Have you been injured in an accident and you are encountering problems with your insurance compensation because the claims exceed the limits of the insurance policy? In this situation, it’s possible to file a claim against your own insurance policy if you have coverage or “underinsured” accidents. Or, another option is to sue the person at fault if they have assets to cover the costs.
For example, when a person responsible for the accident or injury has $25,000 in liability insurance and your claims exceed this amount, then you can pursue action to collect all $25,000 available through the insurance policy. Additionally, you might choose to pursue compensation for the rest of the amount through a lawsuit against the person’s personal assets.
When the Hamilton Buyout Applies
When you receive money from your own insurance policy, it means that your insurance company has “subrogated interest” which allows them to seek compensation for their losses from the party at fault.
If you are planning to sue the person at fault, then the insurance company has interest to pursue the assets of this 3rd party in order to reduce the amount they need to pay for underinsured coverage. In some situations, the insurance company will decide to move forward with a Hamilton Buyout, which means they pay the $25,000 you would have received from the other insurance company. Basically, your insurance company is “buying” the lawsuit because they can see the potential gains from pursuing assets from the party at-fault.
It’s not common for insurance companies to make this decision. But the insurance company must be given the opportunity to protect their own interests if needed.
Settling Your Lawsuit
A Hamilton buyout isn’t always necessary, especially because there are often ways that a claim can be settled. The best solution is to talk to an experienced attorney for assistance to determine the optimal strategy for maximizing your claims.