South Carolina Personal Injury Law Blog

State Farm Accused of Racketeering

In a lawsuit filed last week, a group of Mississippi homeowners accused State Farm Fire & Casualty Co. of a “pattern of racketeering” in the handling of claims related to Hurricane Katrina.  Attorneys for the homeowners claim that the insurer manipulated engineering reports in order to deny policyholder claims.  The use of the racketeering statute is a new tactic for attorneys pursuing Katrina-related claims against insurance companies. 

Source:  "Racketeering Alleged in Katrina Suit" by Michael Kunzelman, published in the Houston Chronicle.

Retiree Class Action Suit Against Caterpillar Continues

A U.S. District Court judge ruled last week that a class action lawsuit filed by retirees or their surviving spouses can proceed against heavy equipment manufacturer Caterpillar. In the lawsuit, plaintiffs allege that the company agreed to provide free lifetime health benefits but has since charged a portion of the premiums to the plaintiffs. Caterpillar had filed for dismissal of the case on jurisdictional and procedural grounds.

Source:  "Retirees' Suit Against Caterpillar Can Proceed" published at Reuters.

Doctors Face 50 Years in Prison for Surgery Scam

Three California doctors were arrested for recruiting patients to undergo needless surgeries in order to defraud insurance companies. Prosecutors claim the doctors performed over 1,000 procedures on 940 patients in exchange for cash or cosmetic surgery while billing insurance companies an estimated $30 million. The doctors face 47 felony counts for conspiracy, insurance fraud and other charges and could face 50 year in prison if convicted. 

Source:  "3 Doctors Held in Health Insurance Scam" by Christine Hanley, published in the LA Times.

Rental Reimbursement vs. Loss of Use

A question that is frequently asked by people who have been in automobile accidents is "What is the difference between rental and loss of use?"  Jonathan G. Stein of the California Personal Injury and Insurance Blog answered this question by using the following illustration:

Okay, so your car is damaged in a car accident. You can't drive it and it is in the shop. You think you are entitled to a rental car (because you read this blog, you know you are entitled to a rental car). But what about loss of use? What the heck do you get?

This is pretty easy. If you were not at fault, the other person's insurance is going to either pay for a rental car or loss of use. In other words, you cannot collect both. However, if you do not rent a car immediately, you can collect loss of use for the days you do not rent a car.

For example, your accident is on day 1; on days 2 through 5, you do not rent a car; on day 6, you rent a car until day 10.  You would get 4 days of loss of use (days 2, 3, 4, and 5) and 5 days of rental (days 6, 7, 8, 9, and 10). Rental is basically what it costs to rent a similar car to what you had. If you had a luxury car, that is what you rent. If you had a Ford Focus, then you rent a compact car.

Loss of use is generally calculated at $20 per day. For some cars, it may be more. It is usually not less. But, the $20 per day number is a good number to start with.

In the above example, you get $80 plus your actual of out pocket rental expense. They will not pay for gas or the extra insurance (which most people do not need anyway), but they will pay for tax and fees.

Source:  "Car Damaged in Accident? - Rental vs. Loss of Use" by David Brannen, published at his Injury Law Blog.

Automobile Insurance Company Not Allowed to Intervene in Family Court Action

Can an insurance company interject itself into a Family Court action filed to determine whether or not someone has a valid common law marriage?  The South Carolina Supreme Court answered this question by clearly stating "no" in an opinion filed yesterday, In Re Cooper.

By way of background, GEICO brought a declaratory judgment action in Circuit Court against Mr. Cooper to determine the parties’ rights pursuant to an automobile insurance policy issued to Ms. Goethe.  Specifically, Mr. Cooper claimed he was entitled to stack underinsured motorist coverage provided by Ms. Goethe's policy on the grounds that he was a Class I insured. GEICO denied Mr. Cooper’s claim, because it found that Mr. Cooper was not a Class I insured because he was neither the spouse nor resident relative of Ms. Goethe.

After GEICO denied Mr. Cooper’s claim to stack coverage, he filed an action in Family Court seeking an order validating his common law marriage to Ms. Goethe since 1991.  GEICO petitioned the Family Court to permit it to join an action pursuant to Rule 19 of the South Carolina Rules of Civil Procedure (SCRCP), or to intervene pursuant to Rule 24, SCRCP.  As grounds supporting its motion, GEICO alleged that the Family Court’s decision on the parties’ common law marriage would impact GEICO’s ability to protect its interests under the insurance policy issued to Ms. Goethe.  The Family Court denied the motion, and GEICO® appealed. 

