The Basic Guide to Insurance Coverage, Personal Injury Law and the Legal System

(By Roger P. Tomalas, Attorney at Law)

Why I wrote the Guide

Since 1969 I have been involved in various aspects of the insurance business and with personal injury law. After graduating from UCLA I worked for a major insurance company as an Underwriter (an “underwriter” makes the decision whether or not an insurance company is willing to issue an insurance policy to a particular person, family or business). Afterwards I worked as an insurance agent for a large insurance agency. Those employment experiences introduced me to many types of insurance policies, from basic personal insurance to exotic policies for international companies.

When I was first admitted to practice law in 1976, I was an attorney with a large law firm that specialized in “insurance defense” law. An “insurance defense” attorney is retained by an insurance company to represent a policyholder that has been sued for causing injury or property damage.

As an insurance defense attorney I represented hundreds of defendants in many different types of lawsuits, including motor vehicle accidents, slip and fall cases, products liability, professional malpractice, construction defect, insurance coverage disputes, etc. The primary purpose of my job was to keep settlements as low as possible, or to eliminate them altogether. My experiences taught me strategies used by insurance companies and their attorneys to reduce the amounts that are paid to settle legitimate cases. However, after several years of keeping settlements as low as possible I decided to take what I had learned and to start representing people to maximize the amounts that insurance companies pay to settle cases.

Since 1985 I have specialized in representing people who must make claims against insurance companies due to injuries received in accidents. In most cases the people that I have represented have been involved in their first accident case where they needed the services of an attorney. As a result, I learned that most people are not familiar with basic insurance; and after they have been involved in an accident, they do not understand their rights, how the legal system operates and how to legitimately maximize their claims.

Therefore, I have prepared “The Basic Guide To Insurance Coverages, Personal Injury Law and the Legal System”. I considered naming it “Insurance, Personal Injury Law and the Legal System for Dummies” after the series of successful “Dummy” handbooks. However, I decided against that because insurance and injury claims are serious business, and insurance companies and their attorneys are skilled and crafty. Since this involves your rights, your assets and your money, there is no room for “dummies”.

This guide is intended to provide a summary of basic insurance, basic personal injury law and the highlights of the legal injury system that effect personal injury law. However, this is just summary, and it is not a complete explanation of the subjects that are covered. For insurance matters you should consult with your insurance professional. However, if you, a family member or friend has been injured in an accident, you should consult an attorney who specializes in personal injury cases.

The Basic Guide to Insurance Coverages, Personal Injury Law and the Legal System

Basic personal insurance products that effect individuals. This covers “property and casualty insurance”. It does not cover life, disability or health insurance.

1. Automobile Insurance.

This is the most common form of insurance. California law requires that every automobile and driver must be insured. However, the minimum amounts of liability insurance that is required are very low and in many cases are totally inadequate to cover what has happened in an accident.

Bodily Injury Liability. This protects “the other guy” for injuries if you, a family member or someone driving your car causes an accident. This form of insurance is generally provided with “split limits”, for example $15,000 each person/$30,000 each occurrence, or $25,000 each person/$50,000 each occurrence or $100,000 each person/$300,000 each occurrence, etc.

Property Damage Liability. This pays for property owned by “the other guy” that is damaged in an accident. While it generally refers to vehicles, it also covers light poles, freeway fences, etc.. The lowest limit is $5,000 each occurrence, but most people carry higher limits of $10,000, $25,000, $50,000 or higher.

Medical Payments. This is also known as “Med Pay” coverage, and it extends to you, family members and passengers in your vehicle. It does not matter who caused the accident and it covers medical bills that are not paid by health insurance. Med Pay coverage is generally provided in limits of $1,000, $2,000 or $5,000 each accident.

Comprehensive Coverage. This is generally known as “fire and theft” coverage on your vehicle. There is generally a “deductible” that applies to a claim, which means that you pay the first $100.00, $250.00, $500.00, etc. of each claim. It is rare for a lawsuit to arise out of Comprehensive Coverage.

Collision Coverage. This pays for the repairs to, or the replacement of, your vehicle if it is damaged or destroyed in an accident. It does not matter who caused the accident. Your insurance company must pay. However, a “deductible” usually applies, which means that if you caused the accident, you will have to pay the first $100.00, $250.00, $500.00, etc. of the repairs.

