GEICO policyholder awarded $897,000 in damages for injuries caused by underinsured motorist

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by Jay Pate

A 28-year-old South Carolina man, James Smith, sustained a back and shoulder injury in a 2012 crash on I-26. The accident was caused by Joseph Giordano rear-ending a vehicle behind Smith’s and pushing that vehicle into Smith’s, according to the lawsuit Smith filed. Smith’s injuries from the crash caused Smith to abandon his planned career in the military and instead obtain a medical discharge from the U.S. Army, according his suit.

As Giordano had only $25,000 in insurance, Smith made a claim for underinsured motorist’s coverage benefits under his own policy with GEICO. When he was unable to resolve his claim, the case proceeded to a jury trial.

Under South Carolina law, Smith was not allowed to directly sue his insurance company. Instead, Smith had to sue Giordano, the person alleged to have caused the accident. GEICO then stepped into the shoes of the allegedly-negligent, underinsured driver. The jury is never informed that an insurance company—the plaintiff’s own insurance company—will actually pay any award. After finding that Giordano had been driving recklessly, the jury also awarded $538,500 for punitive damages.

Uninsured/underinsured motorist coverage provides for a driver to receive damages from her own insurance company if she recovers against a negligent driver that does not have any (uninsured) or enough (underinsured) auto liability insurance to cover the damages suffered. The insurance company typically pays the difference between what the uninsured driver can pay and the full amount of damages the injured driver has suffered (up to the limits of the policy).

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