Legal Question in Insurance Law in Michigan

Re: 20-40 policy maximum

If you are unable to settle for the policy limits, there is nothing to keep the jury from awarding you a larger verdict. In other words, the jury is not limited by the policy limits. if the jury awards you a verdict in excess of the policy limits, the insurance company only has to pay on the policy limits. The excess amount of the jury verdict will be a judgment agaisnt the defendant and any property he or she may own.

Re: 20-40 policy maximum

First, as you indicate the accident occurred 2+ years ago, the statute of limitations to sue the other driver for negligence is generally three years from the date of the accident, meaning that unless you start a lawsuit within that first three years, your claim will probably be barred, with some exceptions.

To answer your actual question, your lawsuit would be against the drunk driver. If you sue in Circuit Court, the jury decides the amount of damages, and are not aware of whether the drunk driver has any insurance whatsoever, and are not limited by the amount. The judge would not direct a verdict on this basis, as insurance, so long as both drivers were insured, is not an issue until after a verdict and judgment are entered.

The 20/40 comes into play in negotiations, and after a judgment is entered, and you want to try to collect. You can always try to collect personally against the drunk driver, but they are often personally uncollectable, so you turn to their insurance policy.

That is where the 20,000 per person and 40,000 per occurrence limits come into play. In general, there are ways to add to these limits, such as interest, taxable costs and if they rejected a mediation award and you improve your position at trial, mediation sanctions, all of which are usually collectable in addition to the stated limits. There is a possibility of taking an assignment of rights against the carrier from the drunk driver and claiming bad faith on the part of the insurer for not settling and exposing their insured to an excess verdict, but Michigan law in this regard is very unfavorable unless the insured was collectable, in which event it is easier to collect from him.

In summary, you must distinguish between the amount the jury can award, which is generally unlimited, and the amount the insurer may owe, which is limited by the limits of the policy, plus the items I mention above.

You should explore you own insurance policy to see if you have "underinsured" motorists coverage, which protects you like uninsured motorist coverage, but for amounts in excess of the other driver's 20/40 if your damages are in excess of that. Even if the policy declarations don't list underinsured coverage, some carriers include it in the definition of uninsured, and others have it but keep it their dirty little secret. You should call your own insurance agent and make inquiries about whether you had underinsured motorist coverage which, by the way, generally requires that you exhaust the limits of the drunk driver to be eligible for coverage, which brings you back to the issue of his carrier being unwilling to pay.

I hope this is of some assistance. Please check out my website at www.prine.biz. I would be happy to talk with you at our toll-free number, 888-221-0844, some day next week (other than Monday, when I will be on the road).