Displaying items by tag: Insurance

Years ago, an advocacy group called The American Association For Justice (AAJ), reviewed thousands of court documents, complaints, and materials from litigation, and records from the SEC and FBI to determine just who was the worst insurance company in America. Their report shed some very disturbing truths about an industry that runs phenomenal ad campaigns to convince the public they are on your side.

 

What the advocacy group discovered is that three of the worst ranked auto insurers had developed certain profit strategies at the direction of consulting company McKinsey & Co.—and it proved to be very profitable. Allstate, State Farm, and Farmers all hired McKinsey and were given strategies that put profits over policyholders. While the report has not been updated, we can tell you, from our perspective, not much has changed. We hear about and experience the same ruthless tactics.

 

ALLSTATE

 

As part of the McKinsey strategy, Allstate employees were directed to force injured victims to accept low ball offers otherwise the party would face the “boxing glove” strategy. This is where the company beats up on the injured party with deny and delay tactics until you accept the low offer. In fact, if a lawsuit was filed, the Allstate representative was directed to do everything possible to fight the case and pay nothing. For this reason, it became even more difficult for Allstate policy holders to get legal counsel willing to represent them in court. Their strategy was successful. Prior to McKinsey’s “help,” Allstate paid out claims at nearly 63 percent of premium income but, within 10 years of the new strategy, paid only 47 percent. At the same time, it doubled its profits. It had so much extra profit that the company began buying back $15 billion of its own stock.

 

In a separate investigation on homeowners’ claims, AAJ reported that Allstate agents were told by supervisors to lie and blame house fires on arson so they could avoid paying on the claim. It was Allstate whistleblowers who were able to help investigators determine the McKinsey strategy formulated for Allstate. While Allstate is routinely sued for unfair tactics, not much has changed. CEO Thomas Wilson has made clear, “our obligation is to earn a return for our shareholders.” Mr. Wilson is paid approximately 17 million a year in salary to make sure shareholders are happy even at the expense of policyholders. 

STATE FARM

 

Not too far behind Allstate on the naughty list is State Farm. They also hired McKinsey & Co. to create a strategy that reduced pay outs to policyholders and would increase profits for shareholders. As it turns out, McKinsey is pretty good at what it does. They created an equally lucrative and offensive strategy for State Farm. In fact, the AAJ noted that State Farm has become notorious for its deny and delay tactics.

 

While the AAJ report highlighted more of State Farm’s homeowners disasters, it is reminiscent of what we see when handling auto claims. One particularly egregious example of “avoid paying at all cost” was an investigation into the handling of claims following the Northridge earthquake. State Farm employees testified that company officials forged signatures on earthquake waivers to avoid paying claims. When the company was sued, they withheld this evidence. This is precisely the reason we always ask for proof of PIP rejection by the policy holder. In the State of Washington, if the insurance company can’t produce your signature rejecting Personal Injury Protection, you are deemed to have it—a very important benefit in a personal injury case.

 

FARMERS

 

While we agree with AAJ’s evaluation of unpleasant insurance tactics, the order of the list might need to be changed. Currently, we find Farmers to be a tie for #1 worst company as voted by our staff and lawyers. It’s hard to keep the blood pressure down with some of the tactics used in the initial phone calls. However, we generally push our way to a new adjuster or move to file suit fairly quickly on these claims. Life is too short to deal with deny and delay games.

 

One of our favorite examples from the AAJ’s report was the case of Ethel Adams, a 60 year old woman who was involved in a multi-vehicle accident that left her in a coma for 9 days. She was eventually confined to a wheelchair. Farmers response to her claim was that the at-fault driver had a moment of “road rage” so his intentional behavior could not be an “accident” under the policy. Therefore, there was no insurance coverage for her injuries. Farmers received severe negative attention from policyholders on this story but, eventually, it was a threat from the Washington State Insurance Commissioner to take legal action against Farmers that made them change their tune. Wouldn’t it be nice if all injured parties had the weight of the Insurance Commissioner on their case?

 

AREN’T THEY JUST TRYING TO KEEP RATES LOW?

 

The storyline most often told by insurance companies is that, “if people make claims, your premiums will go up.” First, you have insurance to help in times of loss and injury. Getting help when you need it is the reason you pay those very calculated premiums. And, make no mistake, those calculations leave insurance companies with plenty of reserves on hand in times of emergency. Those reserves also make shareholders a tremendous profit.