Uninsured Motorist. This is one of the least understood, but most important insurance coverages that people carry. It pays for injuries if you or a family member is injured in your car or another car and if the accident was caused by somebody who did not carry insurance. While most people want to sue the uninsured driver, the simple fact is that most drivers who are uninsured have no assets, and it is a waste of time to attempt to make a claim against them or to sue them. Therefore, Uninsured Motorist coverage (also known as UM coverage) is a “safety net” that protects you, family members and passengers for injuries caused by someone who is uninsured.

If you carry UM coverage then you automatically carry Underinsured Motorist Coverage. This means that if the person who caused the accident is insured, but they do not carry enough insurance to fully pay for your injuries, after you collect all of that person’s insurance, you then make a second claim under your own policy. This allows you, family members, etc. to be fully protected if the person who caused the accident does not carry enough insurance.

Uninsured and Underinsured Motorist coverage usually costs only a fraction of bodily injury liability insurance. Most insurance companies allow you to carry the same amount of Uninsured and Underinsured Motorist coverage as the amount of bodily injury coverage that you carry. Unfortunately, many people do not carry the same amount of Uninsured and Underinsured Motorist coverage as their bodily injury liability coverage, which is a serious mistake, especially if you or a family member is seriously injured in an accident. I recommend that everyone carry the same amount of Uninsured and Underinsured Motorist coverage as their bodily injury coverage.

2. Homeowners Insurance.

Everyone who has a home loan must carry fire insurance to protect the lender. In addition to protecting the actual building, most people want fire and theft insurance on their contents. A “Homeowners” policy provides those coverages. In addition to covering the building and contents, a Homeowner’s policy also provides the following additional important coverages:

Additional Living Expenses. This will pay the difference between what you normally pay to live in your home and what it costs to live in a hotel and eat in restaurants if your home is damaged or destroyed. While it only pays the difference between what you had to spend and what it would have cost to continue to live in your home, that difference can be substantial.

Comprehensive Personal Liability Coverage. This protects the owner and family members against claims made by “the other guy” for injuries caused by almost anything other than in an automobile accident. While there are some limitations, this liability coverage protects the owner if the family dog bites someone, if a visitor trips and falls in the house, etc.

3. Other Special Insurance Coverages

Excess Personal Liability Coverage (This is also known as an “Umbrella” liability policy). As people accumulate assets, which can place them and their assets in jeopardy in the event of a serious accident, some people purchase a “Umbrella” policy, which gives them an additional level of liability insurance over and above the normal coverages provided under their automobile and Homeowners policies.

Boat Owners Policy. This provides coverage on the boat itself and liability coverage if an accident occurs while the boat is being operated. While the number of boat liability claims are low, the usually involve serious injuries.

Personal Injury Claims

While most personal injury claims arise out of vehicle accidents, there are other types of claims that can arise. Examples include slip and fall claims, dog bite cases, products liability cases, medical malpractice, etc. This section will provide a brief summary of the most common types of personal injury claims.

1. Motor Vehicle Accidents & Police Reports.

One of the reasons why police prepare reports after an accident is because many accidents lead to some type of claim.

Usually an accident occurs because someone is at fault. However, many accidents involve “comparative fault”, which means that each of the drivers share some responsibility for causing the accident. These usually involve cases at intersections where there are no witnesses other than the drivers. Basic California law requires that a driver be attentive to the surroundings and keep the vehicle under control. Most accidents are caused by excessive speed, inattention, following too close, failing to stop at stop signs, traffic signals, etc.

If you are involved in an accident, especially an accident that you did not cause, it is extremely important to call the local police from the accident scene and to insist that an officer prepare an accident report. An accident report is important for the following reasons:

The officer interviews all drivers that are involved in the accident, which can be especially important if afterwards one of the drivers changes his/her version of what happened.

The officer interview witnesses, who can make or break a case.

The officer locates “physical evidence” at the scene, including skid marks, debris, etc. Physical evidence can be especially important if a “swearing contest” develops several days later over who was at fault.

After completing the investigation the officer will generally determine which driver caused the accident. Insurance adjusters routinely use these opinions in determining whether to pay or fight a case. Although an officer’s opinion is not admissible in a trial to prove who caused the accident, since the vast majority of cases are settled long before any trial, the officer’s opinion can be the difference between a settlement or a fight with an insurance company over who caused the accident.

