Jun
17
Written by:
Joe Parrish
Friday, June 17, 2011 7:40 AM
The Insurance industry is trying to scare the public,
once again, in order to make bigger profits at the expense of Florida
Citizens. Currently, Florida recognizes
a cause of action against insurance companies when the company does not abide
by their duty to protect the insured under the language of the policy. For years the insurance industry has made
billions of dollars by denying, delaying and defending meritorious claims. They will first deny the claim persistently
in hopes that the insured will give up on their claim. Then the insurance company will delay the
claim in hopes that the insured will tire of the negotiations and accept
pennies on the dollar. If that doesn’t
work, they will defend the claim and force the insured into lengthy and costly
litigation in order that they may hold on to the money they owe and collect
interest for as long as possible.
One tool an attorney has to fight against the
insurance company’s abuse of the system is the leverage of bad faith litigation
against the insurance company for not abiding by their fiduciary duty to the
insured under the policy. The insurance
company is trying to take away this righteous tool by once again scaring the
public with the threat of higher insurance rates and tales of frivolous cases
that should be thwarted through tort reform.
This is a falsity in an attempt to increase the profits of Florida’s
insurance industry at the expense of Florida citizens.
In order to properly explain the process, I will go through
a hypothetical scenario.
HYPOTHETICAL SCENARIO:
Bob entered into a contract of auto insurance with BF
Insurance Company in which he paid premiums for 7 years. Within the contract of insurance, he paid BF
to cover him for up to $100,000 if he was injured in an auto accident, which
was caused by someone who did not have the proper coverage (known as uninsured/underinsured
motorist coverage or UM coverage). Unfortunately,
in the seventh year of coverage, Bob was in an accident caused by an uninsured
drunk driver. As a result of the
accident, Bob was airlifted from the scene and his spinal column was severed at
the C4-C5 level rendering him paralyzed from the neck down for the rest of his
life. After the accident, Bob hires The
Parrish Law Firm to pursue a claim for his injuries. Because the drunk driver was uninsured, The
Parrish Law Firm sends a request to BF insurance company to pay the policy
limits of the UM policy that Bob had with BF Insurance. Of course, it is common sense that $100,000
dollars would not come close to covering the tragic costs of Bob’s accident,
but as is customary with BF insurance company, they deny and delay the claim
and do not timely submit payment of the policy limits to Bob. The Parrish Law Firm serves a Civil Remedies
Notice with the proper Florida governmental entity claiming that BF has not
properly abided by their fiduciary duty to Bob and then takes the case to trial. Bob is awarded a $13 million dollar verdict due
to the horrific turn his life has taken.
As the law stands today, Bob can now sue BF Insurance for dealing in bad
faith and not settling the claim for policy limits whey they should and could
have settled.
Today, lobbyists for the insurance industry have convinced
Senator Thrasher to propose Bill 0624, which guts the current laws allowing for
this type of bad faith litigation (you can see
the proposed bill here: http://www.flsenate.gov/Session/Bill/2011/0624/BillText/Filed/PDF). If such a bill was passed, there
would be no motivation for an insurance company to ever pay policy limits to a
citizen insured in Florida. That means
you could pay your premiums up to a policy limit for many years and then when
you need the insurance company to abide by the contract of insurance, there
will be no negative ramifications for the insurance company to always deny,
delay and short-change the insured. This
country was founded with the amazing ability of checks and balances for our
citizens. We, as citizens, cannot allow
the insurance industry to use its influential political dollars to further
trample on those they are supposed to protect without any checks and balances. What can we do? Call your senator and let them know you
oppose the bill and if nothing else let your community know that they should
not vote for the legislation if it makes the ballot.