SEPERATING THE REAL FROM THE REAL INSURANCE PROPAGANDA

It
seems like every other day a new article appears spouting off about how Bad
Faith
either needs to go away entirely or be restricted
via new legislation. This position is often advanced by the insurance industry as they collectively paint bad faith as a tool by which
greedy plaintiff attorneys take advantage of unsuspecting insurance carriers, which
in turn raises the cost of the insurance premium for your average
consumer.  As Susan Powder once
said, “Stop the Insanity!”  Shame on insurance carriers and their lobbyists
for making bad faith sound like it is a tool for nuisance litigation and
windfall lawsuits.  There are always people that will find ways to exploit
litigation in some manner, but for insurance companies to hedge their bets with this narrow argument is flat out
irresponsible.  

 

Insurance
carriers often argue that plaintiff attorney’s set up bad faith in order
to obtain and/or generate extra contractual damages from insurance
companies.  For example, Johnny Negligent buys an auto insurance policy from ACME insurance to protect him in the event he
injures another person as a result of his negligence in an automobile accident.
In this hypothetical he contracts with ACME Insurance for $25,000.00 bodily
injury limits and pays his premium for that
protection.  One day, Johnny Negligent rear-ends a vehicle when he
is texting his friend and crashes his vehicle into a car occupied by Jane who
is injured as a result.  Jane car is totaled and she is rushed by
helicopter with terrible injuries to a hospital where in a matter of days she incurs
$75,000.00 in medical bills not including any future
medical needs.  Aside from her PIP (Personal
Injury Protection) benefits that will pay for a
small portion of the medical bills, Jane can
collect a maximum of $25,000.00 against Jonny Negligent’s bodily injury
policy.  The $25,000.00 in coverage is clearly insufficient in light of
the injuries sustained by Jane and the bills incurred as a result.

 

Jane
hires an attorney to for her injury claim and they compile
the medical records and bills and subsequently demand that ACME pay out the
entire $25,000.00.  This claim is obviously
worth well in excess of the $25,000.00 and is clearly supported by the medical
records attached to the demand.  Attorney gives ACME insurance companies
several weeks to review the claim and demands that they tender the policy
limits.  ACME owes a fiduciary duty to Johnny Insured and must protect
their policyholder and look out for the best interest of such individual.
 They owe him a duty to act in good faith and pay this claim to protect
him and release him of the possibility of a lawsuit and a hefty judgment in
excess of the existing coverage.  ACME Insurance decides not to pay out
the policy limits.  Instead, ACME starts off by asking for an extension in
order to review the claim since the claims adjuster is out of town.  Jane
and her attorney agree to the extension and give them an additional two weeks. 
Two weeks later, the day this very demand expires, ACME calls the attorney’s
office and request another extension because they want a single medical record
that has no relation to the claim.  The medical record requested is from
eight years prior when Jane broke her ankle and was taken to the emergency
room.  It is now becoming clear that ACME is not handling this claim
correctly and not looking out for the best interest of Johnny Negligent. 
They are granted yet another extension and provided the additional medical
records that have little to no bearing on the value of this claim.  The
longer ACME keeps their money the more the corporate bottom line expands. 
This is Business 101.

 

Several weeks follow and the day the second extension and third
deadline comes to fruition, the claims adjuster makes a $5,000.00 offer on this
case.  Insulting to say the least for a claim that is clearly worth in
excess of the available $25,000.00 coverage.  After some back and forth
with Jane Injured’s attorney they refuse to tender the policy limits.  By
behaving in this manner, they are essentially not releasing Johnny Negligent
from liability of this accident.  Isn’t this why Johnny Negligent purchased
this policy, which provides bodily injury coverage?  Is it not the reason
Johnny Insured pays his monthly premium? 

 

By not tendering the available coverage, ACME has essentially
dared the attorney and Jane to come get their money by pursuing la judgment
through time consuming and expensive protracted litigation. 

