Recently in Bad Faith Insurance Category

July 2, 2009

Louisville Kentucky Plaintiff Receives Large Verdict Against Doctor's Insurance Company

A 39 year old Kentucky woman went to Lourdes Hospital in Paducah to undergo a hysterectomy. While there, her Ob-Gyn, Dr. David Grimes, recommended that she also have a tummy tuck. The procedure Dr. Grimes used was so rare that he is the only physician in the U.S. that performs it using that procedure. The injuries resulting from the surgery were severe and Ms. Daniels suffered a bowel obstruction and a permanent large abdominal wound. After the surgery Ms. Daniels was restricted to the lightest of activity as any moderate amount of activity could lead to a hernia. Since this first surgery, Ms. Daniels had to endure ten additional surgeries and remained on constant pain medications and has been unable to work. After filing suit, the plaintiff sent a settlement package and demanded the one million ($1,000,000) policy limit of the doctor with American Physicians Assurance Corporation (APA). Dr. Grimes filed for bankruptcy during this time and thus was not liable for any judgment in excess of his policy limit. Moreover, because of the bankruptcy, the insurance company was in complete control of authority to settle the case with Ms. Daniels.

The first medical witness APA obtained for this case indicated that after learning the facts of the case , she was appalled at the care Ms. Daniels received by Dr. Grimes and that his conduct was "inexcusable and indefensible." Through the course of discovery and up to mediation, while the Plaintiff's medicals totaled $380,000 and her lost wages totaled $890,000, APA's highest offer was $75,000. It wasn't until the eve of trial that APA paid $650,000 on the case with Daniels reserving the right to sue APA for bad faith.

Daniels filed a separate action against APA alleging bad faith on the part of the insurance company. She alleged that despite the low offers, APA internal documents valued the case at more than $1,000,000. Daniels also alleged that when APA's own witness expressed her opinion on the case, APA knew or should have known that the actions of their physician were not defensible and liability was reasonably clear. Tactics of the insurance company were also addressed, specifically providing incentives to its adjusters to reduce payouts and increase the number of cases that were tried to a jury. Also noted by Daniels was the goal of APA to have its adjusters cut her claims by $3,479,277. APA offered their adjuster incentives to meet this goal.

Daniels won at trial on several counts of insurance bad faith concerning APA's delay in settlement, misrepresentation of the policy coverage, APA's failure to adopt reasonable standards and failing to act in good faith to effectuate a settlement. As for damages, the jury awarded Ms. Daniels $205,000 for the difference in the value of her settlement plus $145,000 more for emotional distress. The award for punitive damages was $3,479,277, equal to the incentive goal for APA's adjuster.

Unfortunately, cases like Ms. Daniels are increasingly common. Insurance companies use a variety of tactics to reduce the amount they pay. See our blog entry Kentucky and Indiana Insurance "Bad Faith" Tactics to Be Aware of and Avoid for some of the most common bad faith tactics of insurance companies.

If you have been injured, an experienced personal injury attorney at Miller and Falkner can work to get the settlement you deserve from the insurance companies and protect you from their bad faith tactics. Contact us today.

April 21, 2009

Kentucky and Indiana Automobile Accident Victims Find Auto Insurance Companies Fighting Claims

It is happening all over Kentucky, Indiana and the rest of the country.  An individual is driving down the road when they are suddenly struck by another vehicle.  There is some damage to the vehicle and the individual is in some pain.  It could be a headache, neck or back pain, or a sharp pain in the knee.  After a visit to the emergency room or a physician, physical therapy or some other medical treatment is recommended which required some time off of work.  Before too long there are medical bills, lost wages and damage to the vehicle to worry about. 

car accident.jpgThese minor-impact automobile accidents happen every day.  However, what many people do not realize is that the problems for the injured person do not end after the accident -- they are just beginning. 