 

According to the Insurance Information Institute, the total assets for the US insurance industry is nearly 10 trillion dollars. For frame of reference, that is about half of the United States GDP. Let’s just say that the insurance industry is in no way suffering for profits or in need of raising your rates $200 so they can make a profit. Do not fall for the guilt trip that getting paid for your injuries somehow increases your neighbor’s rate. That is the choice of the profit-driven insurance machine.

 

THE TAKE-AWAY

 

If you have one of these companies, it doesn’t mean you need to switch. It just means that you may or may not deal with problems listed by the AAJ. We would like our clients or potential clients to be aware that certain companies come with baggage. Their business philosophies will impact your coverage as an insured and as an injured party. If you are already injured, we can’t undo the companies involved. However, if you want peace of mind that you won’t be exposed to an excess judgment if you hurt someone or be stuck with medical bills if an uninsured person hurts you, try to discuss these issues with your insurance broker. If you want our input on how companies are as far as personal injury cases, we are happy to elaborate. Feel free to call anytime.

 

We hope you have a safe and healthy New Year.

Published in Witt Law Group Blog

Which insurance company and policy amount is best for you?

 

Do not choose the cheapest. While it may be tempting to save a buck, auto insurance is one policy that is likely to get used. And, if you have teen drivers in the house, your odds increase even more. If you choose a small policy or a company that is known for denying claims, the rest of your life might be turned upside down.

  

Uninsured or underinsured drivers

 

Since the State of Washington allows drivers to have a minimal policy of $25,000, many people incorrectly assume that the minimal policy will be enough in an accident. If you only tap another driver, that might be the case. In the case of a soft tissue injury to an otherwise healthy person, you might also be okay with a $25,000 policy. However, if the person suffers a concussion, lacerations, or any broken bones, there is no way that a $25,000 policy will be enough. A non-overnight visit to the Emergency Department is billed between $3500 to $10,000 depending on the imaging and the level that the hospital codes the visit. If the injured person is admitted to the hospital, the medical totals will immediately exceed $25,000 and that won’t include lost income, pain and suffering, and other damages.

 

If you choose to carry a $25,000 policy, be aware that the injured party can sue you for additional money. In many cases, the injured party will need to sue you to avoid their own bankruptcy due to medical bills and lost wages. And, if you have any assets, you will be in jeopardy of losing those assets.

  

What if you are hit by someone with a low policy who does not own a home or have any other assets?

 

The best way to protect yourself is to carry a high Uninsured/Underinsured policy as well as a Personal Injury Protection (PIP) policy. In the State of Washington, you automatically have PIP unless you signed to decline the coverage. If you have a soft tissue case with a lot of medical care, your injuries may not warrant a lawsuit yet you need more than $25,000 for adequate compensation. In the case where you have $10,000 PIP and also a $25,000 Underinsured Motorist policy, these back up policies can be used to reach the equivalent of $60,000 in care and compensation. A $60,000 soft tissue case is highly unlikely but, in the case of some unusual complications due to your injuries, you would have reasonable coverage to cover damages.

  

What if I have a policy with $100,000/$300,000 coverage but I own my home and have good income, am I still at risk?

 

While the odds of an accident occurring where the medical care requires more than $100,000 is lower than a small soft tissue case, we have had quite a few this year. In those cases, the at-fault driver is at risk of personal financial loss to cover the additional expenses. If you are concerned about losing your assets or income, it would be smart to talk to your insurance carrier about an umbrella policy.

  

What if I am hit by someone without insurance?

 

This is the worst. You have damage to your car and injuries to your body but you’re also paying for someone else’s negligence. Hopefully, you have great health insurance, PIP, Uninsured Motorist coverage and your auto policy is with a company that has a good reputation. Many will deny or delay claims for so long that you eventually give up trying to get help. The adjusters get bonuses for this so there is incentive to convince you to stop seeking care or compensation. If this happens to you, try contacting an attorney to help you with a bad faith insurance claim.

  

Be aware that nearly 1 in 5 drivers in Washington do not have insurance. So, you are playing Roulette every time you drive. That doesn’t account for those negligent drivers who cause serious injuries and only carry the lowest required coverage of $25,000. With a looming economic impact due to covid shutdowns, be prepared for those numbers to increase. Unfortunately, it will be up to you to make sure you are not at financial risk due to someone else’s negligence.

 

If you have any questions about this blog or are in need of a free consultation, please contact our office. We work evenings and weekends so don't hesitate for peace of mind. 360-792-1000

Published in Witt Law Group Blog

Learn the big D’s of insurance tricks and why Witt Law Group gives them an F!

