You go to a lawyer.
This is relatively simple if your lawyer knows how to do it. If you try to do it yourself, you might screw things up. Here is what your lawyer has to do:
1) Get the other driver’s insurer to offer their limits, in exchange for you signing a release that says you can not sue the other driver. In your case, this should be simple. The lawyer has to get the insurance company the medical bills and records – if it’s clear they were caused by the accident, the other driver’s insurance should offer its limits (in this case, $25,000.00) right away.
What if they don’t acknowledge the case is worth that much? You have to sue the other driver.
Can you settle with your own insurance company on your underinsured motorist claim if the other driver’s insurer won’t offer their limits? That is up to your own insurance company. But chances are, if the other driver’s insurer won’t offer their limits, your own insurer probably won’t either.
2) Once the other driver’s insurer makes an offer of its limits, your lawyer has to tell your own insurance company that the offer has been made.
3) Then your insurance company has a choice. It can either (a) let you take the money from the driver’s insurance company and sign the release of the other driver or (b) substitute its own money for the other insurance company’s money (that is, your own insurance company has the opportunity to pay you, in this case) $25,000.
Why would your insurance company take option (b)? There are a couple reasons. Whenever an insurance company pays money to its own insured under an underinsured policy, it gets the right to recover that money from the other driver and his insurance company. This is called subrogation.
And when you sign a release from the other insurance company in exchange for their payment of their limits, you are signing away not only your right to recover the money from the other driver, but also your insurance company’s right to recover that same money.
So when your own insurance company is presented with the option of advancing its own money, or letting you release your (and their) claims against the other driver, it needs to know certain information. One question is how likely will they be to recover anything at all from the other driver. If the other driver is Warren Buffett, or Bill Gates, it is not that much of a risk for the other insurance company to advance its own money. Your insurance company will be able to recover from Warren or Bill every penny that it pays you.
But let’s say that the other driver is not Bill Gates or Warren Buffett. Instead, he is like a lot of other underinsured drivers – no assets, no substantial employment, a poor collection risk. Your insurance company is more likely to just let you release the other driver, and then make a claim against your underinsured coverage for the difference between what the other driver’s insurer paid and the full value of your claim.
And let’s look at a third scenario. Suppose that the other driver has some – not a lot of – assets, but also some unattractive traits – for instance, maybe he was drunk, speeding, and running a red light when the accident occurred. There are reasons you may not want to release him until you are ready to resolve your underinsured claim.
Because as long as he is a defendant, you would have a punitive damage claim against him, and in front of the jury your lawyer will be able to talk about how drunk and irresponsible he was. (You cannot collect punitive damages from insurance; but the fact that you might ask for it will make everyone else nervous.) And your own insurance company will be worried that the jury will be mad at the other driver for being drunk, resulting in a much larger (compensatory damage) award, that they will have to pay.
From your standpoint, if you release the other driver, you get money now(whatever the other driver’s limits are) but you lose your chance to inflate your verdict against your own insurance company by talking about how drunk the other driver was.
And if your insurance company chooses to advance the other driver’s insurance limits to you, it keeps the other driver in the case as a defendant – again, so you can talk about him in front of the jury. But if it lets you release the other driver, it won’t be able to recover whatever money it pays out on your claim.
4) Finally, there is this to think about. If you don’t tell your insurance company that the other driver’s insurance has made a limits offer, and just release the other driver in exchange for a payment of the limits, you may be invalidating your own underinsurance coverage. Why? Because your release of the other driver also blocks your own insurance company from recovering on its subrogation claim against him. And there is a clause in your underinsured motorist coverage policy that says that you have to do everything you can to help your insurance company get its money back.
OK. That’s enough for anyone to think about. But after all this, I think you can probably see why I started with the advice to go to a lawyer.
I have been a lawyer over 30 years. If you want everything you are entitled to, it’s not always easy to get to it. If you’ve been in an accident and you don’t know how to deal with the insurance company give me, a Cincinnati personal injury lawyer, a call. My phone is 513-621-4775.
Because all situations are different, and because there may be other facts pertaining to your case that I don’t know about, you should not rely on this answer for legal advice. I am not your attorney, and no lawyer client relationship has been formed. All discussions are limited to Ohio law unless otherwise indicated. And past performance cannot be used to predict future results.