I often receive phone calls about liability insurance carriers not wanting to pay for all of the debt associated with a motor vehicle that has been totaled.  According to Arkansas’s jury instructions, the liability insurance carrier must only pay the difference in fair market value immediately before and immediately after the wreck.  See AMI 2210.  Fair market value is defined as “the price the [motor vehicle] would bring on the open market in a sale between a seller who is willing to sell and a buyer who is willing and able to buy after a reasonable opportunity for negotiations.”  See AMI 2221.  The amount the vehicle owner owes is irrelevant to the market value of the vehicle.

If your vehicle is totaled, you owe $10,000 on the vehicle, and the fair market value of the vehicle is $8,000, then you are upside down $2,000.  Stated differently, there is a gap of $2,000.  This is where good gap insurance coverage comes in handy.  A well written gap insurance policy will cover the $2,000 you are upside down on the vehicle.  As with most types of insurance coverage, there are good policies and bad policies.  When purchasing gap insurance, you must read the fine print to determine whether you are paying for a policy that covers the outstanding debt on the vehicle or only the fair market value.  As discussed in the first paragraph, the liability insurance carrier is required to pay the fair market value of the vehicle so gap insurance that only covers the fair market value is of limited benefit to the consumer.  For more information on how gap insurance works and the type of policy you need, check out the following link from the Arkansas Attorney General’s Office: https://arkansasag.gov/programs/consumer-protection/my-vehicle/gap-insurance

A contingency fee is a fee charged by an attorney to a client contingent upon the outcome of the matter.  Contingent fees in personal injury and wrongful death cases are allowed in Arkansas if the agreement is in writing and states the method for computing the fee, including the percentage of the fee and how costs will be handled.  See Arkansas Rules of Professional Conduct 1.5(c).

McMath Woods has served injured Arkansans since 1953.  Over the past sixty-three years, we’ve handled many personal injury and wrongful death cases on a contingent basis.  If you or a loved one has been injured and you need to hire an Arkansas lawyer on a contingency fee, please feel free to give us a call at McMath Woods.  

The U.S. Consumer Product Safety Commission (CPSC) announced today that Aqua-Leisure Industries, Inc., of Avon, Mass., has agreed to pay a civil penalty of $650,000. The penalty agreement has been accepted provisionally by a 4-0 vote of the Commission.

The settlement resolves CPSC staff allegations that Aqua-Leisure knowingly failed to report a defect involving its inflatable baby boats to CPSC immediately, as required by federal law. The leg strap in the seat of baby boats manufactured from August 2002 to July 2008 can tear, causing children to unexpectedly fall into or under the water, posing a risk of drowning.

In recognition of Fire Prevention Week, the U.S. Consumer Product Safety Commission (CPSC) and the U.S. Fire Administration (USFA) are providing new statistics on fires in American homes and urging consumers to install smoke alarms in their homes and check to make sure all smoke alarms are working properly. It is also vitally important to develop and practice a family fire escape plan.

In a report released today, CPSC estimates there was an average of 366,700 unintentional residential fires, 2,310 deaths, 12,550 injuries and more than $7 billion in property damage each year attended by fire service between 2008 and 2010.