The Stale Yellow Light
On a rainy March evening in Tacoma, 17-year-old Marco, driving his parents' insured Camry, enters an intersection on a stale yellow light and is struck by Reyes, who ran the red. The investigating officer assigns Marco 20% of the fault. Marco's friend Priya, riding in the back seat, has $70,000 in medical bills and lost wages. Marco has $40,000 in damages. The family's auto policy carries Washington minimum liability limits of 25/50/10, $10,000 of PIP, and 25/50 uninsured/underinsured motorist coverage. Reyes carries 25/50/10 with no UIM.
1. How much of Reyes's policy is available to Priya and to Marco, and what does PIP add?
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Reyes's 25/50/10 is the first layer, and it is thin.
- Priya's claim against Reyes: $70,000 in damages, capped at the $25,000 per-person limit.
- Marco's claim against Reyes: $40,000 reduced 20% for his own fault = $32,000, capped at $25,000.
- Per-accident limit is $50,000, and $25,000 + $25,000 exactly consumes it. No allocation fight on these numbers - but if either had claimed less, the other would not automatically absorb the remainder, since the per-person cap still binds.
PIP adds a separate layer. The family's $10,000 PIP pays Priya's medical bills promptly as a passenger in the covered auto, regardless of fault, and does not draw down the liability limits. It may carry a reimbursement right against the liability settlement, so the adjuster should not treat PIP as free money for Priya.
What Priya has so far: $25,000 liability + $10,000 PIP = $35,000 against $70,000. She is halfway whole and needs the next layers.
2. Does the family's own liability coverage pay Priya, and how does Washington's comparative fault rule change what Marco owes?
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Yes, but only for Marco's share. Washington is a pure comparative fault state: a claimant's recovery is reduced by his or her percentage of fault, and liability among multiple defendants is several, not joint, in most cases.
- Marco is 20% at fault, so his exposure to Priya is 20% × $70,000 = $14,000.
- That is within the family policy's $25,000 per-person limit, so the carrier pays the $14,000 and defends Marco.
- Priya is not a family member, so no household exclusion applies.
Priya's ledger: $25,000 from Reyes + $14,000 from the family policy + $10,000 PIP = $49,000, leaving a $21,000 shortfall.
Her remaining route is UIM. She is an insured under the family policy as a passenger occupying the covered auto, so the 25/50 UIM can respond. Her UIM claim would be her damages minus what she collected from the tortfeasors ($70,000 − $39,000 = $31,000), capped at $25,000. She should also check whether she has her own auto policy with UIM; coverage priority and stacking rules will decide which responds first.
3. Marco's shortfall is $7,000. Does the family's UIM respond, and what three issues should be checked before paying?
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It appears to respond, but check the form.
- Marco's damages: $40,000. Reyes paid $25,000. Gap: $7,000, inside the $25,000 per-person UIM limit.
- He is an insured, and Reyes is underinsured because the available limit is less than Marco's damages.
Three things to verify:
- The reducing vs. non-reducing clause. Many UIM forms reduce the limit by amounts paid by the at-fault driver, which still leaves enough here; others pay the gap directly. Read the endorsement.
- Whether comparative fault survives into UIM. UIM stands in the shoes of the underinsured motorist, so Marco's 20% fault already reduced his $40,000 to $32,000 before the $25,000 was applied. A carrier that pays $7,000 is applying fault correctly; one that pays $15,000 has given away the comparative-fault defense.
- PIP interaction and duplicate payment. PIP already paid Marco's medical bills. Confirm the form's offset language, and remember the outside cap: Marco cannot net more than $40,000 across all sources. Indemnity, not luck, sets the ceiling.