Jim Dodson: So, you need insurance. Why doesn't your insurance company act like they need you?
Hi, I'm Jim Dodson, the Florida Bike Guy, welcome to our live stream. I want to cover some really basic points about dealing with your own insurance company at the time when you need them the most.
The first, remember insurance companies are driven by profit. They're not driven by loyalty. Adjusters cannot pay simply what they want. They have to pay what they're given, and what is with their set reserves, and finally, in Florida's insurance bad faith laws, are the only thing that hold insurance companies in check.
So, I think it's many times I've talked to people who've been involved in a crash. They're relying on their own uninsured motorist coverage to help them because the other driver had no insurance or didn't have enough to cover the entire claim and people are befuddled. It's like, I've been with this insurance company for 20 years and suddenly they don't act like they care about me and it's very frustrating to them. But remember, you and I are driven by loyalty. Many of us have been with an insurance company for many years, but when it comes down to you needing them and you have a claim, you are not a loyal customer, you are a claimant. You are trying to affect their bottom line.
Now, remember that insurance companies, at the end of the day are driven by profits. And profits trump loyalty to you in most situations. There are some rare exceptions. They're perfectly willing to sacrifice you as a loyal customer to make it better for their bottom line. They're not gonna pay you a thousand or five hundred or $5,000 more than they assess your claim to be worth. They're just not going to do that simply because you've been a faithful and loyal customer.
There is something in the insurance industry known as the loyalty penalty. I've written about this in the past. The loyalty penalty is that many insurance companies, when they realize that you'll renew every year, will actually start creeping up your policy cost, knowing that you're not checking, that you're not holding their feet to the fire. You're not going out and comparison shopping. And so, sometimes when people stay loyal to an insurance company and do not check them with quotes from other carriers, you end up actually paying a loyalty penalty, something to be kind of wary of.
Now, I have to tell you in our practice I do run into insurance companies and insurance adjusters who act like and sound like they're standing up for their insured, you know, but that is honestly a rare conversation. Most of the time it is simply their assessment of the bottom line value of your claim and their unwillingness to pay a penny more than they think the claim is worth to them. I'm always reminding claims adjusters that value like beauty is in the eye of the beholder because they always are telling me how fair they're being and we fairly evaluated this claim even though it's way off what we think the value of the claim should be. But either they've convinced themselves it's fair or their view of fairness is totally different than ours.
You know, claims adjusters... Well, when a claim is brought to an insurance company, it's assigned to an adjuster. That adjuster has a management team above the adjuster. We do have cases occasionally, we're dealing with one today, where a claims adjuster in our view has all the settlement authority this person needs to settle the case. She doesn't need to go to someone for permission to pay a large sum of money, but that is very rare. In most situations we're dealing with an adjuster who has a limited settlement authority. They have to go to their manager to request authority. In other words, permission to settle the case within a certain defined limit. And they cannot simply pay an extra $5000 to get the case settled because they'd like to get it off their desk. They're limited by, what their management team is going to give them.
I've really found, I think that sometimes we view these insurance adjusters as being nasty, bad people. They're really not. They're people like you and I. They have a family. They go home at the end of the day and pet the dog and do all the things you and I do. They've got a job to do during the day. They mostly have more cases on their desk than they can handle. They'd love to get your case off their desk, but they're operating within these confined parameters of the permission of their boss to give them money and what they have set as a settlement reserve.
So, this issue of setting settlement reserves is interesting. Remember that insurance companies are regulated industries. They're regulated by the Insurance Commission. There's a lot of structure to how insurance companies operate internally. When a claim comes in, the claims adjuster has to set aside money in the insurance company's reserve fund to pay every claim. And in our practice we have an experienced claims adjuster that works with us and we're constantly discussing what information can we give the insurance company that will help them set the reserves at the highest level. It is so much simpler when an insurance adjuster gets information about a claim to set the reserve at the highest level before he's called upon to settle it. When we later send our settlement demand, it's so much easier to get full value of the claim if they've set the reserves high enough. If the insurance adjuster sets the reserves at $100,000 and by the time they receive a settlement demand from a lawyer for $250,000, they've gotta go back in and get the reserves adjusted in order to pay that much if they wanted to do so. This means going back through the reserve process and justifying now why they're increasing the reserves from where they were to where they actually probably should be.