It is not unusual to have clients walk through the door who tried handling their own personal injury case. They gave it a good try, took a few bruises, and realized that they want nothing to do with this kind of battle. 

If you’re still wondering whether to throw in the towel on self-representation, here are some insurance tactics you should consider. Are you ready to deal with these issues on a regular basis? We like to call the adjusters’ top moves the “Big D’s”—deceptive dialogue, distract, delay, dispute, distorted defense, and discounted offer.

#1 Deceptive Dialogue—

Do you have the sweetest Grandmother ever? Well, wait until you hear from your first insurance adjuster after an accident. You’d think they are just about ready to bring you a home made meal and deliver you to your next doctor appointment…their doctor, of course. Being nice is wonderful but be aware that this conversation is being recorded. First, everything you say will later be used to spin the case against you. Insurance companies make money by NOT paying claims and that includes yours. They also know (from studies they have conducted) that, if they are extremely friendly on those first few calls, you are much less likely to hire an attorney. Second, they know victims without lawyers settle claims for significantly less.

#2 Distract

You will be required to provide ridiculous amounts of information. Much of it will be irrelevant (your lawyer would tell them to pound sand). The process is meant to frustrate you and delay the process. They will tell you their file isn’t complete so they can’t make an offer. When you produce this random information, they will eventually spin it as the reason they would like to offer you more but just can’t. After so many months of waiting and digging up random paperwork, you’ll be ready to take whatever they offer.

#3 Delay

This tactic comes in many forms. First, it will be similar to distracting. They will claim they just don’t have all of your medical records. Then, they don’t have all of the bills. Next, they need more information from the other side. Awww….so sorry about the wait. Later in the case, they will claim you need to see one of their doctors. If you’re lucky enough to be offered a settlement, they’ll put the wrong name on the check, the wrong amount, or perhaps send it to the wrong address. Darn…sorry about the wait (but thanks for letting us rack up a bit more interest on that money we’re holding). Finally, if they don’t offer you a settlement and you must go to trial, they will refuse to work out any settlement until right before trial. The longer they hold onto your money, the better for the insurance company profits.

#4 Dispute

This is a game you can’t win. If you took your doctors advice and popped the ibuprofen and tried to rest for a week or two, they’ll claim you had a “gap in treatment” that is unreasonable. Clearly, you must not have been hurt. If you go right to treatment and work diligently to get better, they’ll claim you “over treated” and your medical care was unnecessary, therefore they aren’t paying for it (this can happen even with your own PIP). Remember those early phone conversations that were so sweet and concerned? You’ll notice a change of tone now.

#5 Distorted Defense

This is a subset of the “delay” tactic. The insurance company will claim that the police report is wrong. All along, everyone understood the accident was not your fault. Now, the insurance company no longer follows the police report. Most frustrating, the insurance company doesn’t have to be justified in it’s position, it can just take this hostile position. If you don’t want to go to trial, you might be out of luck.

#6 Discounted Offer

You’re nearing the end of the painful process. Unfortunately, the end might happen to coincide with the end of the year. This is when the insurance companies prey on your “holiday” vulnerabilities. You need a check to pay for gifts and they are happy to throw you a low ball and “get in the mail asap.” Don’t assume the check will actually get to you during the holidays. Refer to #3. However, they will lock down low settlement offers during this time when most people are desperate. This treatment isn’t just for people representing themselves. Adjusters know that attorneys have to present all offers to clients so they throw out lower offers during this time to everyone. The benefit of legal representation is that your attorney can discuss the realities of this tactic and whether it is better for you, long term, to pass on the discounted offer.

For obvious reasons, we give most insurance companies’ defense tactics an “F” when it comes to truly helping an injured person. Typically, these tactics come before making sure the accident victim is being treated fairly and justly. The insurance companies don’t make a profit if they can’t keep settlements low. It doesn’t matter if a low settlement is unjustified in your particular case—it’s justified in the name of profits.

If you are unsure whether to hire an attorney, contact our office for a free consultation so you can educate yourself about the specific challenges related to your case. Every case is unique and your representation should make sense for you. Our attorneys are available 24/7 to take your call and we can travel to you in the event your injuries limit your mobility. You can reach us in Gig Harbor at 253-312-3838 or Bremerton at 360-792-1000. You may also CLICK HERE to fill out our online contact form.  We are here to help at any stage of your case.

Published in Witt Law Group Blog