Southern California Injury Law Blog

California, like other states throughout the country, requires that drivers purchase liability automobile insurance coverage. Liability coverage protects motorists with whom a driver may be involved in an accident. For instance, when someone with liability coverage causes a crash and damages property or injures people, his or her liability policy will pay for the damage to those who were hit, up to the limit of his or her policy, explains a California personal injury attorney. Liability coverage does not provide protection to the insured for either injury or property damage; additional coverage would need to be purchased by the insured if such protections were desired.

Liability coverage is required because California is a fault state. This means that a party who is at fault for causing an accident is expected to bear the financial burden that results from that accident. Under California tort laws, a car accident victim may sue or otherwise make a claim against the person who caused the accident in order to collect compensation for property loss, medical bills, and lost wages arising from an injury, as well as for pain and suffering and emotional distress related to the injury.

To ensure that the party who caused the accident can pay these damages, California law generally requires that all drivers purchase a policy minimum of $15/$30/$5. This essentially means that they must purchase $15,000 in bodily injury liability coverage that will pay a single person they injure up to $15,000. The $30,000 refers to the total amount of bodily injury coverage purchased (i.e. if more than one person was injured in a single accident, the insurer would pay up to $30,000 total spread among those who were injured). The $5,000 refers to property damage coverage.

Many people choose to buy more than these required coverages since the protection they provide is somewhat limited.

Others, however, buy no insurance at all due to the cost. In order to try to encourage more people to actually purchase insurance, California has instituted a program designed to allow good drivers with a low income to buy insurance at affordable rates. This program is called California's Low Cost Automobile Insurance Program (CLCA), and it was established in 1999 to try to combat the problem of uninsured drivers. The program provides auto insurance for premiums promised to be less than $400 per year.

However, there is an important difference between the insurance provided by CLCA and standard policies. The insurance provided by CLCA offers only $10/$20/$3 instead of the standard minimum required limits. This means a person has liability coverage only for $10,000 for injuries, $20,000 for the accident as a whole, and $3,000 for property damage.

If an individual is involved in an accident with an insured with low policy limits, that individual may have difficulty obtaining the full compensation he or she is afforded under California law. The difficulty is exacerbated by the fact that CLCA caters to low-income drivers: even if the injured plaintiff received a judgment in excess of the defendant’s insurance policy limit, the defendant likely would not have the resources or funds to pay the judgment.

While the program may have removed a significant number of uninsured drivers from the road, it has unfortunately replaced them with underinsured ones. Although receiving a fraction of a judgment is most likely preferable to nothing at all for many plaintiffs, the program has not eliminated the need for many drivers to purchase uninsured and underinsured motorist coverage to ensure they are fully compensated after an accident.

Additional information on California’s Low Cost Automobile Insurance Program, uninsured and underinsured motorist policies, and the personal injury claims process, is available to the public free of charge through our office’s Preferred Friends and Clients Program.

If you would like to request one of these free resources, or to discuss a specific legal matter with a California personal injury attorney, feel free to call 866-981-5596.

In the state of California, insurance companies and other advocates for tort reform have a long history of lobbying for restrictions on victim's rights. A recently proposed Senate bill, however, would change a Supreme Court decision to provide broader recovery for plaintiffs, explains a personal injury attorney in the state.

California's Tort Damages Rule

In the state of California, tort reform efforts have successfully limited the amount that plaintiffs can recover in certain civil actions. For instance, under California law, there is a $250,000 limit on non-economic damages in medical malpractice cases. Recently, the Supreme Court in Howell v. Hamilton Meats imposed even further limitations on the damages that an injured plaintiff can recover. This time the restrictions affect more than just medical malpractice claims.

In Howell, the plaintiff suffered injuries with medical bills totaling $200,000. However, the insurance company who paid the bills ended up negotiating rates and terms and only paid $60,000 in total for the $200,000 in medical bills.

The trial court in Howell determined that only the $60,000 that was actually paid out should be awarded to the plaintiff for personal injury damages. The appellate court reviewing the case disagreed and determined that the full $200,000 in actual medical costs incurred should be paid, and the case was sent to the Supreme Court for a final decision to be made.

The Supreme Court's decision was a major boon to insurance companies, as the court held that damages for medical costs would be limited to actual monies paid out. This meant that in Howell and in subsequent future cases, the plaintiff would be limited to recovering only for whatever the insurance company paid out. Since insurance companies are notorious for paying only pennies-on-the-dollar of what the actual costs of medical care would otherwise be for someone uninsured, this ruling seriously curtailed potential damages for plaintiffs.

