Small Widget Spot

March 7, 2017

Don’t Let Your Insurance Company Treat You Unfairly!

Don’t Let Your Insurance Company Treat You Unfairly!

Don’t Let Your Insurance Company Treat You Unfairly!

Most of you have insurance.  You insure your autos, your homes, your health (medical insurance), your income (disability insurance) and your lives. You may also insure your businesses against damage to property used for commercial purposes and loss of income. Your insurance includes protection against lawsuits filed by a third party against you, and you expect your insurance company to defend you in that lawsuit and protect you against a judgment for money damages.

Fear of the Future

We buy insurance not because we want it but because we need it – fear of the future motivates us to protect ourselves against injury to ourselves, our families and our property.   The prudent person buys as much insurance as he or she can afford – sometimes even more. We seek from our insurance company peace of mind and security against the risk of financial injury caused by the unexpected.

Frenemies?

Your insurance company is a friend when you agree to purchase the insurance.  However, often that same insurance company becomes your enemy when you make a claim. The claims process is often a hostile and difficult one with a burdensome amount of paperwork and frequent requests for more information. Usually with the goal of finding a way to turn down your claim or limit payments.  Some insurance companies reward their claims handlers for keeping claim costs down by basing their compensation on how little they pay on legitimate claims.

Power and Control

Insurance companies are powerful financial corporate structures.  They have large treasuries.  While the purchase of a policy may take place at your home or business or at a local office, things are different when a claim is made.  Nearly all of the time you are dealing with someone who is hundreds if not thousands of miles away. A face to face meeting is rare, except when an investigator shows up at your door unexpectedly. Indeed, your insurance company has the power and control over you in your relationship with it.

Consider these points:

  • Your insurance company fixes the price; there is no bargaining.  You can lower your cost only by accepting less insurance
  • It chooses the language for your policy; you are stuck with the policy terms your insurance company selects
  • Your claim is paid when your insurance company decides to pay; it determines when and how much you receive
  • Dealing with your insurance company is on a take it or leave it basis

What Can You Do?

What can you do when you believe your insurance company acts unfairly?  How do you combat “low-balling” or wrongful refusals to pay you what the insurance company promised to pay you for the protection that you purchased?

You can go to your state Department of Insurance. However, these state executive departments are generally ineffective.  More than one-half of the states under-fund their Departments of Insurance, so they have inadequate staffs and resources to handle complaints from the public. In some states, the Department of Insurance has been graded as low as an “F” by an independent agency. Not surprisingly, when a claim is denied your insurance company will usually refer you to the state Department of Insurance if you disagree with the claims decision, knowing that you will receive little help.

Unfair Claims Practices Act

What your insurance company does not tell you is that there are ways to combat its wrongful denials.  For example, in nearly all states, there is an Unfair Claims Practices Act which lists 16 unfair claim practices which insurance companies cannot engage in.   You are never told about this when your insurance company denies a claim.

In addition, all insurance companies must abide by a duty of “good faith and fair dealing” in their investigation, administration, and decisions regarding your claim.  If your insurance company violates these duties to you, you can sue and obtain money damages for what is owed you under your policy plus damages for your worry and anxiety and in some instances attorney fees.  And, in the cases of malicious and fraudulent claims handling, your insurance company may be liable to you for punitive damages based on a civil fine which you receive to punish the company for its wrongful conduct.

Don’t put up with insurance company abuse and unfair treatment

We can help you evaluate your claim and determine if you need to sue to get what is rightly yours under your insurance policy. You paid for protection; YOUR insurance company should provide it! — Guy O. Kornblum

Mr. Kornblum welcomes your comments at gkornblum@kornblumlaw.com.

March 2, 2017

The Resolution Advocate: Preparing for an Effective Mediation

The Resolution Advocate: Preparing for an Effective Mediation
The Resolution Advocate: Preparing for an Effective Mediation

The Resolution Advocate: Preparing for an Effective Mediation

Preparing for an Effective Mediation

It takes considerable effort and preparation to make the mediation process work. One complaint I hear over and over is that some lawyers — and perhaps clients —  just don’t get it. Based on my experience, some of what it takes to prepare for an effective mediation:

  • A common and good faith interest in mediation
  • An exchange of complete and thoughtfully prepared mediation statements and exhibits well in advance of the mediation date
  • The presence of those with real authority to settle
  • A level of candor and disclosure that allows the parties to realistically assess the other side’s position

Stating the Obvious

Perhaps the most important trait of a good advocate who also serves as a mediator is listening to what the other side has to say, along with carefully assessing the position counter to the clients. If this is done — and it should be if counsel’s representation in mediation is to meet professional standards — it allows for a full discussion and exchange of information before and during the mediation. The chances of reaching a settlement increase dramatically.

