THE 10 SECRETS INSURANCE COMPANIES DON'T
WANT JURORS TO KNOW
At Huggins &
Maxwell, we have learned that people often ask the same questions when trying to figure out the process. These are the same
questions that insurance companies don't want answered.
1. Is the defendant going to have to pay a settlement or jury verdict out of his own
pocket? Our law firm has consistently been impressed by the citizenship and hard work of juries.
Often juries are torn between concern for injured people and a corresponding concern for how a large verdict will affect
the defendant and his or her family. The rules of evidence that govern a trial often exclude the introduction of the
fact that the defendant had liability insurance. Liability insurance is the insurance we all must carry in order to have
a driver's license. All drivers must carry a policy that provides between $25,000 and $50,000 in coverage, although many
drivers have insurance policies that provide between $100,000 and $300,000 in coverage. Despite this fact, the rules of evidence
have been interpreted very broadly so as to preclude any testimony or evidence that in any way may tell the jury about the
existence of liability coverage. Unfortunately, this exclusion often allows skillful insurance defense lawyers
to imply that the defendant will have to pay any judgment returned in the case out of their own pocket. Often
our clients try to resolve their cases on their own before becoming frustrated with delays and "low ball" offers
from the insurance company. Unfortunately, the rules of evidence also prevent us from presenting any evidence as to why
our client had to hire us. This allows skillful insurance defense lawyers to imply that our clients are "greedy, sue-happy"
people because they hired us. In reality, our clients just want to be treated fairly.
2. OK, so if there was insurance, why is it that the defendant was sued and not his insurance company? Again,
another good question. The defendant was the person who actually committed the action made on the basis of the Complaint
and therefore he or she has to be the named party to the lawsuit. In most cases, the only person who can be sued is the
actual driver who caused the accident. This creates an extremely strange situation. In most cases, the insurance
company controls virtually every aspect of the litigation. They decide when and how much is going to be paid to settle.
They choose the lawyer who will defend the case and they pay for that lawyer's bills. Often then, the person who is the
"defendant" in the case has very little involvement beyond having their deposition taken and going to trial. Under
this system, the person who paid for the insurance policy has little or no say in whether a case settles or has to go to
trial. It has been our experience that most individuals, victims and defendants, do not want to go through the rigors of
taking a case to trial. A wise attorney once said, "a lawsuit is like surgery...it should be a last resort." Our
office has a policy of making a good faith effort to settle a matter with the at-fault party's insurance carrier before taking
a case to trial. Yet because many large insurance companies have a nationwide policy of making "low ball" offers,
we too often find ourselves having to try a case against a defendant who probably would have preferred that the case settle
for a fair amount.
3. We all
know that many people have health insurance nowadays. Isn't it unfair that the plaintiff should recover for the medical
bills that were paid by health insurance? Again, a very good question. It is true that the plaintiff's
medical bills (and future medical bills) are an important part of most personal injury cases. However, in the vast majority
of cases, the plaintiff will have to pay back the health insurance carrier from the money awarded for damages in any jury
verdict. There is no double recovery. If you look closely at your health insurance contract under the clause
"subrogation rights," you will see the language that requires personal injury victims to pay back any money that
a jury awards if that health insurance company paid accident related expenses.4. Why didn't this case settle? There are lots of different
reasons why cases don't settle. In our opinion, the most common reason is that insurance companies nowadays simply don't
make fair offers to settle cases. While it is impossible to know what a jury will award, we do know that people are entitled
to certain types of damages after they are injured by someone else. It's hard to know what a jury will do in a
particular case. We have some general ideas and can make an educated guess as to what we think a jury might do with the
case, but trying to predict exactly what will happen is impossible. Ironically, it's this uncertainty that helps make cases
settle. In automobile accident cases we have found the insurance industry has three "red flags" that adjusters
are trained to look for in auto-injury claims:
- A delay
in treatment. Unfortunately many victims of an automobile accident wait several days or weeks before going to see
a doctor or before following up with a doctor. The reason for this is usually that they hoped the pain would go away on
its own without need of further care. Some injuries may take days; weeks or even months to manifest themselves. But skillful
insurance defense lawyers often use this fact to try and minimize the victim's claim: for example, "If he was really
hurt he would have gone to a doctor sooner."
property damage. Despite the insurance industries own studies that show drivers who are involved in small "fender
benders" get hurt 14% of the time, insurance companies know that their lawyers can hold up pictures of the nominal
property damage and use those photos to question the validity of the victim's injuries.
