The Personal Injury Claim Interpleader Suit or Settlement Explained

by Tina P.
(Columbia, MD)

An Interpleader as pertains to a personal injury claim is essentially another form of court-approved

sonal-injury-claim-settlements.html">settlement initiated by the insurance company. It is used when there are multiple personal injury claims being presented against a tort-feasor’s insurance policy. When the total amount of personal injury claim values exceeds the amount of available insurance and the injured parties and their attorneys cannot agree on how to divide the insurance money, the insurance company may file an Interpleader Suit with the appropriate court. The Court then notifies all of the injured parties that there will be a hearing and will apportion the money as it deems appropriate.

For example, there may be five individuals making personal injury claims against a liability policy with $20,000 in coverage. Together, the five individual claims are worth a total of $50,000. The individuals cannot agree on how to divide up the $20,000. Rather than leave the claim open indefinitely, the insurance company with the $20,000 policy files a lawsuit with the appropriate Court and petitions it to decide how to divide the money between the injured people.

The Court may or may not take into account issues like whether or not the injured parties have other insurance available to them such as underinsured motorist coverage when deciding how to divide the money fairly. The insurance company then waits for the Court’s decision and issues the settlement checks accordingly.

This article is written for informational purposes and is not intended to take the place of competent local legal counsel.

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