2. Slip and Fall/Trip and Fall Cases.

These types of cases fall under the general category of “premises liability”, which means claims against the owner of property where someone has been injured because they slipped and fell or tripped and fell because of a “dangerous condition” on the property. While defining a “dangerous condition” can be difficult, and it sometimes requires the expertise of engineers, it is frequently a matter of common sense. However, it does not matter how seriously someone may have been hurt in this type of case if legal fault cannot be established against the owner of the property.

3. Dog Bite Cases.

People who own dogs are automatically liable if their dog attacks a person. This is known as “strict liability”, and there are very few defenses if a dog bites someone. Furthermore, certain breeds (such as Pit Bulls, Akitas, Dobermans, Rottweilers and German Shepherds) are considered to be vicious and have the propensity to attack people and cause injury. Although most “dog bite” cases do not involve extensive medical bills other than charges at an Emergency Room, since many of the cases involve young children with scars, these cases frequently settle for large sums of money. Most dog owners are generally covered under the liability portion of a Homeowners policy. However, some insurance companies are requiring information about family dogs, and some insurance companies are excluding curtain breeds.

4. Products Liability Cases.

These cases involve alleged defects in the design or manufacturing of products. Since these types of cases generally involve expert witnesses in engineering, almost all of these cases involve catastrophic injuries. These cases can involve a wide range of products, including inexpensive products (such as exploding soft drink bottles) to expensive products (such as automobiles and aircraft).

5. Professional Liability.

While most of these cases involve Medical Malpractice, they can include cases against other professionals such as attorneys, architects, accountants, etc. They all involve situations where a person goes to a professional and relies upon the professional’s expertise, special training, etc. While going to a professional does not guarantee a successful result, if the professional provides service that is less than what is expected from comparable professionals, the former client may have a legitimate case, especially if the former client has suffered some type of monetary loss. Most professional malpractice cases are expensive to pursue because they require “expert testimony” from another professional to explain what was done incorrectly. Examples of professional negligence include:

Medical Malpractice. These types of cases can range from the absurd, such as where the wrong leg was amputated. However, they generally involve more subtle things, such as failure by a doctor to diagnosis a life threatening condition, the failure to properly interpret test results and the failure to provide treatment that most other professionals would provide. Most of these cases are against physicians, but they can also be against hospitals, dentists, podiatrists, chiropractors, etc. (It is extremely important to remember that just because there is a bad medical result, does not mean that a health care provided committed malpractice.)

Legal Malpractice. This is where an attorney does something wrong while representing a client, and that error causes monetary loss to the client. In these cases there are generally a “first” case and a “second” case. In the “first” case, the attorney who is being sued did something wrong, which results in the client loosing the “first” case and suffering a monetary loss. After the “first” case has been lost, the client sues the attorney in the “second” case, and the client attempts to recoup the monetary loss from the “first” case. However, before the client can collect anything in the “second” case, the client must be able to prove that the mistakes made by the attorney in the “first” case fell below the standard of care that other attorneys would have used. If the attorney who handled the “first” case did not fall below the standard of care, and if the client would have lost the “first” case anyway, the attorney has not committed legal malpractice. (It is extremely important to remember that just because the client loses the “first” case does not mean that the attorney committed malpractice.)

The Legal System Involving Personal Injury Cases

It is important to remember that most cases involving accidents with injury are settled long before trial, even if a lawsuit has been filed.

A lawsuit begins with the filing of a “Complaint”. The most common reasons where a Complaint is filed are as follows:

1. The Statute of Limitations is expiring. In order to protect people from being sued after long periods of time have gone by, the law has established “Statute of Limitations”, which are arbitrary periods of time in which a Complaint must be filed or all legal rights are automatically lost. In most personal injury cases the Statute of Limitations is two (2) years from the date of the accident. Therefore, if a accident occurred on March 1, 2004, if a Complaint was not been filed by March 1, 2006, the person who caused the accident is not longer legally liable to the injured person. (However, since the law has created several different Statutes of Limitations, it is extremely important that you consult with an attorney regarding your particular case.)
2. If there is a dispute regarding who caused the accident. While in some cases it is generally clear who caused the accident, there are some accidents where the cause is disputed. When that occurs, the filing of a Complaint starts the legal process towards determining who was at fault. (The “tools” that are used after a Complaint has been filed to determine fault will be discussed later.)
3. If a particular insurance company has the reputation of not being fair. Some insurance companies have developed the reputation of rarely being fair. The filing of a Complaint means that the legal system becomes involved in settling the dispute. In fact, the threat of a trial can force an insurance company to stop stalling and to offer a fairer settlement.

