The law provides that you are entitled to recover damages from the person or persons whose wrongful conduct, whether negligent or intentional, caused you physical and emotional injury.
Therefore, in the case of an automobile accident, you would be able to recover damages from the driver or drivers who caused the accident. You may also be able, under certain and limited conditions, recover statutory damages from the registered owner of the vehicle even though the owner was not driving. Ownership liability is normally limited to $15,000 and only comes into play if the damages exceed the amount of coverage held by the owner. This issue can get complicated and varies from state-by-state.
Let’s put aside the issue of insurance for a moment. Let’s assume you were in a car accident caused by the other driver running a red light while intoxicated. You would be able to recover your economic and general damages from the other driver and in some states, possibly punitive damages depending on the degree of intoxication of the other driver. You could receive your compensation by settling with the other driver for a monetary amount or you could sue, go to trial and obtain a verdict that would then become a judgment you can use to attach bank accounts, garnish wages and seek attachment of personal and real property. Collection laws and procedures vary from state to state and you would likely need to employ the services of the sheriff to seize assets and garnish wages.
If the other driver has no assets, which is usually the case when the driver has no insurance, your judgment is worthless – there is simply nothing to collect and the other driver might file for bankruptcy to protect against future attachment of wages. Keep in mind, that in most states, a judgment for punitive damages may not be discharged in bankruptcy.
Now let’s bring in car insurance into the picture. The other driver is still the one who is responsible for your damages. Under current law, the driver’s insurance company has a contractual obligation to it’s insured to pay the damages for which the defendant driver is found responsible for (excluding punitive damages), up to the insured’s policy limits. Since the other driver has insurance, you may choose to settle directly with the insurance company. As a condition of paying the settlement, the insurance company will require you to legally release their insured from all liability arising out of the accident.
What if you are not willing to settle for the insurance limits because it will not be enough to compensate you for all your damages? In this case, assuming the other driver is gainfully employed and has sizeable financial assets, you may want to refuse insurance offers to settle and go to trial. The potential result can best be illustrated as follows:
The total verdict is $135,000, $35,000 of which is punitive damages. The driver’s insurance policy limits are $100,000. His insurance company would be obligated to pay you $100,000 in partial satisfaction of your judgment and you would be free to pursue the other driver’s assets for the remaining $35,000. Insurance companies do not cover acts which result in punitive damages
A word of advice, a trial is expensive and full of risk. Plus most personal injury attorneys will charge at least forty percent of your recovery if you go to trial versus a straight third if you settle before trial. You need to make your decision to settle or go to trial using a cost-benefit-analysis and a great deal of common sense. Yes, if the defendant has extensive assets that would not be protected under bankruptcy, then you may decide it best to pursue the defendant directly. If not, you may be taking an unnecessary financial risk to pursue the trial option.
Finally, in making your determination on who to sue and for how much, it is advisable to keep your personal feelings for justice or revenge out of this determination. A good personal injury attorney should be able to help you separate hard facts from emotions so that you can obtain the best results possible.