 

Wait, the insurance companies are the ones that always tell us
that plaintiff attorneys are the culprits that clog up the court systems and
file frivolous law suits.  This is the concept that has been fed by the
media and big insurance to the public for years.  Corporate greed sees
numbers and numbers only.  The numbers will tell ACME that if they delay
claims and force attorneys to file lawsuits by making unreasonable offers that
a percentage of people will “settle” for the lower figure.  These very
“numbers” will tell the story that filing a lawsuit on a case like this and
taking it to trial will not only take lots of time but also a significant
amount of money that will never be available since there is only $25,000.00 of
benefits once you travel that long road.  ACME and every other major
insurance carrier play this game and they know it very well.  They are
also aware that only a handful of plaintiff’s attorneys ever see the light of a
courtroom.  They understand that some of those fancy commercials where you
see the attorney walking out of the courthouse have NEVER been to trial and
will settle for what is offered.  So why don’t all insurance companies and
adjuster do just that?  Bad faith.  Bad faith is a protection not
only for Johnny Negligent but also Jane Injured.

 

In this scenario Jane Injured sued Johnny Insured because ACME
did not do the right thing.  Two years later and after $40,000.00 spent by
Jane Injured’s attorney a jury trial takes place.  At the trial ACME
Insurance is nowhere to be seen or heard from.  Instead, Johnny Negligent is
being sued for his negligent driving and a jury awards a $425,000.00 judgment
in favor of Jane Insured.  ACME is on the hook for only $25,000.00 of that
and the other $400,000.00 is owed by Johnny Insured.  That is the
reality.  ACME knew what would be the outcome but also counted on the
numbers.  The numbers tell them that they can take this course of action
on many cases and rarely have someone go all the way.  Jane Injured
suffered very serious injuries and Johnny Negligent suffered a terrible
injustice.  Why should he be on the hook for this judgment?  Why did
ACME Insurance not protect their loyal policyholder by settling this claim two years
prior when provided with numerous opportunities?  Why did he faithfully
pay his premiums to ACME for twelve years and when he needed them they looked
the other way?  Is this fair or otherwise acceptable?  The answer is
a resounding NO!  This is why bad faith is not only enumerated in statute
but also rooted in common law.  You have the expectation, when you enter
into such agreements (like Johnny Negligent did with ACME), that the insurance
carrier will act in your best interest and protect you as opposed to thinking
of their corporate greed.  This is why bad faith is so important.  It
protects people when big insurance carriers do not act in a fair manner when
evaluating and paying claims timely.

 

One could only imagine if bad faith were to go away how
corporate greed and big insurance would benefit.  They would be free to do
as they pleased, when they pleased with no repercussions for their conduct.  As a Clearwater personal injury attorney, I
come across this very scenario or similar fact patterns weekly if not
daily.  We are often called upon by other
law firms to review the conduct of insurance carriers or adjusters in the
handling of a claim file.  What we see
often shocks us and of consumers only knew the truth bad faith would never go away.  Dolman Law Group is currently representing a
consumer injured in a motorcycle accident wherein there was only $10,000.00 in
bodily injury coverage.  Our client was
transported from the scene of the wreck to the trauma unit at a local hospital
where he stayed for over ten days.  The
insurance carrier was provided such information and instead of tendering the
$10,000.00 policy limits and retiring the personal exposure of their
policyholder; they asked for prior medical records.  Our client sustained a traumatic brain
injury.  At mediation, the very same
carrier offered over forty times the policy limits.  This is the essence of bad faith.  It is a tool that protects the consumer as it
punishes the insurance carrier for not adhering to the very services they
contracted with their policyholder to provide.

 

–      
Christian Myer, Esq.

 

Christian Myer, is a Pinellas County personal injury
attorney who limits his practice to first and third party insurance claims
related to automobile accidents, motorcycle accidents, catastrophic injuries,
traumatic brain injuries, insurance carrier bad faith and wrongful death.  For more information, please contact
Christian at: Christian@dolmanlaw.com
or contact Dolman Law Group at (727) 451-6900

It
seems like every other day a new article appears spouting off about how Bad
Faith either needs to go away entirely or be restricted
via new legislation. This position is often advanced by the insurance industry as they collectively paint bad faith as a tool by which
greedy plaintiff attorneys take advantage of unsuspecting insurance carriers, which
in turn raises the cost of the insurance premium for your average
consumer.

View Attorney Profile

Matthew A. Dolman, Esq.

Licensed since 2004

Member at firm Dolman Law Group

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Licensed since 2004

Member at firm Dolman Law Group

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