Reconsideration of Credits in UIM Claims Under Fair Share Act

Posted By Haggerty, Goldberg, Schleifer & Kupersmith, P.C.

James C. Haggerty, Esq. and Suzanne Tighe, Esq. recently authored an article entitled “Credits in UIM Claims Under Fair Share Act.” This article addresses the issue of potential recovery of motor vehicle accident victims in Pennsylvania who are pursuing underinsured motorist claims against insurers. Jim Haggerty and Suzanne Tighe maintain the position that insurers are not entitled to diminish the amount of recovery, as they have attempted to do since the inception of the Financial Responsibility Law. Click here for a copy of the article authored by Jim Haggerty and Suzanne Tighe.

In Pennsylvania, a plaintiff if permitted to settle a claim for less than the policy limits of the tortfeasor in underinsured motorist (“UIM”) claims IF the UIM insurer is given credit for the full limits of available liability coverage. In a situation with more than one tortfeasor, this credit system can be problematic for plaintiffs; for example, in cases involving a minimally liable defendant with high limits. While this allocation system is fair for claims under the Joint and Several rules of the pre-amendment Comparative Negligence Act, this system should be reconsidered in claims made after the implementation of the Fair Share Act, under which the credit to the UIM insurer for the entire liability limit of the minimally liable defendant is no longer equitable nor warranted.

Before the Fair Share Act was enacted, Pennsylvania had Joint and Several Liability, which stated that a plaintiff could recover the full amount of the allowed recovery from any defendant against whom the plaintiff is not barred from recovery. Under this law, any defendant who is found to be even one percent negligence could be held responsible for paying an entire verdict. A credit for the full limits of liability coverage for all tortfeasors was therefore acceptable and fair. This is no longer the case under the Fair Share Act, which means that the credit rule in UIM claims needs to be reconsidered for situations with multiple tortfeasors.

Now, a tortfeasor will only be responsible for an entire verdict only if they have been found at least 60 percent or more at fault for the accident – otherwise, contribution is limited to the proportionate share of fault.

The Fair Share Act eliminates the Joint and Several concepts , which will have an effect on settlement values. Good personal injury attorneys should be aware of these changes and the most effective ways to handle an accident claim involving UIM coverage.

For further information, request a free consultation to speak to a Pennsylvania car accident attorney at Haggerty, Goldberg, Schleifer & Kupersmith, P.C. Please call our office at (267) 350-6600.