Georgia Personal Injury Law Blog : Atlanta Georgia Injury Lawyer & Attorney : Jason R. Schultz Law Firm : Wrongful Death, Malpractice, Car Accidents : Georgia

I have been fighting insurance companies for almost 20 years and one thing is for sure: honesty and integrity work both ways.  If you choose to lie on an application for automobile, life, health or disability insurance, you will probably find yourself without coverage when you need it most.  In an effort to reduce premiums, some people grossly misrepresent the facts.

With car insurance, a frequent omission involves the failure to disclose all of the potential drivers who are living in the household and might have access to the car.  If that person (usually a child) has permission and causes a serious accident involving injuries, the insurance company may deny coverage and the parent may potentially be PERSONALLY liable under a doctrine known as "family purpose".

Over the years, I have seen and heard stories of families left financially devastated when someone bought medical or life insurance and failed to disclose relevant past medical history.  I can guarantee that after you are gone, the insurance company will investigate the truthfulness of your application and if it finds that you made material misrepresentations, your widowed spouse will be going to some lawyer and the lawyer will have to explain that he/she cannot help you and the children.

Be careful out there and for goodness sake, BE HONEST.

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      Exposed below are a number of myths about the insurance claims business that I have heard over the years:

1. If you write the insurance company a “reasonable” letter asking for a “reasonable” amount of money, you will get a “reasonable” settlement proposal. After all, insurance companies are generally “reasonable”, right?
2. If you are involved in a car wreck and the insurance company asks for a recorded statement, you must give them a recorded statement or they will not settle with you. (One insurer had the audacity to say as much in writing, threatening a potential client that if a statement was not given, coverage would not be provided - which is an outright lie) (BEWARE: most insurance policies do, however, require their own insured to give a recorded statement)
3. If you are involved in a car wreck and the insurance company asks for you to sign an authorization to obtain your medical records, you must sign it or they will not settle with you.
4. Your own insurance company has your best interests at heart and will help you with your personal injury claim or property damage claim. (Many insurers have been sued successfully for bad faith for failing to pay, or even advise, their own policyholders of diminished value claims and for systematically using inferior repair parts)
5. You need to get three estimates for the insurance company if your car is wrecked and you want to get it repaired
6. All lawyers who claim to “handle” accident cases have the same ability and experience to handle your case
7. The insurance company for the person who caused the wreck and injured you is obligated to pay your medical bills and lost wages as they come due. (FACT: 40% of the rear end car wrecks tried to a jury in Georgia result in a verdict for the defendant and the injured claimant receives nothing.)
8. Just because there has been an accident and it was not your fault, there must be some insurance company that will pay your bills, lost wages and injuries.
9. If a lawyer refers you to a doctor or chiropractor, that is a good idea.
10. Juries in Georgia are generous
11. It is a good idea to take out an advance on your case from any number of predatory lending companies to help you with bills when you are out of work due to your injuries (I can’t tell you all the horror stories I have heard, but here is one: A woman “borrows” $3,000.00 and 2 years later when her lawyer is trying to get her case resolved before trial, the vultures wanted $12,000.00 due to the compounded monthly interest charged, plus fees - - - Outrageous!).

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The good hands people have played fast and loose with too many people too long and the Florida Insurance Commissioner has held their feet to the fire.  As of May 14, 2008, Allstate agents in Florida can’t sell new auto insurance policies or homeowners coverage. State regulators have put them out of business in an effort to strong-arm information from the company in an ongoing battle over high rates and business practices. With the muscle of a favorable court ruling behind him, Florida Insurance Commissioner Kevin McCarty expects Allstate will soon allow his office free access to its records and thus end the shutdown. With a signed affidavit from company officers promising unconditional compliance, McCarty said Wednesday he’d lift the then hours-old order against Allstate doing any new business in the state.

“The timeline is in their hands,” McCarty said. “Clearly they have indicated a willingness to provide further documents. It’s unfortunate that it takes a succession of court cases . . . to get their attention.”  For now McCarty is enforcing the suspension he first issued in January to wrest documents and testimony from the company in an ongoing investigation of rates, policy cancellations and business practices.  The sanction does not affect Allstate’s existing 2 million customers. Allstate officials said they’re moving to fix things.

