Insurance in Trucking Cases
Insurance is always important in cases involving serious injuries. In trucking cases, dealing with the available insurance coverage can get complicated quickly. Understanding and finding the liability insurance coverage held by the trucking company is a key aspect of seeking fair and just compensation for people seriously injured in collisions involving trucking companies. However, finding the available insurance is only part of the battle.
Trucking Insurance Basics
In a serious injury trucking case, insurance is crucial because it is usually the major source of payment for the damages caused by the trucking company. Depending on the size of the trucking company, there can be different types of insurance and different layers. Insurance also typically covers the cost of defending trucking companies (such as lawyers and litigation expenses) and has control over settlement.
Larger trucking company insurance policies will likely have a self-insured retention or SIR. An SIR is an amount that the trucking company is responsible for before an insurance company is required to contribute. For example, if a trucking company has an insurance policy with a $1 million SIR and the trucking company settles a claim for $500,000, the trucking company will pay the entire amount out of pocket, since it is below the SIR threshold. If damages in a case is $1.5 million, the trucking company would pay the first $1 million out of pocket and the insurance company would cover the remaining $500,000.
We often see trucking companies covered by multiple insurance companies with multiple policies. For example, a trucking company may have a $250,000 SIR, a layer of insurance from $250,001 to $3,000,000, and another layer of insurance from $3,000,001 to $5,000,000. In this example, the coverage layer from $250,001 to $3,000,000 is considered a “primary policy.” All layers above that would be an “excess” policy. Though that is typically the case, whether an insurance policy is “primary” or “excess” depends on the language in the insurance policy. When finding out all the layers, we usually refer to all the available insurance as the insurance stack or tower.
Why is knowing the insurance tower and having the actual policies important to a truck crash case?
We need to know what is available to cover the serious injuries caused by the trucking company. Will there be enough insurance to cover a verdict in the case? Will the trucking company and its insurers get away with paying less than what is available in a catastrophic case? To get the best settlement possible for our clients, we need to know all available insurance.
It's not enough to just know the available insurance limits. We also need to have the actual policy documents to know what conduct and claims may be excluded from coverage and whether the policy is considered primary or excess. For example, there are some policies that are treated as excess policies above a SIR. Those policies often give substantial control over the trucking company in settlement and litigation. Sometimes those policies require the trucking company to pay all the legal fees and expenses and allow the trucking company to choose the lawyers who will defend the trucking company. Other insurance policies let the insurance company choose what lawyers will defend the trucking company.
They make such funny commercials that make it seem like they really care, shouldn't they take care of a claim? Major insurance companies spend billions of dollars a year on advertising.
They use tactics to put you at a disadvantage and make you feel like your claim is worth less than it really is.
Sometimes the only way to keep insurance companies honest is to take them and the wrongdoers they protect to court.
Knowing when each layer of coverage is triggered is very important. The lifeblood of insurance companies, aside from taking large premiums Insurance from its customers and paying out as little as possible, is evaluating risk. If the highest insurance layer of the tower does not believe that a verdict could reach that layer of coverage, then that insurance company will not feel like they need to make any offers. On the other hand, if the top layer believes that a verdict is likely to reach that layer, that insurance company can exert pressure on the lower layers to settle within those limits. For cases in Texas, there are also serious Stowers implications when multiple insurance layers are involved. Stowers is an insurance doctrine in Texas that is very important for truck injury cases. Understanding how layers are triggered is crucial in getting a favorable settlement.
Building the tower – how do we find the layers and get the policies?
Once a lawsuit is filed, trucking companies have to produce documents reflecting all available insurance. However, in most cases, the defense lawyers either don’t produce all of the insurance documents or claim that there is only one layer of coverage.
Discovery regarding available insurance is crucial, but it is not enough to take a defense lawyer’s word for it. There have been plenty of times when defense lawyers claim that since they don’t believe a layer will be reached, they do not think they need to produce all insurance information. Most courts have ruled that it doesn’t matter what coverage is likely to be triggered – insurance information for all available layers must be produced. And most defense lawyers know that but want to cause more time and expense in fighting to get the insurance information.
Overall, understanding the insurance tower, how insurance policies work, and how to get the information is crucial to a truck crash case. Knowing how to trigger that coverage is equally important and can lead to a fair settlement for someone whose life was seriously changed because of a careless trucking company. At Tepperman Law, we’ve successfully fought many fights over finding the insurance information and triggering coverage to get substantial settlements for our clients.