Three Claimants, One Per-Person Limit, and a Twelve-Day Demand
A Delgado Plumbing & Heating van ran a red light and struck a sedan carrying three people. Delgado's business auto policy has liability limits of $100,000 per person and $300,000 per occurrence for bodily injury, plus $50,000 for property damage. The driver, a 19-year-old employee running a shop errand, told police he "looked down at the dispatch tablet." The sedan is a total loss at $24,000 actual cash value. Dana, the driver, has $61,000 in medical bills, $18,000 in lost wages, and a physician's estimate of $150,000 in future care. Passenger Bo has $14,000 in bills; passenger Cy, age 9, has $3,000. Two independent witnesses say Dana's light had been red for at least three seconds, but Dana's lawyer has photos he says show yellow. Dana's attorney has demanded the $100,000 per-person limit and set a 12-day deadline.
1. Map the total exposure under the policy. How should the adjuster allocate available limits among the three bodily injury claimants?
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Liability is strong: the insured driver struck a red light while distracted, and the employer is vicariously liable for an errand within the scope of employment.
Bodily injury exposure:
- Dana: specials alone are $61,000 + $18,000 = $79,000, before general damages and before the $150,000 future care estimate. Economic loss alone approaches $229,000, so Dana is far above the $100,000 per-person cap. Dana is capped at $100,000.
- Bo: $14,000 in bills, plus general damages - well under the per-person cap; value realistically in the $20,000–$35,000 range.
- Cy (minor, $3,000 in bills): modest, but minors' claims require court approval of any settlement and a guardianship/conservatorship process; value roughly $6,000–$12,000.
Aggregate check: roughly $135,000–$147,000 total bodily injury against a $300,000 per-occurrence limit - the occurrence limit is not the constraint; the per-person cap is.
Property damage: $24,000 against a $50,000 limit - fully covered.
Critical point: the per-person cap leaves Dana with roughly $130,000–$180,000 of uncompensated damages. That excess exposure belongs to the insured and is what drives the settlement decision.
2. The 12-day policy-limits demand from Dana's attorney: what must the adjuster do, and what legal exposure makes the deadline dangerous to ignore?
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The clock matters because the insured has excess exposure and the insurer controls the defense.
- Investigate inside the deadline. Twelve days is enough to obtain the police report, witness statements, the medical records, and a rough evaluation of future care. Contact the claimant's counsel in writing immediately to confirm receipt and to request any records not yet provided - do not let the deadline pass without a written response.
- Evaluate honestly. Liability is good but not absolute: comparative fault for Dana is genuinely disputed (two witnesses versus photographs of a yellow light). If liability is clear and damages plainly exceed $100,000, tender of the per-person limit is the defensible course. If a genuine liability defense exists, make a documented, reasoned offer and explain the basis in writing.
- Legal exposure. An insurer that unreasonably fails to settle within limits can be held liable for the entire excess judgment - the insured's claim for bad faith is assignable, and a plaintiff may take an assignment in exchange for a covenant not to execute. Delay with a clear-liability, clear-damages file is the classic fact pattern that produces that outcome.
- Multiple claimants. The adjuster should not freeze simply because there are three claimants; a reasonable, documented evaluation and good-faith settlement with one claimant is permissible. But protect the per-occurrence limit - track commitments so the $300,000 aggregate is never over-committed.
File hygiene: every offer, deadline, and response in writing, with the analysis behind each number.
3. How should the adjuster resolve and document the comparative-fault dispute, and what is the practical effect on settlement value?
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The disagreement is factual, so it must be resolved by evidence rather than by picking a side.
Gather:
- The traffic collision report and any citation issued.
- The signal-timing records from the city for that intersection - this is usually decisive and often overlooked.
- Independent witness statements, taken separately and documented verbatim.
- The photographs, with metadata, so the adjuster knows when they were taken and whether they show the same signal phase.
- The employee's dispatch tablet records, confirming distraction.
Analyze: Weigh witness credibility and physical evidence. If the signal records show red for the van and green for Dana, comparative fault collapses. If genuinely disputed, evaluate a range rather than a single number.
Effect on value: California applies comparative fault, so any percentage assigned to Dana reduces the collectible damages. At 25% fault, Dana's $229,000 economic loss yields about $171,750 before general damages - still above the $100,000 cap, so the per-person limit remains the operative number and the fault dispute does not reduce the insurer's exposure below limits.
Practical consequence: comparative fault is a bargaining tool and a defense to the insured's excess exposure, but it should not be used as a pretext for offering far below limits on a file where damages plainly exceed the cap. Document the percentage range considered, the evidence relied on, and why the chosen offer is reasonable.