Florida’s Dangerous Instrumentality Doctrine is a long-standing legal principle that makes the owner of a motor vehicle vicariously liable for injuries caused by someone else driving that vehicle with the owner’s knowledge and consent. In other words, if you own a vehicle and give another person permission—express or implied—to drive it, you are liable for any negligence that driver commits while operating the vehicle. The doctrine comes from common law, not statute. Florida first adopted it in Southern Cotton Oil Co. v. Anderson (1920), reasoning that automobiles are inherently dangerous when operated and therefore owners must be held responsible for their use.

Premium charges for Florida motor vehicle insurance policies are primarily risk-based—meaning insurers calculate how likely a claim will be filed against the policyholder and how costly that claim might be. The higher the risk, the higher the premium. One factor that affects the level of risk to the insurer under a motor vehicle policy is the number of individuals who are likely to be driving the insured vehicle, such as individuals living in the same household.

During the insurance application process, applicants are required to disclose all household members, particularly those of driving age. Providing false or incomplete information in response to this question may give the carrier grounds to deny coverage in the event of an accident.

One way policyholders can help manage their premium levels is by designating certain household members as excluded drivers under the policy. See Florida Statute 627.747. When a driver is specifically listed as an “excluded driver” on an automobile insurance policy, that exclusion is very strong. Here’s how it works:

• No coverage for the excluded driver: If the excluded person is operating the vehicle and causes a crash, the insurer will deny liability coverage for that driver. That means the policy does not step in to defend or indemnify the excluded driver.
• Coverage for the named insured/owner: If the vehicle owner (who is the policyholder) is sued under a theory of vicarious liability (for example, because Florida law generally makes owners liable for the negligence of permissive drivers under the dangerous instrumentality doctrine), the outcome depends on how the exclusion is written:
  • Many Florida policies expressly exclude not just the driver, but also any liability imputed to the owner arising from that driver’s negligence. In those cases, the insurer will deny coverage both for the excluded driver and the owner.
  • However, if the exclusion is worded narrowly (excluding only the driver’s liability, not the owner’s vicarious liability), the owner may still be covered for lawsuits brought against them, even though the driver is excluded.

Our firm recently encountered such an issue. Our client was injured in a crash caused by another driver’s negligence. It was later revealed that the driver had been designated as an excluded operator under the vehicle owner’s insurance policy. Accordingly, we requested a copy of the owner’s policy for review.

Unfortunately, the Progressive insurance policy stated in clear and unambiguous terms that the exclusion “includes any claim or suit for damages made against you, a relative, a rated resident, or any other person or organization that is vicariously liable for an accident arising out of the operation of a motor vehicle by the excluded driver.”

To make matters worse, neither the driver nor the vehicle’s owner has sufficient personal assets to cover our client’s losses. We confirmed this after conducting an asset search.

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Contact us toll free at 866-785-GALE or by email (jgale@jeffgalelaw.com) for a free, confidential consultation to learn your legal rights.

Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.

While prompt resolution of your legal matter is our goal, our approach is fundamentally different. Our clients are “people” and not “cases” or “files.” We take the time to build a relationship with our clients, realizing that only through meaningful interaction can we best serve their needs. In this manner, we have been able to best help those requiring legal representation.

A Medicare Set-Aside is a legal device used to make sure Medicare covers future medical expenses associated with accident-related injuries.

When Medicare began in 1966, it was the primary payor for all claims except for those covered by Workers’ Compensation, Federal Black Lung benefits, and Veteran’s Administration (VA) benefits. In 1980, Congress passed legislation to expand the exception list to include the following plans:

• Liability insurance plans (automobile, premises)
• No Fault (PIP)
• Self-Insured

All of these plans, rather than Medicare, are considered primary payors of medical expenses covered by the respective policies. In 2007, Congress passed legislation imposing reporting requirements on primary payors. The requirements, which involve furnishing Medicare with claim-related information, are laid out in section 111 of the Medicare, Medicaid, and Schip Extension Act of 2007. The purpose of the requirements is to keep Medicare from paying for medical care that is otherwise the responsibility of primary payors. Congress has decided that Medicare, which is a taxpayer-funded program, should not bear primary responsibility for medical expenses covered by insurance policies and self-insureds.

