Auto Accidents Newsletters

Insurers' Obligation to Indemnify

Under an insurance policy, an insurance company has two principal obligations. One of those obligations is the insurance company's duty to indemnify the insured in the event of a claim within the policy's coverage. The insurance company's duty to indemnify is usually triggered when the insured's legal obligation to pay damages is established either through a court judgment or a settlement. The duty to indemnify depends on facts and not speculation. This makes the duty to indemnify narrower in scope than an insurance company's duty to defend an insured.

Uninsured Motorists Insurance and Government Vehicles

After an automobile collision, many things can affect whether or not an injured person can recover his or her damages from the owner or driver of the vehicle that negligently caused his or her injuries. Among those factors is whether the vehicle was owned by a governmental entity, like a city or state. Often, governmental entities have immunity from suit by injured persons. In those cases, an injured person may seek to obtain insurance benefits under his or her insurance's uninsured motorist provision. Because the injured person is unable to sue the governmental entity, the vehicle may be considered uninsured for purposes of the insurance policy.

Overview of Automotive Products Liability Law

The everyday operation of millions of cars and trucks on the streets and highways of the United States, and the massive resulting toll in deaths, personal injuries, and property damage caused by motor vehicle accidents, have inevitably created a situation in which the manufacturers and sellers of motor vehicles are implicated as potential defendants in legal actions seeking compensation for the losses arising from such accidents. Products liability law, a subset of the branch of the legal system called tort law, provides the legal standards for determining the potential liability of motor vehicle manufacturers and their dealers in such cases. (The principles of products liability law also apply to non-automotive products, but our discussion here will focus on the law of products liability as it relates to motor vehicles.)

Manufacturer Defenses in Automotive Products Liability Cases

The basic elements of proof that a plaintiff has to establish in a products liability action against the manufacturer or seller of a motor vehicle are that the vehicle as sold contained a defect that created an unreasonable risk of death, personal injury, or property damage when the vehicle was put to its intended use and that the defect caused an accident or similar incident, such as a vehicle fire, that resulted in the loss or damage for which the plaintiff seeks to recover damages. Vehicle defects can include shortcomings in the design of a vehicle, mistakes in the manufacture of its component parts or in their assembly into a complete car or truck, and failure to warn the purchaser or operator of a risk inherent in the use and operation of the vehicle. Manufacturers have a number of defenses available to them in seeking to prevent a plaintiff from succeeding in an automotive products liability action.

No-fault Coverage

No-fault insurance coverage essentially provides a less expansive insurance coverage than that of the traditional system, limiting the right of parties to bring traditional fault-based legal actions and the availability of certain types of damages that cannot be directly measured in economic terms, such as damages for what the law terms "pain and suffering," which often make up the bulk of the damages awarded in a traditional court action. In return, the no-fault system attempts to indemnify persons who have suffered personal injury or property damage in an auto accident more quickly and efficiently than can be accomplished by traditional methods, and also to reduce costs for all the participants in the insurance system. No-fault insurance laws often contain exceptions to their limitations on coverage and allow the bringing of traditional court actions in cases where serious injuries are involved.