Plaintiff’s Case Against Insurance Company Survives At-Fault Driver’s Bankruptcy Filing

Insurance companies are supposed to make life after a Virginia car accident easier, although in reality, that is not always the case. In too many cases, insurance companies look for ways to avoid paying out on an accident victim’s claim, leaving the accident victim without any real means of recovery.

Rear EndedEarlier this month, an appellate court in Alabama issued a written opinion in a car accident case that provides valuable insight to Virginia car accident victims. The case illustrates how difficult it can be to deal with an insurance company following a car accident – even a driver’s own insurance company.

The Facts of the Case

The plaintiff was involved in a car accident with another driver and sustained serious injuries as a result of the accident. Believing that the other driver was at fault for the accident, the plaintiff filed a personal injury lawsuit against the other driver as well as that driver’s insurance company. Since the plaintiff was unsure whether the other driver’s insurance limits would cover all of his expenses, the plaintiff also named his own insurance company in the lawsuit, citing his policy’s underinsured motorist provision.

After the case was filed, but before it reached trial, the other driver filed for bankruptcy. Since a successful bankruptcy petition would have prevented the plaintiff from collecting any award amount he could have received from the now bankrupt driver, the court dismissed the other driver from the lawsuit.

The plaintiff’s own insurance company then argued that it too should be dismissed from the case. The trial court agreed, reasoning that the benefits under the plaintiff’s insurance policy would not trigger because he was no longer legally entitled to recover for his injuries from the at-fault driver. The plaintiff appealed.

The appellate court rejected the insurance company’s argument. The court explained that the plaintiff was not prevented from establishing the merits of her claim against the driver, only from actually collecting any award that would have been issued. That being the case, the insurance company was still liable to honor the plaintiff’s insurance contract because the claim was a legally cognizable one. The court also explained that the bankruptcy code was not written to provide the benefits of declaring bankruptcy to third parties, such as insurance companies.

Have You Been Injured in a Virginia Car Accident?

If you or a loved one has recently been injured in a Virginia car accident, you may be entitled to monetary compensation. The dedicated Virginia personal injury and wrongful death attorneys at the law offices of Charles B. Roberts, P.C. have an extensive knowledge of personal injury law and decades of practical experience successfully representing clients in all types of Virginia personal injury matters. To learn more, and to schedule a free consultation with a dedicated Virginia personal injury attorney, call 703-491-7070 today. Calling is free, and we will not bill you for our services unless we are able to help you obtain compensation.

See More Blog Posts:

Statutes of Limitations in Virginia Personal Injury Cases, Virginia Injury Lawyers Blog, October 5, 2017.

Plaintiff’s Lack of Diligence in Pursuing Claim Results in Dismissal with Prejudice, Virginia Injury Lawyers Blog, September 26, 2017.