The Court exists as the gatekeeper of what evidence the jury sees, hears, and considers in an attempt to render a just and fair verdict. On the news or in social media we hear about, “If the jury only saw that…or knew this, the outcome would’ve been different.” Sometimes this suspicion is true. Prohibiting even the motion of liability insurance is one such example. Whether the defendant is a person or a company, the jury is almost never allowed to know the defendant has liability insurance that is paying for its defense, all the attorneys and experts, and while also paying what the jury determines is reasonable compensation in a civil case.
Universally in the American legal system, evidence that a person was or was not insured against liability is not admissible to prove whether the person acted negligently or otherwise wrongfully. However, the court may admit this evidence for another purpose, such as proving a witness's bias or prejudice, or proving agency, ownership, or control. Admitting this evidence incorrectly can result in a mistrial, necessitating a “do-over,” so the courts attempt to avoid such evidence at any cost.
Consider the situation with a driver who wasn’t paying attention and struck your car from behind. You suffered injuries to your neck that ultimately required surgery. The defendant driver’s insurer, Geico, argues the surgery was due to a preexisting medical condition based on a doctor’s record of you having neck pain five years before the collision. Geico further argues your car didn’t sustain enough damage to cause a serious injury. The insurance company tells your attorney that juries buy these arguments all the time and won’t want to award a big verdict against a nice schoolteacher who they’ll presume doesn’t have the money to pay it.
Although you have an attorney, file a car accident lawsuit, and pursue the case through litigation with significant costs and time, Gecko is dead set on taking this case to trial. Our law firm consists of trial lawyers so we’re ready and willing. However, when the case gets in front of the jury, it’s just Jane Doe, plaintiff versus John Smith, defendant, or Jane Doe versus Mom and Pop Restaurant. The insurance company providing $1 million in coverage is not on the case caption, is not mentioned in court, is not on any of the records, and is never known by the jury. In fact, the jury is never informed by anyone that the defendant is insured. Lastly, the court most often instructs the jury that you’re not entitled to consider whether anyone has insurance.
Imagine yourself in this situation, you have amassed medical bills of $100,000, have future medical needs amounting to $200,000, have lost income from work absence of $25,000, and you are asking the jury to find a) negligence against the defendant, b) the defendant caused your damages, and c) an amount of damages the defendant is required to pay. In this scenario, the jury shall decide on an award the schoolteacher must pay, without knowing the teacher has the insurance to pay the award. Notably, many auto insurers will agree to pay above the purchased insurance once the insurer decides to take the case to trial. Unfortunately, the jury doesn’t know any of this. The jury is sympathetic toward the teacher, concerned about bankrupting the teacher and unfairly punishing the teacher by making the person pay for more than he or she can afford.
If the jurors only knew there was insurance, they wouldn’t have these reservations and could decide on the appropriate dollar figure to compensate the plaintiff. Contrastingly, the jury presumes frequently that the plaintiff has health insurance which has paid and will pay medical bills, so the jury doesn’t have the same misgivings about finding against the plaintiff or compensating the injured party less that they should.
While the Court has good intentions to keep evidence of liability insurance away from the jury, the result is currently more prejudicial than positive. Nevada, like most states, requires that drivers operate insured motor vehicles. Drivers in this state must carry automobile liability insurance policies with no less than $25,000 for bodily injury or death of one person in any one accident, $50,000 for bodily injury or death of two or more persons on any one accident, and $20,000 for injury to or destruction of property of others in any one accident. Jurors often begin a case with the assumption there is car insurance, but, after failing to hear any mention of insurance during the trial and being instructed by the court not to consider whether anyone has insurance, the jurors in the end can be confused and needlessly restrictive with their verdicts.
Evidence of liability insurance is now the evidence jurors need to hear. Skilled attorneys must always take this hot issue into consideration and strategize accordingly to best represent their clients.