Left-Turn Collision: PIP, Comparative Fault, and a $250,000 Demand
Your insured, driving a pickup under a Kentucky auto policy with 100/300/50 liability limits and the mandatory $10,000 basic reparations (PIP) benefits, turned left across oncoming traffic on a rainy evening and was struck by a sedan traveling 15 mph over the posted limit. The sedan driver, age 41, suffered a herniated disc requiring surgery. Billed medical charges are $42,000; her own PIP carrier paid $10,000 and her health plan paid $18,000, leaving $2,000 out of pocket. She missed nine weeks of work earning $4,000 a month. Her attorney demands $250,000. Your reconstruction and the police report place your insured at 60 percent fault and the claimant at 40 percent. Liability is disputed, and her records show a 2016 back strain at the same lumbar level.
1. Evaluate the claim, state which coverages are implicated and the effect of the claimant's PIP, and set a defensible reserve.
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Coverages. The liability limits (100/300/50) respond to this third-party claim. Your insured's own PIP responds to his injuries and is irrelevant to her evaluation.
PIP effect. The $10,000 paid by her own carrier is economic loss already compensated under the Motor Vehicle Reparations Act and is not recoverable again from your insured in the tort action. Build the evaluation on the remaining medicals and the wage loss - do not simply add the billed charges and the PIP together.
Exposure math. Economic damages: roughly $42,000 in billed medical (net of write-downs) plus about $9,000 in lost earnings. General damages for a surgically treated herniated disc in a 41-year-old typically run one to one-and-a-half times the specials. Full value: approximately $100,000 to $130,000. At 60 percent fault for your insured, exposure is roughly $60,000 to $78,000 - well inside the $100,000 per-person limit, so there is no excess exposure issue to flag.
Reserve. Set $75,000 and note on the authority sheet that the 2016 strain and the 40 percent comparative fault are the two levers.
2. Explain how Kentucky's comparative fault rule changes the $250,000 demand and how you would use the prior back strain.
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Comparative fault. Kentucky is a pure comparative fault state, and fault is apportioned among all parties under KRS 411.182. The claimant's 40 percent does not bar her claim - it reduces it dollar for dollar. The $250,000 demand is a negotiating position that ignores both the fault split and the specials. A judge or jury applying the apportionment statute cannot award more than the evaluated full value reduced by her share.
Prior injury. A 2016 strain at the same level is a causation issue, not a liability issue. Do not simply announce that she is 'already damaged goods.' Request the pre-accident records from that provider, ask her treating physician in writing to apportion the current findings between the 2016 condition and this collision, and reserve an independent medical examination if the records are ambiguous. An apportionment opinion from her own surgeon is worth more than your argument.
Response. Acknowledge the surgery and the wage loss in writing, show the arithmetic, open around $35,000 to $45,000, and hold authority to land between roughly $55,000 and $70,000 if the medical records support causation. Never tender the $100,000 limit on this file.
3. What do you do about the $10,000 PIP and $18,000 health plan payments when negotiating the third-party settlement?
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PIP. That $10,000 is a matter between the claimant and her own reparation obligor. It is not part of her tort claim against your insured and should not appear in your settlement figure. Ask her carrier in writing whether it asserts a subrogation or reimbursement interest; if it does, the issue is between the carrier and its own insured, not a reason to increase what your insured pays.
Health plan. The $18,000 paid by her health plan is a collateral source paid on her behalf. It does not reduce the tortfeasor's liability for the reasonable value of the treatment, but the plan may hold a reimbursement right out of her recovery. Get a lien letter from the plan and, where possible, structure the release so it discharges your insured and identifies any lien holders, or obtain an indemnity from the claimant for liens she has not resolved.
Documentation. Write the allocation into the file: gross settlement, the specials that underlie it, the amounts excluded as PIP, and the lien status. A later reviewer must be able to see why the settlement figure differs from the sum of the bills.