The Centers for Medicare & Medicaid Services (CMS) has issued rules for when an MSA must be used in workers’ compensation cases. The guideline is that injured workers must be eligible for Medicare or expect to be eligible within 30 months of the settlement of the workers’ compensation case.

Individuals become eligible for Medicare based on age or disability. The age for entitlement is 65, while individuals under 65 become eligible after they have been qualified to receive Social Security Disability Income (SSDI) benefits for 24 months. Many people injured in accidents apply for SSDI, implicating MSA issues.

CMS has not issued guidelines for personal injury cases. However, as the reporting language and other requirements do not distinguish between workers’ compensation and personal injury cases, it is reasonable to conclude that the MSA law applies equally to both.

An MSA designates portions of the proceeds of a settlement to pay for future accident-related medical expenses. Typically, the set-aside amount is determined by experts employed by the parties — in workers’ compensation cases, the expense is always covered by the carriers — based on medical conditions and anticipated needs. In many instances, CMS will review the proposed set-aside amount to determine adequacy. It has the option of approving the proposed amount or requiring more. On rare occasions, it will even require a lower amount. To avoid future issues, it is always better to get CMS’s approval. However, CMS will only review WCMSA proposals that meet the following criteria:

• The claimant is a Medicare beneficiary and the total settlement amount is greater than $25,000.00; or
• The claimant has a reasonable expectation of Medicare enrollment within 30 months of the settlement date and the anticipated total settlement amount for future medical expenses and disability/lost wages over the life or duration of the settlement agreement is expected to be greater than $250,000.00

Medicare Set-Asides are not mandatory. No law is violated for not using one. However, if one isn’t used where the injured person is eligible for Medicare or expects to be eligible within 30 months of the settlement, Medicare will require that 100% of the settlement money be used to pay for accident-related medical services before it will begin to cover any accident-related medical expenses. (Even without an MSA, Medicare will continue to cover the medical expenses of care unrelated to the accident.)

With an MSA, especially one that has been pre-approved by CMS, Medicare will become the primary payor once the MSA money is exhausted. However, CMS places the burden on the Medicare recipient to prove the money was exhausted appropriately. Because the paperwork is onerous and exacting, it may be advisable to use a company to administer the MSA. A number of companies offer the service at a reasonable rate — $1,000 for one we did recently.

An MSA can also be self-administered. Because of the difficulty in administering the MSA and the consequences of failing to do so correctly, we have our clients who choose this route sign a document acknowledging the risks and their duties and responsibilities.

The need for an MSA can make it more difficult to settle a case. Except to pay for medical care, a portion of the settlement proceeds is beyond the reach of the injured party. Some of our clients decide to use the MSA-earmarked money on unrelated expenses. Where, after thoughtful consideration, it is decided that the medical needs for the accident-related injuries will be nominal, this can be a safe option.

There is no reason to believe that MSAs are not a necessary tool in personal injury cases. It may be time to start treating them like they are.

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Contact us at 305-758-4900 or by email to learn your legal rights.

Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.

While prompt resolution of your legal matter is our goal, our approach is fundamentally different. Our clients are “people” and not “cases” or “files.” We take the time to build a relationship with our clients, realizing that only through meaningful interaction can we best serve their needs. In this manner, we have been able to best help those requiring legal representation.

DISCLAIMER: This information provided by Jeffrey P. Gale, P.A. is for informational purposes only and is intended to be used as a non-legal guide prior to consultation with an attorney familiar with your specific legal situation. It should not be considered legal advice or counseling. No such legal advice or counseling is either expressly or impliedly intended. This information is not a substitute for the advice or counsel of an attorney. If you require legal advice, you should seek the services of an attorney.