In response to the ruling, Darrell Steinberg, a California senator, introduced Senate Bill 1528. Under the rule set forth in Senate Bill 1528, all injured parties would be entitled to recover the reasonable value of medical services provided, regardless of how much was actually paid out. The summary of the bill indicates that this requirement should be in place for public policy reasons, as it ensures that all victims are compensated equally, rather than those with insurance being more limited in what they can recover due to the reduced payments made possible by virtue of the fact that an insurance company is paying the bills.

Opponents of the Bill, including insurance companies, suggest that the rule proposed would significantly increase the cost of insurance premiums. If the Howell rule is overturned, these insurers indicate that they would need to pay out an additional $3 billion per year in higher insurance rates.

The reality, however, is that the Howell rule is the rule that changed the law in the first place. For more than a century, a collateral source rule has applied to ensure that all plaintiffs are compensated for the reasonable value of their medical treatment, regardless of whether they paid for private insurance or not. The collateral source rule is in place so that those with the foresight to purchase private insurance are not, in effect, penalized for making that decision and paying premiums.

The collateral source rule was the standard for so long because incentives to purchase private insurance were maintained with the rule in place. In fact, in her dissent in the Howell fact, Justice Klein quoted from a 1970 California Court decision explaining the importance of the collateral source rule: “The collateral source rule expresses a policy judgment in favor of encouraging citizens to purchase and maintain insurance for personal injuries and for other eventualities…If we were to permit a tortfeasor to mitigate damages with payments from plaintiff‘s insurance, plaintiff would be in a position inferior to that of having bought no insurance, because his payment of premiums would have earned no benefit.”

When the Howell court determined that a plaintiff would receive only what was paid by the insurance company, essentially this was penalizing the individual for purchasing private insurance. Without having purchased that insurance, which allowed for the reduction in medical costs, the plaintiff would have received more recovery in the personal injury action. Because the plaintiff's recovery was now being reduced due to the private insurance (albeit indirectly in this case), the plaintiff was not receiving any benefit from the years of paying for premiums. Instead, the insurance companies who were paying out less in damages in the personal injury action were effectively receiving the benefit of the injured plaintiff's premium payments.

With its new rule, therefore, Howell was effectively rewriting longstanding California law and changing policy. The proposed Senate Bill 1528 will simply change this pro-business decision and once again give California plaintiffs the right to recover for the reasonable value of medical bills, ensuring that these plaintiffs are the ones who benefit from their purchase of insurance.

Additional information, including books and articles on other issues concerning personal injury law, is available to the public free of charge through our office.

If you would like to request one of these free resources, or to speak with a California personal injury attorney, feel free to call 866-981-5596.

Doctors and insurance companies often have arrangements in which the services are provided at reduced fees in exchange for immediate payment. This is also the case with Medicare. After treating accident victims, many hospitals and doctors would prefer to bill for the full cost of care over the reduced reimbursement offered by Medicare. A doctor or care provider may request to collect payment directly from your accident settlement. However, you should never comply with such a request if you want to protect your settlement, advises a California injury lawyer.

Allowing the cost of care to be deducted from your settlement could compromise the amount of compensation you receive. Without the adjustment that would be made for an insurer, your medical bills may consume a large portion—if not all—of your settlement money.

You have the right to have Medicare pay for your injury-related medical expenses. Although you will have to reimburse Medicare once your case is resolved, rules governing the amount that can be collected will protect your settlement.

Watch this informative video to learn more.

If a health care provider or hospital is refusing to accept Medicare as a payment option, call 866-981-5596 to speak with a California injury lawyer immediately.

Yes. After an accident, if you pursue a personal injury claim, the other party’s insurance company may request personal information from you, including your Social Security number. Under a recently legislated mandate, explains a California personal injury attorney, you are obligated to supply this information.

In an effort to monitor reimbursement distributed by health insurance companies, state and federal governments have required that Medicare and other health care organizations report certain information, such as the reimbursement rights of parties involved in an accident. Since insurance is often issued to individuals through their Social Security number, this information may be requested during the injury claims process. Moreover, when your case is resolved, you will not receive your settlement check without furnishing this information.

When complying with such requests, be sure that the method in which you choose to communicate personal information is safe and confidential.

Articles, books, and videos on the personal injury claims process are available to the public free of charge.

If you have questions for a California personal injury attorney, or would like to request one of these resources, feel free to call 866-981-5596.