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Missouri HB 1531 Favors Car Insurance Companies over Consumers by Limiting Auto Accident Payouts

You pay your premiums on time. You drive within the speed limit. You don’t text and drive.

But despite our best efforts and intentions, accidents can still happen to even the most conscientious drivers. If you find yourself at fault in a car crash, you expect your insurance company to be there to defend your interests, make a good faith effort to settle claims and pay its fair share.

Those expectations are now in doubt for drivers in Missouri, where the General Assembly recently passed House Bill 1531, which limits insurance company responsibilities in situations where an at-fault driver causes an accident that injures more than two other persons.  

How Does HB 1531 Work?

More specifically, the law pertains to cases involving “multiple claims against the same insurance coverage,” in which “claims total an amount in excess” of the insurer’s “total limits of coverage available for that one incident,” according to the statute.

Here are more specifics on how the new law works:

  • An injured party in the accident makes an “offer of settlement or demand for payment” from the insurance company.
  • Within 90 days, the insurance company may file for what is called interpleader status.
  • If the court grants interpleader status, the insurance company has 30 days to deposit “all of its applicable limits of coverage into court.”
  • In return for making such a deposit to the court, the insurance company “shall not be liable to any insured or defendant for any amount in excess of the plaintiff’s contractual limits.”
  • According to the law, the insurance company must still defend “all of its insureds in good faith from any claims or lawsuits for damages allegedly caused by the incident.”

How Does HB 1531 Affect Consumers?

The law’s critics point out that insurance companies are no longer “on the hook” if the client is sued.

For example, a driver who has an active insurance policy with $25,000 in liability coverage causes an accident in which three people are injured. The medical bills of the injured parties total $10,000, $15,000 and $7,500 respectively, for a total of $32,000. Under the new law, the insurance company can deposit $25,000 to the court and walk away, leaving their insured possibly on the hook for the remaining $7,500 (or more) plus the cost of the attorney to defend you.

In an Associated Press article published before the bill’s passage, one personal injury attorney notes that the law allows insurance companies to not necessarily act in the best interest of their clients. He further argues that insurers no longer have an incentive to put on a vigorous defense.

In other words, the at-fault driver, who has faithfully paid premiums to the insurance company to protect him or her in the event of an accident, is left as a defendant in a lawsuit against multiple injured people.

Meanwhile, the insurer protects its own interests, avoids further liability and neglects its responsibility to do what insureds expect of their insurance companies when an accident happens — get the claims against them settled.  

This law encourages an insurer to not even try to settle multi-party claims against its insured and simply wipe its hands of many of its obligations under the insurance policy.

This law could negatively impact anyone who has purchased insurance and makes a mistake resulting in an accident. In these circumstances, Missouri drivers cannot expect their own insurance company, to whom they have paid premiums, to truly have their back and fulfill all of the duties imposed by the insurance policy.

At Eng & Woods, we strive to be a trusted resource on any legal implications affecting Missouri residents. It should be noted that our firm is a plaintiff’s firm and not positioned to assist at-fault drivers.  


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