Injury Lawyer Insurance Claims & Settlements 2 — Questions and Answers
Question 1: What is 'first-party' insurance in personal injury claims?
- Insurance that covers the injured third party
- Insurance the policyholder purchases to cover their own losses (Correct answer)
- Insurance purchased by the defendant
- Insurance provided by the government
Correct answer: Insurance the policyholder purchases to cover their own losses
First-party insurance covers the policyholder's own losses, such as PIP (personal injury protection) or MedPay, regardless of who was at fault.
Question 2: What does 'PIP' (Personal Injury Protection) insurance cover?
- Only the driver's medical bills in at-fault accidents
- Medical expenses, lost wages, and related costs for the policyholder regardless of fault (Correct answer)
- Only property damage
- Only passengers, not the driver
Correct answer: Medical expenses, lost wages, and related costs for the policyholder regardless of fault
PIP is a no-fault insurance coverage that pays the policyholder's medical expenses and lost wages after an accident regardless of who caused it.
Question 3: In settlement negotiations, what is a 'high-low agreement'?
- An agreement to split attorney fees
- A binding agreement setting a minimum and maximum range for the jury's verdict, regardless of actual outcome (Correct answer)
- An agreement to waive punitive damages
- An agreement to use a sliding-scale fee structure
Correct answer: A binding agreement setting a minimum and maximum range for the jury's verdict, regardless of actual outcome
A high-low agreement sets a guaranteed minimum payment to the plaintiff and a capped maximum the defendant must pay, regardless of the jury's actual verdict.
Question 4: What is a 'consent to settle' clause in a liability insurance policy?
- The insured must consent before the insurer settles the claim against them (Correct answer)
- The plaintiff must consent to the insurer's defense attorney
- The court must approve all settlements
- The insurer may settle without notifying the insured
Correct answer: The insured must consent before the insurer settles the claim against them
A consent to settle clause requires the insurer to obtain the insured's permission before settling a claim, protecting the insured's reputation and preventing collusive settlements.
Question 5: What is 'Med-Pay' coverage in an auto insurance policy?
- Coverage for vehicle maintenance costs
- No-fault medical payments coverage for occupants injured in the policyholder's vehicle (Correct answer)
- Coverage for medical malpractice by treating physicians
- Coverage for pre-existing medical conditions
Correct answer: No-fault medical payments coverage for occupants injured in the policyholder's vehicle
Med-Pay (Medical Payments) coverage pays medical expenses for the policyholder and passengers injured in their vehicle regardless of fault, up to the policy limit.
Question 6: When is the defendant's insurer required to defend the insured even if coverage may be disputed?
- Never — the insurer may decline if coverage is uncertain
- When any allegation in the complaint could potentially be covered by the policy (Correct answer)
- Only after a court order
- Only if the insured pays additional premiums
Correct answer: When any allegation in the complaint could potentially be covered by the policy
The duty to defend is broader than the duty to indemnify; an insurer must defend whenever any claim in the complaint could potentially fall within coverage, even if coverage is disputed.
Injury Lawyer Insurance Claims & Settlements 2
What is 'first-party' insurance in personal injury claims?