Why can't the two parties agree on a reasonable settlement? Years ago, insurance companies used
to evaluate cases using experienced insurance adjusters who would meet with the person who was injured, evaluate medical
records and bills, and then try to get the case settled for a fair amount. Today, most insurance companies use computer
software to determine the value of auto and truck accident cases. Essentially, those insurance companies have
data entry people input information from medical records, lost wages, the severity of the accident, and where the accident
occurred. The taxpayer ID number of your personal injury lawyer which determines if your accident lawyer has a history of
taking cases to verdict or whether they simply settle all of their cases. The computer then specifically looks to your injuries
as described in your medical records. One of the most important questions is whether the injuries are permanent. The computer
also gives higher values for objective injuries measured by diagnostic testing than soft tissue injuries. The
problem with computer-based case evaluation is that the programs can be skewed to spit out incredibly low settlement offers.
As they say, garbage-in, garbage-out. There is no computer program that can ascertain the value of a person's pain and
suffering or how an injury really impacted a person's life. How much is it worth to not be able to pick up your newborn
baby without extreme pain? There is no way a computer can answer this question.
- Pre-existing conditions. Countless medical studies have shown that certain health conditions or
injuries prior to a motor vehicle collision or other incident can make a victim much more susceptible to re-injury. Yet
skillful insurance defense lawyers use that prior injury as a smoke screen and try to blame all of the victim's problems
and pain complaints on the old injury. If a case involves one of these factors, even if liability is clear, there is a good
chance it will end up in Court.
6. OK, if Insurance Companies are so unreasonable, why not use those low offers to show the
world how unreasonable they are? The law correctly wants parties to lawsuits to try and settle
their disputes without the need of trials. For this reason, there is an evidentiary rule that generally makes settlement
offers and negotiations not admissible. The rationale is that if settlement offers were admissible in court, then they would
look bad in front of the jury. Such a result could then discourage parties from entering meaningful settlement negotiations
for fear it could hurt their case if it went to trial.
7. An Independent Medical Examiner said that the plaintiff wasn't hurt that bad. Shouldn't that doctor decide
what really happened? Under the Rules of Civil Procedure, the insurance company’s lawyers
can hire a doctor to perform an examination of the plaintiff, review medical records and tests, and then testify at trial.
In theory, this sounds like a fair and reasonable method for an insurance company to ensure that they are only paying valid
claims. Unfortunately, many insurance companies have a policy of using "hired gun" doctors who are paid
far beyond their normal charges, who see the patient for only a few minutes and find some reason to say that the person
was not badly hurt or that the accident did not cause the problem. Not all doctors will tailor their opinions to what the
insurance company wants to hear. But remember this: This is one of the most profitable types of work for doctors to do, especially
in this era of managed care. There are doctors who will slant their opinions towards the insurance company. Sadly,
the insurance companies know that certain doctors can be counted on to testify in their favor, time and time again. The doctors,
knowing they can count on repeat business from the insurance companies, make sure that the people writing their paychecks
are kept happy. If the juries could find out that some doctors make hundreds of thousands of dollars from insurance
companies, they would be much more reluctant to consider the doctors to be "independent." It would be far more
appropriate to call these doctors "insurance medical examiners."
8. Why is a trial necessary when there is a police report? At
some point in their lives, most people either have been in a collision or know someone who has been in a collision. These
folks know that after their own accident there was an accident report completed by the investigating officer. In fact, these
accident reports even go so far as to show who the investigating officer believes was at fault for the collision. Further,
there is information about how much damage was done to the vehicles and whether anyone was hurt in the collision. Unfortunately,
accident reports and incident reports are often excluded from evidence because the officer or person who completes the report
is usually doing so with information he or she has received from other people. This means these reports contain a lot of
"hearsay." Although it is a complicated topic, most hearsay is excluded by operation of the Rules of Evidence.
9. If the Defendant loses, does he pay for the costs associated with bringing the case
to trial? No. The insurance company usually pays for the defendant's attorneys and for the cost
of defending the lawsuit. The defendant's lawyer usually is paid directly by the insurance company. The expenses associated
with defending the case including hiring doctors and experts, are usually paid for by the insurance company. However, even
if the plaintiff wins the case, he or she must pay for his or her own attorney and the costs associated with bringing the
case to trial. These costs include deposition costs, costs of deposing the doctors, investigators, and exhibits. Even in
a small case, these expenses and fees can amount to thousands of dollars. These costs must be paid out of any verdict returned
by the jury.
10. Will a jury verdict
cause the cost of insurance to rise? While this is what the insurance companies would love people
to believe, nothing could be further from the truth. Even with natural disasters like Hurricane Katrina, insurance companies
are enjoying record profits. Don't take our word for it, simply go to Google or Yahoo and type in RECORD INSURANCE COMPANY
PROFITS. Those profits are measured in billions and not millions of dollars. When was the last time you saw an office
park or a golf tournament that is named after a personal injury victim or a law firm? Never. This rarified financial
world is reserved for the biggest, most profitable corporations in the world...the insurance companies. We all pay the price
so that these companies can profit. Yet the only reason they exist is to pay the honest claims they most often deny.