The Supreme Court affirmed, holding that, although GEICO may be affected by the outcome of the Family Court action, its interest is insufficient to meet the requirements for joinder pursuant to Rule 19(a)(2)(i), SCRCP.  Further, it found that the Family Court did not err in denying GEICO’s petition to intervene in Cooper’s Family Court action. The subject matter of the Family Court action is the validity of a common law marriage, which does not involve a determination of insurance benefits. Accordingly, GEICO did not have standing to intervene in the Family Court action because it did not have an interest sufficiently related to the subject matter of the action.

You can read the full text of In Re Cooper by clicking HERE.

Insurance Industry Reform Legislation Introduced in Congress

The “Insurance Industry Competition Act” has been introduced in both the U.S. House of Representatives and in the Senate.  Did you know that for more than 6 decades, the insurance industry has operated beyond the reach of Federal anti-trust laws?  This critical legislation would repeal the industry’s anti-trust exemption and give the Department of Justice and the Federal Trade Commission the authority to hold insurance companies accountable for their behavior.

When Americans pay for their insurance every month, they should have every right to believe that, if tragedy strikes, their insurance carrier will be there for them.  After all, that is why American families and businesses purchase and rely on insurance for their homes, cars, property, or businesses.  When bad things happen, they should be protected.

In the wake of Hurricane Katrina, many Gulf Coast residents who lost everything are facing insurance companies, many of which have refused to fulfill their commitments.  These families played by the rules, and insurance companies are shirking their responsibilities owed to them.  In fact, some of the area’s biggest home insurers – Allstate and State Farm – are pulling out of the Gulf States, leaving these families with nothing, even as their corporate profits surpass $5 billion as previously discussed on this blog.

Many homeowners are fighting back through the justice system to force these insurance companies to honor their contracts.  However, the insurance companies have greedily continued to push for legislation limiting the rights of consumers to hold them accountable in the courts –- the only place where Americans can face powerful interests on a level playing field.

Imagine your family loses everything, and your insurance companies will not live up to their end of the bargain.  Consider letting your Representative and Senators know that families are more important the insurance industry profits by telling them to "Protect People, Not Greedy Insurance Companies!"  You can access a directory to quckly and easily find your Representative and/or Senators by clicking HERE.

Source:  The People Over Profits Grassroots Action Center, sponsored by the American Association for Justice.

Attorney's Fees in Personal Injury Cases

The attorneys at Allen, Flatt, Ballidis & Leslie recently published an article analyzing the concept of attorney's fees in personal injury cases.  It is thought provoking and well worth reading:

Sometimes we attorneys are much maligned by the public. Auto accident lawyer, ambulance chaser, are coined phrases. We can all laugh at ourselves. Here is a good joke I heard a long time ago. What is the difference between a lawyer and a catfish? One is a bottom dwelling scum sucker, the other a fish.

The thought that we have to pay money to lawyers to assert our rights, and the fees they receive just does not give us a sense of justice. After all, in California lawyer fees have to be paid by the party hiring the lawyer, and only in breach of contract actions are the fees recoverable. So the injured victims already start out with less money than they deserve.

Many clients try to handle their claims themselves. Certainly this is possible in small claims court, but not in Superior Court actions. So we have to hire an attorney at great expense. Therefore it is important to get the best attorney you can, one that can maximize the amount you will receive, so that the lawyer fees get paid also.

But let's think of a simple solution. Why not penalize insurance companies that do not treat you fairly. Make them pay all your bills up front, and if they dispute the bills and you win, they have to pay the attorney fees for getting them paid. Why not make them pay for the attorney fees if you have to file a suit and win, or the fees if they mishandle your case. Blue Cross would not deny coverage to so many people if that were true, as reported in recent weeks, because the attorney fees would act as a penalty.

So why don't we enact this legislation? The reason is the fear of reprisal. Insurance companies hire their own attorneys and want to collect attorney fees if you lose. It is different for you than them. YOU ARE THE VICTIM. They are not. Victims should always be protected from additional damages. The Insurance company should always act fairly. They can afford to defend actions, you cannot. Why not make them pay for your lawyer if they lose. If you win more than your offer of settlement, they can pony up all your costs and attorney fees.

