Your Insurance Company Calls The Shots On Claims Against You

Your Insurance Company Calls The Shots On Claims Against You

One of our firm’s clients was in the news recently because he got a rude shock from his insurance company, Geico. He found out the hard way how insurance companies really operate.

The story begins in August. At that time, Ricky Melendez was driving to work in the morning on U.S. 19. As he passed through the Tampa Road intersection, a stolen car full of teenagers ran a red light at more than 100 mph and smashed into his car. He came close to being killed and is still recovering from the serious injuries he suffered.

Three of the four teenagers in the stolen car were killed. The story was all over the news in Pinellas County.

Imagine our client’s shock and surprise when he found out a few weeks ago that Geico was paying his insurance policy limits to the families of the three dead car thieves. That’s
right. Apparently, because Geico was worried that someway, somehow, our client might be just the tiniest bit at fault, it paid out every dime of his insurance limits. Geico did this before the parents of the juvenile car thieves even asked for the money.

This decision by Geico was outrageous, but it was not unprecedented. People who have auto insurance find out quickly that they have little to no control over what their insurance company does when they face a claim. Insurance policies are written so that the insurance company has complete control over whether, when, and how to defend a claim - or settle it. An insurance company can basically decide to dispose of a claim in any way it likes. Its decisions are final and it has no duty to consider input from its policyholder.

Insurance companies don’t just pay sometimes when they shouldn’t. That’s just one side of the coin. Even more common is the situation where an insurance company puts their policyholders at risk by failing to pay when it should.

In a bid to save a few dollars, an insurance company might lowball a legitimate claim and force it into a courtroom. Then, when the jury’s verdict blows up in the insurance company’s face, there’s no guarantee the insurance company will pay for all the damages.

This sounds crazy, but it really happens. An insurance company who writes a $50,000 policy might gamble and try to get a verdict for less. Then, when the trial goes badly and the verdict comes back at $200,000, it pays the $50,000 limit and abandons its policyholder. The insurer refuses to pay the $150,000 difference, leaving its own customer stuck with the bill.

The only recourse for the customer at this point is a “bad faith” claims against their own insurance company. Those are long, difficult, and uncertain, but the only alternative is to get stuck holding the bag for a bad decision.

The truth is that the deck is stacked against the policyholder when it comes to making decisions about claims. It’s not all good hands and good neighbors out there in the real world. Insurance customers should pay close attention to what their insurance companies do with their claims, and get independent legal help when they have concerns about what’s going on.

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