In Pennsylvania, when one spouse is injured, the uninjured spouse may bring a claim for monetary compensation for the loss of all the services and companionship of the injured spouse.
There are a few things that you should know about settling loss or consortium claims, and when to take them to trial.
SETTLING LOSS OF CONSORTIOM CLAIMS
Although a loss of consortium claim is a distinct cause of action, it is what is known as a “derivative” claim. Darr Const. Co. v. W.C.A.B. (Walker), 552 Pa. 400, 408, 715 A.2d 1075, 1079-80 (1998). This is a common law concept that exists because the consortium claim “emerges from the impast of one spouse’s physical injuries upon the other spouse’s marital privileges and amenities.” It is derivative because the consortium claim cannot exist without the original injury upon that spouse, and as a legal fiction the marital unit is recognized as one legal entity. Id. Hence, the consortium claim is derived from the uninjured spouse’s personal injury claim.
Because the claim is ‘derivative’ the law treats that claim differently for insurance and settlement purposes.
In the landmark case of Koenig v. Progressive Insurance Co., the Pennsylvania Supreme Court held that because the claim is derivative, the value of the uninjured spouse’s claim is to be included under the injured spouse’s policy limits.
Let me explain. Most auto insurance policies are set up so that if the insured person is a fault and injures one or more people, the insurance company will have certain ‘policy limits’ that apply to the injured individuals, and the incident as a whole. For instance, the at fault party might have policy limits of $300,000 per incident, and $150,000 per person. The policy limit is the maximum amount of coverage that the insurance company has to pay. If a judgment exceeds the policy limits, the at fault party will be personally responsible for payment.
In cases where liability is clear, and the injuries have an estimated value at or around the policy limits, the plaintiff(s) will offer to settle the case if the insurance company pays the policy limits.
Now, if husband and wife are injured by an at fault driver, and only the wife is seriously injured, the wife has a personal injury claim, and the husband has a loss of consortium claim. Assume that her injuries are estimated at $500,000. She may want to offer settling the claim for the policy limits of $300,000 to avoid the risks, time and resources involved in taking the case to trial.
Then, the insurance company is required to protect the interests of the at fault driver, and it will try to settle the husband’s loss of consortium claim along with the wife’s claim. Under the law, once the insurance company tenders the policy limits for the wife’s claim, it has no obligation to cover the loss of consortium claim. This is because of the Pennsylvania Supreme Court’s decision in Koenig v. Progressive Insurance Co., based on the history of loss of consortium claims, and the interpretation of the ‘per person’ language in the insurance contract. The insurer only has a duty to pay the policy limits on one person’s claim, i.e. the wife.
If the injured spouse does settle, be sure that the settlement agreement reflects whether or not the uninjured spouse intends to settle the loss of consortium claim.
The husband can still bring his claim to trial if he is unwilling to settle. It does not matter that his wife previously settled her claim.