With court closures and backlog, initiating litigation can result in a significant delay in getting cases resolved.
SACRAMENTO, CA, June 30, 2020 /Neptune100/ — The automobile insurance industry recently made a big to-do about offering premium refunds or credits because people were driving less due to the pandemic. Not only were the on-average 15% premium discounts not equivalent to the average driver’s reduction in miles driven per month, but insurance companies also found another way to bankroll even more money on the back end.
Ed Smith, a Sacramento Personal Injury Lawyer and founder of AutoAccident.com says insurance companies gave with one hand and took away with the other.
“Instead of being satisfied with the amount of money they were saving because there were far fewer auto accident claims, insurance companies took their greed a step further by offering outrageous low-ball settlements to injured claimants,” said Smith. “These actions by auto insurance companies are an example of giving (sparingly) with one hand and taking (freely) with the other.”
Unfair Claims Handling
On May 14, 2020, the Commissioner of the California Department of Insurance issued a memorandum to all insurance companies and adjusters. The memo referenced the closure of California courts, and the fact that once the courts reopened there would be a significant backlog of cases. With criminal cases taking priority, civil cases were determined to be, in essence, unavailable for an undetermined amount of time.
Using Court Backlog to Take Advantage
In non-pandemic times, when an injured person with an insurance claim is not able to get a reasonable settlement offer from the insurance company, they can file a lawsuit. However, with the court closures and backlog, initiating litigation will result in a significant delay in getting cases resolved. The insurance companies are using this court backlog to take advantage of the long delays that will be involved with civil litigation. This is especially true when the injured parties are desperate for a settlement because they are experiencing financial difficulties from COVID-related job loss or an inability to work due to their injuries.
Department of Insurance Has Become Aware, Issues Warning of Fines
The memorandum from the Department of Insurance stated that the Department had become aware that insurance companies within the state were using the pandemic to their advantage and were issuing unjustifiably low offers to settle claims. The Department had also become aware that some insurers were lowering their offers or not issuing offers at all because they knew that the injured party was currently deprived of the resources of the court system. The inability to access the court disadvantaged claimants, especially those that were experiencing financial hardship. The disadvantage left those claimants vulnerable to unfair settlement practices.
The memorandum outlined provisions from the California Unfair Practices Act, which sets forth scenarios that amount to deceptive or unfair practices. Those include:
• For claims in which liability is reasonably clear, not trying in good faith to promptly facilitate equitable and fair settlements.
• Forcing insureds to file lawsuits by offering an unreasonably low amount in spite of the evidence.
• Not settling clear liability claims promptly under one part of the policy with the goal of influencing settlement under other parts of the policy.
The Commissioner instructed insurers that they must comply with the legal requirements found in the California Unfair Practices Act to fairly and promptly settle claims, or they would be fined.
If you have experienced this issue with your insurance company, please report it to the Insurance Commissioner.
To learn more, visit the AutoAccident.com website.
For more information contact:
Edward A. Smith, Esq.
1900 Point West Way #200
Sacramento, CA 95815
Established in 1982, AutoAccident.com is a Sacramento, California based Personal Injury law firm providing legal assistance with cases involving auto accidents, motorcycle accidents, and personal injury including all mass tort cases, wrongful death, medical malpractice and consumer product liability. Rated #1 Personal Injury Attorney in Sacramento by Google Users. The firm is a top-rated member of Avvo, the Million Dollar Advocates Forum, the Better Business Bureau and National Association of Distinguished Counsel. They are also proud members of Pledge 1%.
News Source: AutoAccident.com