Q: What is a personal injury action?
A: A personal injury action is an action to recover monetary compensation for harm caused by the negligent or wrongful act of another. A personal injury action allows the victim of the negligence or wrongful act to be heard about the harm caused to him or her. There are various types of personal injury actions. There are personal injury actions stemming from auto accidents. There are personal injury actions stemming from unsafe practices in a construction or work site. There are personal injury actions stemming from allowing a known and unsafe condition to exist.
Q: Who benefits from Tort Reform?
A: In my opinion, the insurance companies are the main beneficiaries from Tort Reform. By limiting a victim’s right to recover, the insurance company is able to avoid paying money from its coffers. This allows the insurance companies to profit from the premiums without having to pay out money for civil wrongs committed by their policy holders. Insurance companies and their related financial companies create organizations in an effort to lobby the public against personal injury actions. Insurance companies also lobby legislators or lawmakers into enacting laws that limit or destroy a victim’s right to recover.
Q: Why do some cases go to trial and others settle?
A: In order for a case to settle, the insurance company must often be convinced that their insured (the Defendant) will be found negligent at trial. They must also be convinced that they will be forced to pay an amount of money by the jury’s verdict. So the insurance company will hedge or try to reduce their potential exposure (the amount they have to compensate the victim) by settling. By settling, they also avoid the expense of paying the attorneys to defend the action.
Q: Can an insurance company act in bad faith towards their own insured (the Policy Holder)?
A: When you enter into an agreement to buy liability insurance, the insurance company has certain duties to protect their policy holder, the insured. Some insurance companies are more reasonable than others. Some insurance companies act in good faith to protect their insured (the Policy Holder). These more reasonable insurance companies try to not allow their insured to have to pay out of their own pocket in the event there is a verdict in excess of a insurance policy limit. For instance, defendant A enters into a liability insurance motor vehicle policy, with a limit of $100,000.00. Defendant A is involved in a motor vehicle accident due to negligently operating the vehicle. And due to this accident, the victim (the Plaintiff) suffers an injury that exceeds the limit of $100,000.00. Some insurance companies will protect their insured by acting in good faith to settle the case within the policy limit or to offer the policy limit once they have determined that their insured may face a jury verdict that will exceed the policy limit. However, there are some insurance companies who act in bad faith by failing to protect their insured’s interest and place the insurance company’s interest of saving money over that of their insured’s interest. When an insurance company acts in bad faith as to their duties and obligations to their policy holder, the insured or policy holder has a legal action for bad faith dealing against the insurance company.
Juries throughout the United States have held notable insurance companies in bad faith with their verdicts and have compensated the policy holder millions of dollars as a result of the insurance company putting its own interest above that of its insured or policy holder.
Q: What controls insurance companies’ decisions?
A: A report released by the Consumer Federation of America (CFA) has found that computerized claims’ systems used by most of the nation’s largest insurance companies can be easily adjusted to make broad-scale “lowball” claims’ payments to injured consumers that are less than what they should receive under their insurance policies. The primary author of the report is an expert on insurance claims’ practices and was a longtime insurance executive.
“This report is a wake-up call for consumers and regulators who are not aware of the many ways that computer claims’ software can be manipulated to produce unjustifiably low injury payments to consumers and tens of millions of dollars in illegitimate ‘savings’ for insurers,” said Mark Romano, CFA’s Claims Project Director. Romano was the “subject matter expert” on the Colossus injury claims’ evaluation system at Allstate and Encompass insurance companies for almost ten years. Colossus, which is the dominant claims’ system in the marketplace, is sold by Computer Sciences Corporation (CSC).
“When CSC and its competitors talk publicly about computer-based claims’ systems, they stress that the programs allow insurers to more consistently evaluate bodily injury claims,” said Romano. “Consistency is a legitimate goal, but these companies tell a different story behind closed doors. Software marketing representatives acknowledge that the real reason insurance companies are willing to invest millions in these systems is that they can dial down claims’ payments to thousands of consumers at a time, regardless of whether these payouts are fair.”