Source:  "Auto Accident Lawyers and Their Fees, How Do We Like It?" published at the Southern California Injury Law Blog.

What Insurance Companies "Really" Want

Insurance companies spend millions of dollars every year trying to convince the public that they are the good guys.  They refer to themselves as having "good hands", being "on your side", and acting "like a good neighbor."  Hogwash!

Ask an injury victim or an attorney who has dealt with these companies and you will find out the truth.  Insurance companies care only about their bottom line and nothing else!  It is literally sickening to see some of the shenanigans that these companies pull trying to avoid making reasonable payment on legitimate injury cases.

Frank Pasternak has compiled a following list of things that insurance companies really want.  I couldnt' have said it better myself, and I wholeheartedly agree with his list.  Without further adieu, Mr. Pasternak (and I) believe that insurance companies want:

• Premiums not claims
• To deter valid lawsuits
• People to hate lawyers so they never get one
• You to feel guilt for making legitimate claims
• You to think you're "not the kind of person who files a lawsuit"
• Juries to think a person who files a suit is dishonest
• Jurors minds made up before evidence is heard
• Your rights minimized or removed
• Their rights maximized and preserved
• People to feel juries give away money
• Verdicts for damages to be less then what is fair
• Caps on damages to minimize your justice
• Judges who will avoid holding them accountable

Source:  Post by Frank Pasternak at his Wisconsin Personal Injury Lawyers Blog.

Insurance Companies Employ "Deny, Delay, Defend" Strategy Toward Automobile Accident Victims

CNN recently conducted an 18 month investigation into the insurance claims practices of America's largest insurers. Not surprisingly, it found what trial lawyers have known for years, the insurance companies put their own profits over the rights of the injured people.  CNN says that "profit ... is the reason companies decided to play hardball in small accidents."

A former Allstate and State Farm employee says that the insurance companies' strategy relies on the three D's -- denying a claim, delaying settlement of the claim, and defending against the claim in court.  This person says, "The profits are good, and as long as the community, the public allows this to occur, the insurance companies will get richer and people ... will not get a fair and reasonable settlement."

You can read the transcript from Anderson Cooper's segment on 360 Degrees about this topic by clicking HERE or the article, "Auto insurers play hardball in minor-crash claims" by Drew Griffin and Kathleen Johnston by clicking HERE.

Source:  "Delay, Deny, Defend" by William G. Pintas, published at his Chicago Injury Law Blog and "CNN Exposes On Insurance Companies" by Frank Pasternak, published at the Wisconsin Personal Injury Lawyers Blog.

Automobile Insurance (Third Party Coverage)

A few days ago, I posted about first party insurance coverage.  Today, I am pleased to present the following article from Jonathan G. Stein, publisher of the California Personal Injury and Insurance Blog, about about third party insurance coverage:

A few days ago, I posted about automobile insurance. I gave just a brief introduction to first party coverages, in other words, coverages where your insurance company pays you. We discussed the promise that you buy in first party coverages.

Today, its third party coverages - coverages where your insurance company pays someone else. This is generally called liability coverage. If you are buying liability coverage, you are buying a promise from the insurance company that they will pay for damage you cause as a result of using your car. Want some examples? You hit a parked car. The insurance company will pay for damage to the parked car. You rear end a car while driving. Your insurance company will pay for damage to the parked car, as well as any injuries the people in the car sustained.

This is simple, right? Well, it could be if California would adopt a single limit liability policy. That argument will be saved for another day. In California, when you buy liability insurance, they will throw out numbers like 15/30, 25/50, 250/500. What does that mean?

The first number (15, 25,250) is the most, in thousands, that the insurance company will pay to one person injured in an accident. The second number (30,50,500) is the most, in thousands, the insurance company will pay for everyone injured in an accident. So, a 15/30 policy? The insurance company will pay no more than $15,000 per person  with a maximum of $30,000 per accident. This is the minimum in California.

Then they give you one more number. It could be 5, 25, 50, 100. This is the most, in thousands, that they will pay in property damage. So 25 means they will pay up to $25,000 for all damage you cause to someone else's property.

Whats right for you? That is almost impossible to determine. (See my prior post on how every person has different requirements.) However, in future posts, we will discuss some generalties on what may be right in different situations.

Source:  "Automobile Liability Insurance: A Primer" by Jonathan G. Stein, published at his California Personal Injury and Insurance Blog.