What Happens After a Complaint Has Been Filed?

A Complaint is a legal document that sets out the facts of a case. The “Plaintiff” is the person in whose name the Complaint has been filed and who is seeking money for what happened. The “Defendant” is the people or company that is being sued. (Frequently there are more than one Plaintiff and several Defendants. However, for our purposes we will refer to than singularly.)

After the Complaint has been filed, the Defendant must be “served” with the Complaint, which means it is delivered in some fashion to the Defendant’s house or place of employment. After that happens the Complaint is sent to the Defendant’s insurance company. (Remember we are talking about automobile accidents, slip and fall accidents, etc. We are not talking about divorces, disputes between businesses, etc. where the Defendant has to go hire an attorney.)

After the insurance company receives the Complaint, it sends it to an attorney whose fees are paid by the insurance company. That attorney, who is also known as an “insurance defense attorney” represents the Defendant. The “insurance defense attorney” protects the Defendant by filing an Answer to the Complaint. After the Answer has been filed the insurance defense attorney can do certain things to evaluate the merits of the case filed by the Plaintiff. That process is known as “discovery”.

Discovery in a Personal Injury Case

When a person meets for the first time with an attorney about a possible personal injury case, the attorney asks questions about what happened, what injuries resulted, etc. The attorney may also review documents, medical bills, etc. By doing those things the attorney is attempting to “discover” if the person has a case worth pursuing.

After filing the Answer on behalf of the Defendant, the “insurance defense attorney” has to gather information to learn about the Plaintiff’s case. The process of gathering information is known as the “discovery process”. The most common forms of discovery are:

1. Written Interrogatories. These are a series of written questions that are sent to the Plaintiff’s attorney, which ask basic personal information about the Plaintiff, the injuries that the Plaintiff is claiming, the amount of the medical bills, time missed from work, etc.
2. Request for Production of Documents. This requires copies of certain documents that help to verify the claimed losses. They generally include repair estimates, medical bills, statements from witnesses, etc.
3. Review of Plaintiff’s Medical Records. When a Plaintiff makes a claim for injuries, the Plaintiff’s medical history is subject to scrutiny by the insurance company and the insurance defense attorney. Frequently, all of the Plaintiff’s medical records, even those before the accident, are subpoened and carefully reviewed for prior similar complaints and injuries, inconsistencies, etc.
4. Deposition. This is a “question and answer” session conducted by the “insurance defense attorney”, where the attorney asks questions about the accident, the injuries, the effect the injuries have had upon the Plaintiff, etc. The Plaintiff’s attorney is always present throughout the deposition.
5. Defense Medical Examination. This consists of an examination by a doctor hired and paid by the insurance company to determine the extent of the Plaintiff’s injuries.


Approximately 60 - 90 days before a trial the parties to the lawsuit participate in a Mediation, which is a form of a settlement conference where a judge attempts to get the sides to reach a settlement. The Defendant rarely attends the Mediation because all decisions regarding the case are made by the insurance company. At least 95% of all cases are settled without having to go to a trial.


While less than 5% of all personal injury cases end up in trial, there are some types of personal injury cases where the odds of a case going to a trial are greater, such as slip and fall cases and medical malpractice. Trials are expensive, time consuming and risky. However, sometimes a trial is necessary. Examples of cases where trials are necessary are where there is a dispute as to who caused an accident, when there is a dispute regarding the nature and extent of the injuries that are being claimed, and where the amount of money being offered is much less than the potential damages that could be awarded by a jury.


When a case can not be settled, Arbitration is becoming a popular alternative to trial. Arbitration is a “mini-trial”, which means that both sides are represented by attorneys, both sides can introduce evidence (testimony from witnesses, medical reports, documents, etc) and the decision is made by an Arbitrator. The Arbitrator is an impartial person who is generally agreed to by both sides. While some Arbitrations are “non-binding”, which means that either side can reject the decision of the Arbitrator, more and more Arbitrations are becoming “binding”, which means that the Arbitrator’s decision is final. While there are advantages and disadvantages to Arbitrations, Arbitrations are always less expensive, shorter and less risky than trials.