I am not alone. In an article by the Honorable James L. Cott, a Magistrate Judge in the USDC, Southern District of New York, “The Dos and Don’ts of Settlement Conferences,” in the Winter 2016 issue of Litigation, the Journal of the Section of Litigation of the ABA (Vol. 42, No. 2), the author provides a list describing what is required to be ready and effective at mediating:

  • Think about the case from the other side’s perspective
  • Don’t wing it
  • Bring documents and key evidence
  • Be as candid as possible in any pre-settlement submissions to the court
  • Be prepared to make an opening statement
  • Make a demand and engage in real negotiations before coming to the courthouse
  • Don’t bring someone without ultimate authority to settle
  • Don’t’ make the court manage your client’s expectations
  • Anticipate all the materials terms of the settlement before the conference
  • Don’t just come with a bottom line – be willing to be flexible and creative

Most of these points seem obvious because they are. So why would Judge Cott repeat them? My guess is because in his experience many lawyers representing clients in mediation are not doing their jobs correctly and are taking the mediation process too lightly.

Don’t Waste Time

From the plaintiff’s perspective, it is a waste of time and money to participate in mediation if the defense is not prepared. To effectively prepare, the plaintiff — well in advance of the mediation date — lays out the client’s case fully and candidly. Key exhibits and expert reports, not just conclusions and arguments without evidence to support them, included.

From the defense perspective, counsel needs to prepare the client representative well in advance of the mediation so any internal caucus can be conducted and the appropriate authority obtained. The defense also needs time to evaluate what experts might be involved, and obtain those reports. That has to be done well in advance of the mediation date. It is often a difficult task because the client representative or the insurance company claims handler is not local or is just too busy to devote the time necessary to participate in the preparation process.

Get Going

Indeed, as I sit here today, we just confirmed a mediation to take place in a bit over two months from now. I started the preparation process today by scheduling a meeting with our firm’s associate who will assist me, the client, and another lawyer who is involved. We will outline what needs to be done, confirm our objectives for preparation, and assign our tasks.

Are They Serious?

There is another point to consider: One of the important items on my agenda as a plaintiff’s lawyer is to assess how serious the other side is about going through the mediation process so as to ensure a meaningful dialogue. I often have a heart-to-heart talk with defense counsel to make sure the timing is right, the proper people are involved and the commitment is there. Or I might ask the mediator to make sure this is the case. Frankly, in most cases I do this myself, but I will inform the mediator of my intentions beforehand to make sure it is okay to proceed. Sometimes the mediator will offer to do this, which I welcome if I think the mediator has the presence to do this effectively. I have on occasion asked permission to make this call because I feel strongly that I will be more effective because of a prior relationship with opposing counsel.

Two More Good Articles on Preparing for Mediation

The first article, “Making Certain the Settlement You Intend is the Settlement You Get,” by Robert Hugh Ellis of Dykema Gossett PLLC in Detroit, stresses thinking through the terms of your settlement and making sure all aspects are clearly covered so the deal you expect is the deal you get. Indeed, a deal may not be a deal. He emphasizes two points:

  1. Think through the terms of the settlement so that you can be sure that any “term sheet” incorporates the material terms; and
  2. If the agreement at the mediation is not intended to confirm that a settlement has been reached until a final formal settlement agreement is reached, then say so in the term sheet. In short, make sure you understand what “finality” means.

The second article, “The Seven Deadly Sins of Mediation,” by Joel Levine, an experienced mediator, explains how to avoid self-inflicted wounds in mediations. These include:

  • Not Preparing
  • Choosing the Wrong Mediator
  • Not Preparing the Mediator
  • Not Preparing the Client
  • Not Asking the Mediator for Help
  • Insulting Everyone
  • Lack of Clarity
Negotiating And Settling Tort Cases Book

Negotiating And Settling Tort Cases by Guy O. Kornblum

Finally, Judge Cott repeats a quote from Abraham Lincoln, which is one of my favorites and which I have in my book on negotiations (see bio):

“Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to them how the nominal winner is often a real loser — in fees, and expenses, and waste of time. As a peacemaker, the lawyer has a superior opportunity of being a good man. There will be business enough.”

Good meditating. Let me hear your views. Send them to gkornblum@kcehlaw.com — Guy O. Kornblum, The Resolution Advocate