When drivers are involved in a collision with another motorist who lacks insurance or one who doesn’t stop in order to obtain insurance coverage, uninsured motorist coverage can help ensure medical bills and other expenses will be covered.
However, matters can become more complicated when a crash involves a so-called “phantom” vehicle. This is a situation in which another driver is to blame for a single car crash, even though the vehicles never actually collide. Usually, it involves one vehicle running another off the road.
In these cases, the issue of coverage typically depends on the terms of your insurance policy. Many insurers require that there be some minimal physical contact in order to collect uninsured motorist coverage. Others may require some independent corroboration of a “phantom vehicle” being the cause of the crash.
The recent case of Wadeer v. N.J. Mfrs. Ins. Co., before the New Jersey Supreme Court, dealt with a phantom vehicle claim. According to court records, plaintiff suffered serious injuries in a crash that happened while he was reportedly attempting to avoid an unidentified “phantom” vehicle, which which he never actually collided.
Plaintiff had uninsured motorist coverage through his auto insurer, which provided for up to $100,000 in UM coverage. However, when plaintiff made a claim, his insurer rejected it and made no offers to attempt to settle the claim.
Per the terms of the policy, the two parties proceeded to have the matter handled by a private arbitration panel. That panel determined plaintiff was 30 percent liable for the crash, while phantom vehicle was 70 percent responsible. Therefore, the panel awarded plaintiff $87,500.
The insurer, however, rejected this award and demanded the case go to trial.
Plaintiff’s lawyer notified insurer that by rejecting the arbitration finding and demanding trial, the insurer was acting in bad faith. Plaintiff extended an offer of judgment to insurer for $95,000 in exchange for dropping the matter and not pressing forward with a bad faith insurance claim. (Insurers attempt to avoid bad faith claims, which can result in treble damages.)
Insurer rejected the offer and the case continued to trial. There, a jury held phantom vehicle was 100 percent liable for the crash and awarded plaintiff $210,000 for pain and suffering and nearly $12,200 for lost wages.
Plaintiff argued he should be awarded the full amount, despite policy limits, due to insurer’s bad faith actions, of which it had been placed on notice. Insurer argued the issue was not properly raised during trial.
Judge reduced the jury award to $100,000 (plus attorney’s fees and interest) to comply with policy limits, and judge further found insurer’s actions did not amount to bad faith because insurer had debatable reasons for denying the policy limits. Judgment was affirmed by appellate division.
Plaintiff thereafter filed a separate complaint alleging insurer breached its good faith and fair dealing duties by failing to timely settle the claim.
Insurer moved for summary judgment arguing plaintiff’s claim was barred by the doctrine of res judicata, essentially because it had already been decided by the trial judge. The state supreme court granted review, and agreed the claim was barred under the principle of res judicata because the matter had already been previously raised and fairly litigated by trial court.
Still, the case shows phantom vehicle claims can succeed, and plaintiffs should explore all possible options with an experienced accident lawyer.
If you have been a victim of a traffic accident, call Chalik & Chalik at (954) 476-1000 or 1 (800) 873-9040.
Wadeer v. N.J. Mfrs. Ins. Co., Feb. 18, 2015, New Jersey Supreme Court
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