Why Can’t You Talk About Insurance
in a Personal Injury Trial?

In a personal injury trial, it is generally forbidden to inform the jury that the defendant has an insurance policy that would cover any, if not all damages a jury chooses to include in its verdict. Mentioning the defendant’s insurance policy in any way usually ends in a mistrial. In North Carolina Rules of Evidence, Rule 411 states, “Evidence that a person was or was not insured against liability is not admissible upon the issue whether he acted negligently or otherwise wrongfully.”

Liability Insurance and Juror Biases

There is a lot of confusion about Rule 411 since the NC state law requires all cars to have liability insurance. So, why then, can you not talk about insurance in a trial? The idea behind this rule is to ensure that people with insurance and people without insurance are treated equally. It is an attempt to deter biases that may influence jurors one way or the other. The problem is, the jurors not knowing has proven to be problematic as well.

How the Presence of Liability Insurance Can Sway the Jury

In theory, if the jurors know the defendant’s insurance company is on the hook to pay damages, and not the defendant themselves, they would be more likely to award higher damages.

If the plaintiff is seeking $150,000 in damages, for instance, the jury is more likely to think “that’s what insurance is for” or “it’s a drop in the bucket for an insurance company.” This biased mentality, even subconsciously, could sway the jury to award the victim more money regardless of other evidence.

How Not Having Liability Insurance Can Sway the Jury

On the other hand, the jurors are more likely to award lower damages to the victim if an individual is on the hook. If the jury knows the defendant does not have an applicable insurance policy, they may hesitate to award 100% damages to the victim, or even much less.

In this case, if the plaintiff is seeking $150,000 in damages, the jury is more likely to think “that’s a big punishment for the defendant” or “that is so much money for someone to pay out-of-pocket”. Thus, the opposite result may occur; the jury may be swayed to award the victim less money regardless of other evidence.

How the Omission of Liability Insurance Can Sway the Jury

Here lies the conundrum with Rule 411. The omission of the presence or absence of liability insurance still may sway the jury. Jurors may be less familiar or informed than judges are on how insurance policies lurk in the background of personal injury cases. Therefore, jurors can sometimes make damaging assumptions that result in unfair conclusions. For instance, the jurors may assume the defendant does not have insurance and, as we learned, may likely award less to the plaintiff.  Other jurors may assume insurance has already paid some or all of the plaintiff’s damages.  The truth is, in North Carolina, the insurance company does not have to pay anything to the injured person until the case is entirely resolved.  That can mean years in cases where the insurance company has dragged the case out or appealed a verdict.

For this reason, the insurance companies play on the ignorance of the jury.  The large insurance company “hides behind” their insured and attempts to have the jury [ incorrectly] believe that any verdict is coming out of the pocket of their insured. Most insurance companies will often refuse to settle and request a jury. To understand this strategy more fully, you need to understand the role of the insurance company in litigation.

Insurance Company’s Role in Personal Injury Litigation

Insurance policies cannot be mentioned in court, but that does not mean insurance companies do not play a role. The defendant’s insurance company usually makes most of the decisions when a case is in litigation. The defendant’s insurance company will decide whether to settle, if so, by how much, or to take the case to a jury.

Also, keep in mind, the jury will be unaware the defendant’s lawyer is actually a lawyer provided by the insurance company. So, their skepticism combined with ignorance or incorrect assumptions regarding insurance coverage will usually work in the insurance company’s favor.

Is Being Forbidden to Talk About Insurance in Trial a Bad Thing?

Like most rules, NC Rule of Evidence 411 was put in place with good intentions. It is meant to prevent personal biases from swaying judgments in the courtroom. But removing one bias does not prevent another from taking its place. And withholding information can lead to harmful assumptions. Plaintiffs and their attorneys must be well-informed of how talking about liability insurance may affect a case to have the most successful outcome.

If you live near Asheville, North Carolina and need to discuss a possible Personal Injury Case, contact the personal injury attorneys at Fisher Stark, P.A. today for a free consultation. Our team knows how to play by the rules and win.