will receive an unjust amount.

I hasten to add that the situation gets more complicated if the insurance policy is a split limit policy such as a $50,000 / $100,000 policy.

My work as a car accident attorney and truck accident lawyer has lead to my involvement in many cases where multiple claimants were seeking recoveries from limited funds.  We offer free consultation in all personal injury and wrongful death cases.


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