Senator Waltz has introduced SB 124 which provides that, in an action against an insurer, only a named insured or a person seeking status as an insured under the terms of the insurance contract may bring an action for declaration of coverage before judgment has been entered on the underlying claim.
I am guessing here, but I suppose this is designed to stop an injured party from suing a potential insurer of a tortfeasor, before obtaining a judgment against the tortfeasor, for a declaration that the tortfeasor has insurance.
As a purely legal matter, I think this makes a lot of sense. The victim has no direct rights with respect to the tortfeasor’s contract with his or her insurer. After the victim obtains judgment against the tortfeasor, the victim might acquire the tortfeasor’s contract rights against the insurer as an asset to be applied toward the judgment.
As a practical matter, I can see where a plaintiff’s attorney would like to be on solid ground with respect to available insurance dollars before spending a bunch of money on the case, trying to run up the judgment amount. If all you’re going to get is the tortfeasor’s $100,000 house, why pay a bunch of high priced experts to testify that your client has suffered millions of dollars in damages?
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