- Claim #1 – Insured rear ended claimant; pushed her into a controlled intersection where she was struck broadside by another driver. She died 2 weeks later. Carrier sent policy limits within two weeks with a standard release. Claimant’s attorney returned check and indicated that his client would accept the check on certain conditions, re: her estate as payee and a “general release” with no other conditions, releasing the carrier’s insured only. Carrier, through its attorney, sent various “modified” forms of release, but never according to the claimant’s attorney’s instructions. Suit was eventually filed and an excess of verdict of over $3.5 Million was awarded. Extra-contractual suit for “bad faith” eventuall settled for an undisclosed amount.
- Claim #2 – Insured crossed center line and struck oncoming vehicle head-on, causing severe and permanent injuries. Carrier sent policy limits within 10 days with standard form release, made payable jointly to claimant and a hospital lienholder. Claimant’s attorney returned check, conditionally accepting offer but requesting change in payee to claimant and firm (he would take care of all liens) with a “simple, general, and unconditional release” releasing its insured only. Carrier’s attorney drafted release, but with various conditions and releasing “any and all claims and its insured, his, her, their, or its agents, servants,
successors, heir, executors, administrators, and so on. Claimant’s attorney became angered, severed negotiatons, filed suit against insured and secured a $2.2 Million excess verdict. Extra-contractual lawsuit against carrier for failure to settle within policy limits to detriment of its insured was settled for an undisclosed amount.
- Claim #3 – In a newly reported case, Villareal v. Eres (FL 2nd DCA, Sept 18, 2013), insured driver rear ended claimant, pushing her into an oncoming train. She was severely injured and her child was killed. Claimant’s attorney offered to settle with primary carrier for it’s $10,000 policy limit, on the condition that the release discharged only the insured and contains no hold harmless or indemnity agreements, and warned the carrier that any “conditions” included therein would be treated as a rejection of the offer. Unfortunately, like the others, the carrier returned a release that had “conditions”. As warned, the claimant’s attorney treated this as a rejection of the claimant’s offer, filed suit against the insured driver, and received a excess verdict of more than $10 Million. The carrier appealed the verdict alleging that they had accepted the claimant’s offer and the case was settled. The court said “No”, there was no acceptance of the offer as there was no meeting of the minds. Now what happens? The carrier has to figure out what to do with a $10 Million excess verdict against its insured.
In each of these cases, liability was clear, injuries (and in one case, death) was horrific. Undisputed damage values were easily in the hundreds of thousands, if not millions..and the request was for nothing more than a simple, general release that discharged the insured only contained no other conditions. Perhaps one has to get “burnt” once or twice before staying away from the fire. In this case, experienced claims judgment would seem to indicate that sometimes you have to just take a risk. If the claimant wants a one paragraph release with none of the standard “legalese” that is normally contained therein…and you are dealing with a serious case and an obligation to protect your insured, should the decision not be to just “give it to them!”
Unfortunately, the bigger question I keep coming back to is: “Who is watching the store? Where are the experienced claims professionals who should be looking close at these cases, realizing the risks, and making “the right choices” to protect the insured policyholder? Where has good claims judgment gone? Putting the policyholder’s interests first is always the best way for a carrier to protect its own interests; yet in the cases I’ve seen this year, claims operations seem to have taken a “detached, arm’s length approach” to the various potential outcomes. So far this year I have not seen much evidence that anyone cares…and that bothers me.
James W. Greer, CPCU
AE21 Incorporated & AE21 Online
Offices: Tampa, FL and Plano, TX