Ridley and DuBray: When Liability is Reasonably Clear


“I was in a car wreck that was not my fault.  The insurance company is saying they’ve determined their insured is 80% at fault, so they will pay me 80% of my medical bills and 80% of my property damage.  Is that legal?”

In Montana, insurance companies have certain obligations to injured parties that begin when liability is “reasonably clear.”  For example, if you are rear ended, liability is reasonably clear because the driver who hit you was failing to drive in a way that would avoid injuring members of the general public.  That driver failed to drive carefully which caused the accident.

When liability is reasonably clear (or when an insurance company admits liability), obligations we refer to as Ridley and DuBray are triggered.  Ridley obligations (named after a Montana Supreme Court case) require an insurer to pay those medical expenses not reasonably in dispute that are caused by the accident in advance of settlement.  Nothing in Ridley limits the expenses the insurer has to pay to the percentage the insurer believes its insured was at fault.  DuBray is another Supreme Court case that imposes the same requirements that Ridley does, but to other undisputed expenses like lost wages.

The bottom line is that Ridley and DuBray require insurance companies to compensate people injured by their insured for expenses that are not in dispute, and requires the insurer to do so before the case has settled.  An insurer whose insured is liable for damages is not permitted to offset how much it must pay for medical expenses or lost wages (or property damage) by what it believes to be your percentage of fault.

For example, if an insurer says their insured is liable, but that you share some of the fault (let’s say 20%), some states permit an insurer to pay you 80% of your undisputed damages.  Montana is different.  Comparative fault (your share of the responsibility for the accident) is dealt with at the time of settlement.  Ridley and DuBray apply to an insurer’s obligations before settlement and do not permit an offset.  The logic behind these cases makes sense.  If someone else causes you to lose wages or incur medical expenses, and their liability for your losses is reasonably clear, you should not have to wait months or years with outstanding medical bills or lost wages.

Do you know what is and is not covered under your automobile insurance policy?  Most of my clients come into my office for the first time after a serious car accident with a false sense of security.  They’ve been told they have “full coverage,” and assume they are “in good hands,” so to speak.  However, insurers are not like good neighbors and it is up to you to purchase the coverage you want in the event of an accident.  The truth is, “full coverage” doesn’t mean a thing in the realm of personal injury law, and figuring out what your policy covers after an accident puts you in a terrible position.

There are several different types of coverage you can purchase.  This is a simple guide to help you understand what your policy includes and what you might want to consider purchasing in the future.  The following assumes that you have been in an accident that was not your fault, and you have suffered damages such as medical expenses and lost wages.

  • Underinsured Motorist (UIM): UIM is, in my experience, the most important coverage you can obtain.  It is relatively inexpensive and will pay for accident related expenses (medical bills, lost wages, pain and suffering, etc.) when your damages exceed the policy limits of the at-fault driver.  Montana law requires drivers to have a minimum of $25,000 in liability coverage.  Of course some people don’t have any insurance, and in that situation, Uninsured Motorist Coverage (UM) is applicable.  UM and UIM are often lumped together in insurance policies.  However, if you have ever been injured, you probably know how quickly medical bills can escalate. The minimum limits of $25,000 just do not cover much if you are in an accident and suffer physical injuries.  It is up to you to protect yourself by purchasing UIM coverage.  UIM limits of $100,000 per person are common among people who purchase this coverage.  It is “personal and portable,” meaning you can tap into this coverage regardless of whether you are injured in your car or someone else’s.  In short, UM/UIM coverage is probably the single most important coverage you can obtain.  And, because it is relatively inexpensive and is used so often by seriously injured people, insurance companies do not really try to sell UIM coverage because it is not in their financial best interest.  Insurers are required to offer UM coverage, but they are not required to talk to you about UIM coverage, so it is up to you.  Get it.
  • Medical Payments: Also called “med pay,” this type of insurance provides no fault coverage for any individual who suffers injuries due to the operation of your car.  This can be you, your sister, your best friend’s aunt … it doesn’t matter.  It is often purchased in amounts like $2,500 or $5,000, but I have seen policies with $100,000 med pay coverage.  It is fairly expensive, but it applies per person.  So if you have four people in your car and all four are injured, it will pay the limit you purchase to each person.  It also follows you, so if you are injured in another person’s car, you can access your med pay coverage regardless of who was at fault.
  • Bodily Injury: BI coverage is the limit your insurance will pay to someone you injure.  The law requires you to have at least $25,000 worth of BI coverage.  The general rule is that the more you are worth (in terms of assets and cash), the higher you want this coverage to be.  Keep in mind that if you severely injure someone in a car accident that is your fault, you are liable for all of the injured party’s damages, regardless of what kind of coverage you have.  So, if you have the minimum limits of $25,000 and you cause an accident that results in someone suffering $100,000 in damages, the injured party can sue you personally for the $75,000 worth of damages not covered by your insurance.  Another way to think about this is that you want to buy coverage in an amount that insulates you from personal liability.

This is a very basic layout of some of the more important coverages you should be aware of.  There are others (property damage, etc) but from the perspective of a personal injury attorney, these are most commonly at issue when someone is injured in a motor vehicle accident.

So where do you go to find out which of these coverages your policy includes?  Check the declarations page of your policy (often referred to as the “dec” page) which lists what your policy includes as well as the amount the insurance company will pay under each type of coverage.  Finally, when it comes to choosing an insurance company, do your homework.  There are companies who have been sued by their policy holders countless times for acting in bad faith and not protecting them or paying the benefits they are entitled to under their policy, and there are insurers who tend to put their insured before their own self-interest.  Do NOT be influenced by catchy slogans.  Sometimes it turns out that somebody you considered a good neighbor is actually a terrible person.  Good luck!

Insuring your car: what is full coverage?