Most of us are good citizens and buy liability insurance to cover us in case we cause an accident. Some people buy minimum liability coverage and some people buy more.
When you purchase this insurance, you are not only doing so to comply with the law, but also to protect you and your assets in the event that you cause a car, motorcycle or other motor vehicle accident.
Now let’s say you have an accident that is your fault; you report the accident to your insurer; you think your insurance company will cover you under your insurance right? WRONG!
If you read the fine print on your insurance policy, you’ll notice a lot of language that most non-lawyers wouldn’t understand. The gist of the plain English language is that by accepting the insurance policy, you agree to cooperate with the insurance company if they decide to litigate, and the insurance company is the one who decides whether a case is settled, not you.
Insurance companies are all about making tons of money and paying as little as possible. Since the advent of legally required insurance coverage (Proposition 213 in California), the insurance companies have become very arrogant because their coffers are full of your money.
Rather than settle meritorious claims, they force claims to go to court in an effort to prevent personal injury attorneys from getting fair compensation for their clients. They know full well that personal injury lawyers don’t have as much money to sue as they do, so their trick is to starve the personal injury lawyers and ultimately make it harder for people injured in accidents to get recovery. Ultimately, it is the consumer and accident victims who are injured, while the large company makes more profit at your expense.
Even people who cause accidents and have good liability insurance to cover the claim fall victim to the insurance companies.
The insurance companies are experts in deception. With your money, insurance companies contribute money to politicians and run media advertisements that blame the personal injury lawyers for making insurance rates so high. What they are not saying is that the backlog in court is due to the insurance companies not handling the claims as they should in the first place.
Now let’s go back to the example where you caused an accident. If the insurance company is unreasonable and refuses to handle a case at or below the policy limits, you will be dragged through the legal system. You may have to respond to discovery, appear for statements, and even take time off to appear in court. This is a long and arduous process that you never thought you would have to deal with when purchasing liability insurance. Surprise!
If you lose in the process, the insurance company will pay the verdict in most cases, but guess what; YOU WILL HAVE JUDGMENT AGAINST YOU ON YOUR CREDIT REPORT, AND ON THE COURT FILE! Thanks to your insurance company, your credit has just been canceled through no fault of your own.
Is this fair? I submit to you that it is not so. You paid for insurance; the insurance company could have arranged the matter for you within your policy limits; instead, they decided to litigate in an effort to minimize what they have to pay out so that their profits remain high. They did this without any regard for your credit report, or having your name listed in the public record as a judgment against you.
Many insurance companies have in-house lawyers; some use outside attorneys. These lawyers are supposed to do what is in your best interest towards you. The reality is that they do what is in the best interest of the insurance company. This is the ultimate conflict of interest. Ethically, the attorney the insurance company uses to represent you has a duty to you, not the insurance company. The reality is that the lawyer gets his marching orders from the insurance companies.
A worst-case example is the recent Hurricane Katrina disaster. Have you read about all the poor people getting screwed for not being covered by their insurance company for insurance they paid for?
It’s time for America and consumers to wake up and smell the roses. It’s not the trial attorneys who are the problem; it’s a big business that wants to sew the little guy so they can make more profit at your expense. Some have made it a political issue. I’ve even heard President Bush talk about tort reform, and the trial attorneys blame the country’s health problems.
Every time you reform a tort here, remember one thing; you’re about to get screwed! Whenever your right to recover damages is violated in a court of law, you are the victim, while the big corporations bring in the mula!
By Norman Gregory Fernandez, Esq., © 2007