So, you know it's important to understand from our standpoint when we give information and what we reveal so that it will effect the adjuster setting those reserves at the highest level. I think many people when they, you know, we get calls from people all the time who, they think that they can save a third of the value of their claim and maybe deal with the insurance company on their own. They don't understand anything about how the process works behind the scene. They have no idea of the value of a case. They have no idea if their case is on the high or low end of what other people would consider a fair range of value. And then they just get totally frustrated because the insurance company's not doing anything in response to what they believe the value of their case to be. So, it's knowing how the process works in order, buttons to make the process as best that within the confines of what to deal with.
So, just talk to you, one thing about, you know, we're known as the Florida Bike Guy. I'm located in Clearwater, Florida. I've been a cyclist for many years. But I've been a personal injury lawyer for many more years and for years, we have done--
Okay. So we've got a delay going on here. I'm gonna reset the signal. So if you can hear me, we're trying to go through that process. Apparently, we're having some technical issues with our BeLive stream this morning.
We're good to go.
Okay, so what I was saying before we had our little interruption here with the signal, if you've been involved in a crash and you maybe wondering whether you have a case as a cyclist. You may have been involved in motor vehicle collision or fall or some other type of an injury claim, I always tell cyclists you're more likely to have a motor vehicle crash than you are being injured on your bike, fortunately. And we do all of those cases. We have a very unique team set up here to help people. I have my years of experience as a cyclist, but really many, many more years as a lawyer handling all types of injury cases, including trying cases. I've got the world's best legal assistant and we have a claim's adjuster that works with us in-house who's got over 26 years of experience.
Sorry, we're gonna have them bring you back. Back up.
Okay. We have all kinds of issues this morning with the signal. So, you know we're doing this electronically. One of the good things about electronic communication is that so seamlessly most of the time. When it doesn't work it's a big pain, because we have issues like today when you have a signal delay. So we'll try to work through those as best we can.
But, I was saying that we've got a claims adjuster in our office that has 28 years of experience knowing the buttons to push with insurance companies and when to push them. If you think you need a lawyer after a crash or you know someone who thinks they need a lawyer after a crash, call and talk to us. I'll be the first to tell you whether we can help you or whether we can't. And don't worry, you don't need to show up in our office, we'll come to you if it's necessary.
So, I'm gonna go on and talk about negotiating with a claims adjuster. Remember that the claims adjusters-- Good, all right. I got the signal we're good. So remember the claims adjusters, they sort of work in an area where we have to reach them on their terms. I've gotta reach out for them. I've gotta call them. We don't wanna negotiate by letter. I don't wanna negotiate by email. Most of them don't make their email available. I need, as a lawyer, I need to hear the person say what they intend to say because it's more important is how they say what they say, then what they say. If you can follow that. Their tone of voice tells me an awful lot about their intentions and their sincerity.
You know it's one of the things that frustrates us about dealing with claims many times is the inability to reach an adjuster on a schedule that we have. I've got time, I'm available, I can't reach the adjuster sometimes days, sometimes weeks can go by sometimes before they call you back and that's unfortunate. It sort of drags out the settlement process and it really aggravates and frustrates someone who wants to move on with their life and get their case settled.
The other thing to remember, that insurance adjusters are rarely, you can, but you cannot accept what they say at face value. There's a great deal of hide the ball going on. They believe that lawyers and their clients misrepresent the truth. Many of them don't think they can believe us, although, I make it my mission when I deal with an adjuster right away to establish a level of trust so that they understand that I mean what I'm gonna say and I say what I mean. But, still I'm a lawyer and I'm representing a client. They always have this sense that it may not be exactly as we represent it to be. Like everyone else in life, they wanna get your claim off of their desk. If they could do that as quickly as possible they'll be happy. But they, they're apt to operate within their settlement authority and they've gotta operate within their settlement reserves. And you know that holds, sometimes holds back the process. We're trying to get the case settled for more than they have authority for or perhaps, even more than they set the reserves for.
It's you know I think these are all, what I'm pointing out is these are all things that people when they're dealing with their own insurance company just don't understand why this is going on this way and why they don't feel like they're being treated like the valued and loyal customer they believe that they have been.
I wanna give you kind of an example of what happens on an uninsured motorist claim. You know I tell people all the time, particularly cyclists, you cannot ride a bike in Florida without uninsured coverage on your automobile because it protects you from a driver who has no insurance or too little insurance. But then, many times when they're involved in a crash, now we're relying on that uninsured motorist policy to cover the injury and financial losses that have occurred and I've gotta deal with your insurance company. All of these things I've been talking about sort of come into play at that situation.
