What Plaintiff Lawyers Need to Know About Insurance Claims

If you intend on representing clients in Orange County personal injury and wrongful death claims, you need to fully understand the insurance issues that surround these claims. This is a complicated area of the law so spend the necessary time to learn the details.

Many California based insurance companies and their claims adjusters think they live in a world where the rules don’t apply to them. They seem to try and do business differently than the rest of us. As such, it’s important that you understand how to deal with this fact and, the various insurance related claims and coverage issues that often times occur.

While there are many insurance litigation issues that can come up during your handling of an Orange County personal injury claim, the following focuses on several of the most common issues. I hope you find this information and suggested strategies helpful.

Determine what insurance policies will provide coverage

Prior to taking on a case or sometimes, at the very beginning of a new case, a good lawyer must do extensive home work. You must determine what happened to the client, how it happened, when it happened and who are the parties and their insurance companies. It is key to determine what type and amount of insurance is available to cover the injury and loss. For reasons set forth below, the earlier you find this out the better. Start by doing these things.

Your client’s uninsured and underinsured motorist coverage must be ascertained. Medical payment and health insurance benefits must also be determined.

As for the responsible party who caused your client’s injury, you must find out how much liability insurance he has and whether or not he also has an umbrella policy. If he was in the scope and course of employment during the collision, his employer’s liability policy might provide additional coverage.

Because I’ve had insurance claims adjusters misrepresent to me the amount of available insurance, before making any recommendations or settlement decisions, I always have them send over a declaration and certified copy of the policy and declaration page. In most cases, I also file a lawsuit and require the carrier to disclose all insurance policies and limits in response to interrogatories.

When dealing with insurance companies, make them play by the rules of evidence, civil code and code of civil procedure. In my experience they consistently try to avoid doing so and also spend a great amount of time and resources trying to get away with whatever they can to lower the value of your client’s case. Hold them accountable and don’t play this game. Stay in control of the case.

In California there are various legal theories you can use to keep the insurance companies honest. In first party claims (against your client’s own carrier), insurance carriers are held to a high fiduciary standard and can be sued for bad faith if they breach their duty owed to their insured who also happens to be your client. Reminding the insurance carriers of this law can go a long ways to being treated fairly in the claims and litigation process. The insurance company’s failure act in good faith can result in a ‘bad-faith’ lawsuit costing the carrier millions of dollars.

Don’t be afraid to litigate and try the case

I’ve found that lawyers who embrace the litigation and trial process are the lawyers who get maximum value when settling or trying their client’s personal injury and wrongful death cases. Using the jury system allows you to force the insurance company to play by the same rules the rest of us are required to follow. It also allows for an Orange County Superior Court judge to monitor the conduct of all parties.

When dealing with low policy limits, an additional area for concern is often times referred to as “burning limits” wherein settlement, mediation or trial can result in years of litigation and high expenses. You need to be aware of this so that these expenses don’t eliminate the chances of insufficient funds being available at the end of the case to make your client whole. The earlier you find out all the facts and policy limits the better.

When it comes to trying a case, although your Orange County jury will not be allowed to know about whether or not the defendant has liability insurance, you can use the jury to render a fair verdict based upon the law and facts. In almost every single case that I’ve tried, the jury’s verdict was substantially more than the last offer to settle made by the other side’s insurance company. Start thinking about the jury as your friend. If you haven’t tried many cases, I invite you to join our 1,800 member Google Plus Community where we share and exchange trial tips, links, articles and more. Simply visit TrialLawyerTips.com

When insurance companies tell you to jump, rather than responding with “how high”, demand that they follow the law and take control of the situation. You don’t work for them and so the last company you should ever take orders from is the insurance company. I’ve noticed that too many lawyers do whatever the carriers ask or tell them to do and in my opinion, the ultimate low settlement numbers reflect this fact. Unfortunately, most clients never find out what has really happened.

Cases that you take to mediation

Sometimes cases go to mediation. Often the parties will stipulate to a non-binding mediation to see if settlement is possible. I only agree to this if the other side is serious about resolving the claim. Otherwise, for the reasons referenced in this post, I simply advise my clients to let me take the case to jury trial. Because the other side knows that I’m serious about trying my cases, most cases eventually settle for full value during this process.

The key to successful mediation is to be prepared and stand your ground. Only agree to a mediator that is well known for getting the job done. There is a list of mediators that the insurance companies seem to have in their back pocket and who will do all they can to try and get you to settle the case for pennies on the dollar. They know most of their annual fees are paid by the carriers so guess which way they tend to lean when settling cases. Avoid these mediators at all costs.

Mediation is a negotiation so use these techniques to make the most of the process. If the other side is demanding that you mediate a case and, you think it might be beneficial, ask them to pay for the mediation in exchange for agreeing to participate. Along the same lines, make sure to get the other side to share their settlement range with you so that you do not waste your time. The last thing you want to do is agree to a mediation, show up, and get low balled all day long.

Bad faith laws and coverage denial

As mentioned above, California bad faith laws and how they can directly affect your client should always be taken into consideration. Insurance bad faith laws allow you to not only ask for the full policy limit payout for your client, but also an additional sum if the insurer refuses to follow the law (yes this does happen). If used correctly, this is a huge threat to insurance companies in first party cases. They will do their best to avoid this scenario, however, and if they fail to do so it is up to you to provide the court with evidence that the bad faith law applies.

In instances where carriers have denied coverage or claims in full, you need to seriously review all bad faith options. If you do not have experience in first or third party bad faith claims, it is a good idea to contact a lawyer in your town who can review the file and provide you with input and advice.

Conclusion

When presenting personal injury and wrongful death claims to insurance companies, always be prepared and investigate all insurance coverage issues. Get copies of all insurance policies and read them carefully.

This post is intended to share some broad brushstroke ideas about how you may want to approach your next California personal injury or wrongful death case. Use the aforementioned strategies to maximize insurance coverage and win the case for your client.