One Left Turn, Three Claimants
Maria insures two vehicles in Santa Fe with a personal auto policy carrying 25/50/10 liability, $5,000 medical payments, and 25/50 uninsured/underinsured motorist coverage. Her 19-year-old son David lives at home, is licensed, and is listed as a driver. David makes an unprotected left turn across traffic and is struck by Priya, who is traveling 15 mph over the posted limit. The investigating officer assigns David 80% of the fault and Priya 20%, and New Mexico applies pure comparative fault. Priya's medical bills are $120,000 and her car damage is $18,000. Her passenger Sam has $30,000 in medical bills. David has $40,000 in medical bills. Priya carries 100/300 liability coverage of her own.
1. Allocate Maria's policy limits among Priya, Sam, and Priya's property damage. Explain how comparative fault interacts with per-person and per-occurrence limits.
Read the worked answer
Reduce each claim by the claimant's own fault first, then apply limits. Under pure comparative fault a claimant's recovery is reduced by their percentage of fault but is never barred.
Priya - bodily injury. $120,000 × 80% = $96,000 claim against Maria's policy. Per-person limit is $25,000 → paid $25,000.
Sam - bodily injury. $30,000 × 80% = $24,000, inside the per-person limit → paid $24,000.
Per-occurrence check. $25,000 + $24,000 = $49,000, within the $50,000 per-occurrence cap. Only $1,000 of occurrence limit remains, and it cannot be redirected to property damage because property damage carries its own limit.
Priya - property damage. $18,000 × 80% = $14,400, capped by the $10,000 PD limit → paid $10,000.
Total from Maria's policy: $59,000, leaving Priya with $71,000 of uncompensated bodily injury and $4,400 of uncompensated property damage. Those unpaid amounts are Maria's personal exposure unless other coverage (her own UIM, or Priya's UIM on her own policy) responds. Note the sequence: fault reduction happens before the limit, which is why the carrier pays the full $25,000 to Priya despite an 80% reduction.
2. Is David an insured under Maria's policy? Does his own negligence bar his claim, and what can he recover?
Read the worked answer
Status as an insured. David is a resident relative of the named insured and a permissive operator of a covered auto, so he is an insured for liability purposes. Listing him as a driver affects rating and underwriting, not coverage status.
Effect of his own fault. New Mexico uses pure comparative fault, so his 80% share reduces but does not bar his recovery. His $40,000 in medical bills yield a claim of 20% × $40,000 = $8,000 - against Priya's liability coverage, since Priya was 20% at fault. Priya carries 100/300, so the $8,000 is paid in full.
Medical payments. Maria's $5,000 MedPay pays David's medical bills regardless of fault, up to the limit. Advise him that MedPay is first-party no-fault money and may be subject to subrogation or offset against a later liability recovery, so the source of payment should be coordinated rather than duplicated.
Why his UIM does not apply. UIM requires the at-fault party to be underinsured relative to the claim and the insured's UIM limits. Priya's $100,000 per-person limit comfortably exceeds David's $8,000 net claim, so there is no underinsured motorist claim on Maria's policy.
3. Suppose Sam's medical bills had been $80,000 rather than $30,000. Recalculate and advise Maria on limits.
Read the worked answer
Recalculation. Sam's claim: $80,000 × 80% = $64,000. His per-person limit is $25,000, so his cap is $25,000. But the per-occurrence limit is $50,000 and Priya has already consumed $25,000 of it. Sam therefore collects $25,000 - the per-person cap and the remaining occurrence limit happen to coincide - leaving $39,000 of his $64,000 claim unpaid by Maria's policy.
Sam's remedies: his own UIM coverage on his own auto policy, if he bought it and it exceeds the tortfeasor's limits, plus a personal claim against Maria and David for the shortfall. That is the trap: two claimants and a 25/50 policy produce a shortfall even though each individual claim looked manageable.
Advice to Maria.
- 25/50 is the state minimum, not a financial plan. Two injured people in one accident exhaust it before either is made whole.
- Recommend 250/500 liability plus a $1,000,000 personal umbrella; most umbrella carriers require 250/500 underlying limits, so the underlying limits must be raised first or the umbrella will not sit cleanly on top.
- Raise MedPay above $5,000 given health-plan deductibles, and confirm UIM limits at least equal the liability limits - declining or minimizing UIM leaves the household exposed to exactly the uninsured/underinsured drivers the coverage exists for.
- Document the limits conversation. In a serious-injury state, an underinsurance gap is one of the most common producer E&O claims.