We have insurance bad faith laws in Florida and those insurance bad faith laws in my view are the only thing that really holds an insurance company in check. If an insurance company, and this actually applies when it's the other person's insurance company, but I'm addressing right now how it applies to your own insurance policy. Insurance companies are bound by law in Florida to treat their insureds with good faith. Can you imagine that? You wonder sometimes if they ever have understood that principle when you deal with them in terms of them setting values on cases. But they have a responsibility to treat the insured in good faith. In other words, using the same fiduciary responsibility they would have in dealing with their own financial concerns. And if they fail to act in good faith, they can face the consequences of having to pay more on the claim.
I'll give you an example. So we deal with insurance companies frequently on uninsured motorist cases and what, Mark, our adjuster has really kind of driven into me over the years is that when an adjuster has an uninsured motorist claim, they really aren't concerned about getting in a bad faith situation until the demand has come and gone. And your lawyer, if they don't respond to the demand timely or make a good faith effort to settle the case, the lawyer can file what is known as a Civil Notice with the Department of Insurance. Now this is a notice to the insurance company and to the Insurance Commission that the company is, in your view, acting in bad faith. It sets a clock running. The company has 60 days to respond to that notice that they're acting in bad faith. And if they fail to do so, and you later sue them at a verdict very much larger, their be responsible for paying the entire verdict, even if it's more than your policy. That's what is so significant about Florida's bad faith rules. And I can tell you as a lawyer with many years of experience having the bad faith laws behind us as the insured protects you from them simply just running completely roughshod over the claims process. They know that I can't, as a lawyer, litigate every case we have. They can't litigate every case they have, but they many times do run roughshod because the system would just bog down if every case were in litigation. So we do need to have the cases settled, that should be settled and all cases shouldn't be tried they should be settled. There should be a clear meeting of the minds.
I'll give you an example. We've had situations with a well-known insurance company in Florida where we sent the demand, settlement demand to them, and they don't respond within the time set out in the demand. We send then, a Civil Remedies Notice to the Insurance Commission complaining that they have failed to act in good faith to the insured. They have a duty to explain if they're not gonna pay the claim, why they're not gonna pay the claim and some other factors. That starts the 60 day period. We've had situations where they've allowed the 60 day period to run. So now, they have tripped over the tripwire of a potential bad faith claim because they haven't responded to the demand and they haven't acted in response to the Civil Remedies Notice. And you know there's procedures within the company to make sure that doesn't happen, but they don't always follow these procedures. What we try to do obviously, we're trying to get a case settled for our clients, but the best settlement we can. Many clients don't wanna wait two years, three years, four years for all this litigation process to wind its way through. They'd like to get their case settled and move on with their life. But, I can tell you that the role of the insurance bad faith rules in Florida operate to your advantage. They create an opportunity for us to hold their feet to the fire.
So sorry, there's gonna be another delay.
- Okay, aah, this is terrible. We're having another delay apparently. And you know it's kind of funny, I can't see that we're having a signal issue on my screen. I can only see it on, I mean Katie has to come tell me that we're having a signal delay. So, my apologies if you're able to hear me for what's going on this morning. And the other thing is I don't know when we have a delay like what didn't you hear? Where did it kick in and what issues?
I think you're good. I'm gonna bring you back.
Okay. So part of the time when we have a delay, I'm actually off the screen. I never know exactly where I've been because it's not on mine. I can't see it.
So, what am I pointing to? Remember that insurance companies are not acting in your behalf because of loyalty. They're acting on their behalf to increase their profits. It doesn't matter to them that you've been a loyal customer. Insurance agents or insurance adjusters can only settle cases within their settlement reserves and within the authority given to them by the management team above them.
And finally, the insurance bad faith laws in Florida operate to help you, the person who's got the insurance, hold your insurance company accountable when they stray outside the lines and don't obey the standards required of them within the state.
The important thing is that having listened to this people must realize dealing with an insurance company is not something for the fainthearted and it's not something for someone who is not a lawyer, an experienced injury lawyer, to do. There's too many ways that they can take advantage of you. So, I always urge you if you've been involved in a crash, you wonder if you have a case, you wonder if you have a claim that a lawyer should handle or would handle, call and talk to us. We're only a phone call away.
I hope that you find it helpful. I think it's always good to understand how the process works. I wanna make a free resource available for you today. Our Uninsured Motorist Book. Uninsured Motorists Don't Leave Home Without It. Katie's got a bit.ly link on the screen. The bit.ly is FloridaUMBook. If you'll contact us we'll get you a book right away. Be safe out there. Have a great day. That's it from the Florida Bike Guy. Have a great week, bye.