Way to go Florida!  It is about time Allstate was forced to be the "good hands" people they claim to be.  We are all looking forward to the little dirty secrets that will be uncovered IF they actually produce all the information and documents that have been compelled to be produced by the Florida courts.  

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The controversial Senate Bill 276 which passed late in the 2008 legislative session has now been signed into law by Gov. Sonny Perdue.  For months now, the Georgia insurance commissioner, John Oxendine, has been against the bill because of his worries relating to the part of SB 276 that will allow insurance companies to change their rates without his approval.  Oxendine's office has given prior approval to car insurance companies for over 15 years, which means companies must set their rates with the approval of his office. But Senate Bill 276 gets rid of the approval process altogether.

SB 276 began its life in the 2007 session as an effort by Sen. Cecil Staton (R-Macon) to "stack" so-called uninsured motorist policies.  Before SB 276, if the at fault driver had $25,000 in liability coverage and the victim only had $25,000 in uninsured/underinsured motorist (UM) coverage, the victim would not get the benefit of his UM coverage.  With stacking, assuming that the case was worth $50,000, the victim would now be able to recover $25,000 from the at fault driver and $25,000 from his/her own UM insurance carrier.

The new law will now allow those coverages to stack but only if the consumer chooses  the stacking option.  The consumer can choose the coverage that they currently have where the coverage doesn't stack, or the consumer could choose expanded coverage where they will stack to give that additional protection, or the third option is not to have UM coverage at all.

According to Bill Clark, Chief Lobbyist for the Georgia Trial Lawyers Association, "The states that have adopted a free market system for insurance ratings have seen significant reductions in premiums for their citizens."   He said consumers will now have the benefit of a free market system. He also said that the more than 250 car insurance companies that sell in Georgia must now compete with each other to win a driver's business.  In the final analysis, we will all have to
wait and see who was correct about whether the insurance rates will go up across the board or not.

In my opinion, I think that those who (wisely) choose the stacking option will pay more for UM coverage, but they are getting more coverage than before.  UM coverage has always been a relative bargain for consumers and not such a great deal for insurers.  The sad reality is that insurance companies and their agents will likely not fully explain these options to  consumers (despite their promises to Gov. Perdue) who will be left in the dark about how important UM coverage is, especially UM coverage that stacks on top of the at fault driver's liability coverage.

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Georgia needs to pass an insurance law similar to the one recently passed in the State of Washington requiring insurers to pay triple damages and attorney's fees if they are found to have acted in "bad faith".  Unfortunately, the bad faith law in Georgia has very little deterrent value as it only provides wronged policyholders 25% of the actual damages plus attorney's fees.  That is a minor penalty to pay especially with smaller claims.

Across the country, insurance companies, trial lawyers and legislators are closely watching a November referendum in the state of Washington that could change how insurers are required to treat their customers.  Insurance companies are using the referendum process to try to strike down the new law in Washington state.

Insurance giants like Allstate, State Farm, Safeco and Farmers have poured more than $8 million into the referendum battle. Their goal is to convince voters to reject a law passed earlier this year that could force insurers to pay up to triple damages and lawyer fees if they fail to pay a legitimate claim and then lose in court. A "yes" vote on the referendum allows the law to go into effect while a "no" vote strikes the law down.

The campaign to woo voters has already begun. The insurance industry-backed group is already running television commercials depicting greedy lawyers planning to sue and warning consumers that the law will lead to frivolous lawsuits and higher rates.

It's not a new tactic by the insurance companies. Earlier this year, CNN exposed a controversial insurance industry strategy that began in the mid-1990s.

Former insiders say insurance companies began limiting or denying legitimate claims in minor injury cases and reaped billions in profits as a result. The strategy has tied up courts across the country -- over minor claims, judges told CNN -- for months and even years. How did they do it?

"It really came down to basically three elements: a position of delay, a position of denying a claim and ultimately defending that claim that you're denied," said Jim Mathis, a former insurance industry insider.

Supporters of the law say it forces insurance companies to pay legitimate claims in a timely and fair fashion and frees the courts from relatively minor cases that clog the system for months and even years.  If companies act in good faith, they are not going to have a problem and there will be no penalty.  On the other hand, if they are found to have acted in bad faith with their own customers, then they will have to pay a reasonable penalty for their wrongdoing.  This provides a reasonable deterrent to the insurance companies to do the right thing, especially when it comes to their own policyholders to whom they owe a fiduciary duty of good faith.

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