Clearly their first loyalty is to their stockholders and not the insured. Is that fair?
HOW AUTO INSURANCE COMPANIES SETTLE CLAIMS
CNN investigative reporters recently exposed
damning evidence against major insurance companies, such as State Farm and Allstate, which are saving billions of dollars
by underpaying auto-accident victims. The money these insurance companies are wrongfully denying car accident victims should
be going toward their medical bills and lost wages. However, new strategies adopted by insurance companies have them
making take-it-or-leave-it payout offers that in many cases don’t even cover a fraction of the victims’ expenses.
If your life is devastated when another car or truck comes out
of nowhere and broadsides your car, severely injuring you and changing your daily routines forever and causing you to incur
hundreds of thousands of dollars in medical bills, lost profits and lost opportunities, you would expect the insurance company
of the driver who hit you to pay those bills, right?
Roxanne Martinez was hit by an SUV on the passenger side of her car, she was severely injured. Her medical bills quickly
accumulated and she thought Allstate, the insurer of the driver who hit her, would pay for her injuries. Three years later
after incurring massive doctors bills and a list of medical problems, Roxanne was still fighting Allstate. The company finally
offered her $15,000, a sum that did not cover her expenses, much less her pain, lost wages, or the emotional anguish of not
knowing whether or not she would be able to afford her treatment.
tactic is part of a strategy insurance companies are using to save themselves from paying billions of dollars in honest
claims. CNN’s year-and-a-half investigation into the insurance industry found that if you are injured in a minor accident,
major insurance companies will likely challenge your claim, drag you into court, and take years before making you an offer.
This offer is often significantly less than your claim is worth.
insiders say this results in 80% to 90% of injured victims capitulating and accepting what the insurance company offers
instead of fighting for what is right.
Why would an insurance
company, especially one that you trust and have given significant amounts of money to over the years to take care
of you in the event you’re injured, act with such reckless disregard toward your personal well-being? The answer is
simple: Insurance companies answer to stockholders. They take from the poor and give to the rich. If they pay
you less money for your injuries, even if you need the money to cover necessary medical bills, lost wages, and rehabilitation,
they make their stockholders a lot of money and that is the bottom line.
According to a Nevada insurance law professor, accident victims are getting hurt further by being dragged into
court by insurance companies. Other policyholders aren’t seeing any benefit, such as reduced premiums, when Allstate
or State Farm takes someone who needs money for their injuries to court. This practice isn’t saving the consumer
money at all. In fact, the only real beneficiary of keeping money from the people who need it are the insurance companies
themselves. One law professor has stated, “To continue this kind of program is, in my view, institutionalized bad
faith.” These insurance companies seem to believe their money is better spent dragging someone hurt who needs
insurance money for their injuries through court instead of helping them pay their bills.
Both Allstate and State Farm would not discuss the investigation’s results with CNN. Jim Mathis, a former
insurance company insider, told CNN, “As long as the public allows this to occur, insurance companies will get richer,
and people will not get a fair and reasonable settlement. Period.”
The math behind the insurance companies’ strategy is simple: Take $1,000 off of 1 million claims and you’ve
essentially made $1 billion. Do this with every claim over a number of years and you’ve made billions of dollars.
Insurance companies achieve this cost cutting through a process known
as the “Three Ds:” Deny the claim. Delay the claim. Defend their denial of the claim.
By forcing take-it-or-leave-it offers years after the actual accident
occurred, battles have already been fought, bills have added up, and people are afraid that they won’t get any money
for their claims, insurance companies hope to essentially force an injured victim to accept whatever it is they’re
offering. This tactic preys on the fear of a car accident victim who wonders if there will ever be any justice in a system
that seems to be a money machine for the big insurance company at the expense of the little guy. Some people lose hope altogether
and throw their hands up. That is exactly what the insurance company wants.
One trial court judge told CNN that many insurance company lawyers have confided in him that they want to settle
many of these minor impact cases, but the insurance companies won’t allow them to. The insurance companies would rather
fight every claim, even though that means not giving their paying customers the money they need to heal and get back to
A lawyer for Allstate said that the company’s
strategy was to drive lawyers who represent victims out of the insurance industry. The company tried to accomplish this by
making the act of fighting a claim “so expensive and so time consuming that lawyers would start refusing to
See the CNN expose on insurance companies, and how they unfairly deny
honest accident claims.