When will insurance companies learn? There was a lesson taught today by my partner, Danny Feldman. He represented a client in an accident caused by a teenage driver. The client had lost value on his vehicle, and his back was hurt. However, instead of complaining about his back and going to the doctor, he took some advil and "toughed it out".
What did Farmers Insurance offer to settle the case? $1,000.00. $750 for lost value and $250 for the injury. Danny told the adjuster he would settle for $1,500.00. The adjuster said, "No". Danny filed suit, and the attorney said $1,000.00 was all they would pay.
What was the result? They tried the case in District Court today. The defendant teenager had to miss school to come to court. Farmers had to pay its attorney to defend the case. Verdict? $4,555.00.
So, it was Farmers which refused to pay a reasonable amount on a case. It was Farmers which caused another case to "clog" the court system. It was Farmers which required its insured to appear in court. And, it’s Farmers which ended up paying approximately $7,500.00 (including its own attorney fees) on a case that could have been resolved for $1,500.00. Of course, knowing Farmers, they will appeal the verdict and spend more money. What causes premiums to go up? Verdicts or decisions to spend more than a case is worth?
This is not an unusual situation. State Farm, Allstate, Progressive, Geico, Nationwide, and other insurance companies regularly employ these tactics. Until the juries and Judges start awarding a reasonable amount in their verdicts, things won’t change. Keep this in mind the next time you read or hear something in the media about trial attorneys and tort reform. In this situation, as in many, it’s the insurance company and not the trial lawyer which is creating a tort mess.