Casualty & LiabilityQuestion 90 of 215
California Insurance Code §11580 requires every liability policy issued or delivered in California to include a clause that:
a.Prohibits subrogation against the insured
b.Allows a judgment creditor to bring a direct action against the insurer after obtaining a final judgment against the insured
c.Limits attorney's fees to 10% of the recovery
d.Mandates a $1,000,000 minimum liability limit
Explanation
Section 11580(b)(2) requires every California liability policy to permit a third-party judgment creditor, after obtaining a final judgment against the insured judgment debtor and after the insured's insolvency or bankruptcy, to bring a DIRECT ACTION against the insurer up to the policy limits. This protects injured plaintiffs when the insured cannot pay personally.
Law Reference: Cal. Ins. Code §11580(b)(2)Practice all 215 questions free — no signup required.
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