In an effort to reduce losses and increase profits, many large insurance companies deny and/or delay even the most straightforward of claims.  CNN and Anderson Cooper conducted an 18-month investigation into minor-impact soft-tissue injury crashes around the country.   What was discovered by reviewing documents and talking with former insurance industry employees was insurance companies systematically adopting a "take-it-or-leave-it" strategy when dealing these minor-impact soft-tissue injury crashes, even when liability is not an issue.  This strategy was deemed "institutionalized bad faith" by University of Nevada insurance law professor Jeff Stempel.  This strategy seems to have been developed in the mid-1990s and for insurance giants Allstate and State Farm, according to CNN, this strategy was developed with the assistance of consulting firm McKinsey & Co when looking for ways to boost profits.  CNN noted that while these documents from McKinsey are under seal in courts around the country, they were able to view several of them during a court hearing in Lexington, Kentucky.  One such document viewed by CNN played on Allstate's slogan "You're in Good Hands" by stating that the insurance company should put boxing gloves on those hands for claimants that insist on going to court.

As one former Allstate and State Farm employee stated to CNN, the strategy of these insurance giants relies on the three Ds -- denying a claim, delaying a settlement, and defending against the claim if it goes to court.

Read the articles by Anderson Cooper 360 regarding this investigation.

Insurance Companies Fight Paying Billions in Claims

Auto insurers play hardball in minor-crash claims

View the three part series which aired covered this investigation.


 

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April 3, 2009

After Injury Individuals Find That Independent Medical Exams Are Not Really Independent

Whether you have been injured in a car accident or at work, if you have made a claim for benefits (whether or not your claim has resulted in suit being filed) you might be subject to an Independent Medical Exam (IME).  An IME is designed by insurance companies and employers to reexamine an injured person to see if the doctor performing the IME agrees with the diagnosis and recommended treatment which was given by the injured individual's doctor.  However, as discussed below, many problems arise from these IMEs.   

doctor.jpgThe title of Independent Medical Exam can be very misleading as they are not really independent.  As a New York Times article explains, their review of case files, medical records and patient interviews in New York worker compensation claims indicated that exam reports that results from these Independent Medical Exams are routinely bias towards and benefit insurers and employers over the injured individual by minimizing or dismissing altogether the injuries sustained. 

The main reason for this bias is that employers and insurance companies are the companies that pay for these IMEs and therefore, if a physician starts producing reports that do not benefit the company's position on the injuries, that physician will likely not receive further IMEs from that company. 

Many injured individuals have been able to contest the findings of these IMEs and prevailed, however resolution can take many months or years and many people simply give up.  A personal injury attorney can assist an injured individual not only after a biased IME has been given, but before any IME has been conducted. 

If you have been injured in an automobile/trucking accident or at work and your employer or an insurance company is requiring an IME for your claim, conduct the the personal injury attorneys are Miller & Falkner to help protect your rights against unfair IMEs.
March 13, 2009

Kentucky and Indiana Insurance "Bad Faith" Tactics to Be Aware of and Avoid

Through our Kentucky and Indiana law practice we deal with client questions on a daily basis concerning denial of insurance claims.  Insurance companies are in the business of making money and have been very successful by acting in bad faith.  However despite record profits, insurance companies still employ unethical tactics and tricks in order to continue to increase their profit at the expense of their insureds.  The American Association for Justice has issued their latest research report titled

Tricks of the Trade:  How Insurance Companies Delay, Deny, Confuse and Refuse.  Included are several stories of real people who were victims of illness or accident and then became victims again by their insurance companies.  It is important to be aware of the common tactics and tricks your insurance company may use before dealing with them.  Below are two of the common tactics listed in the report.

AAJ Tricks of the Trade.jpgDenying Claims

One tactic of large insurance companies is to deny valid claims in an effort to boost profits.  Many of the largest insurance companies have created employee incentive plans to reward employees who deny claims successfully and replace employees who do not.  Just a few examples listed in the report include insurance giant Farmers' incentive program "Quest for Gold" which offered its employees incentives for meeting low payment goals including $25 gift certificates and pizza parties.  Allstate also used incentives such as portable fridges to reward employees for denying valid claims.  Allstate also used what they referred to as a "boxing gloves" approach when dealing with policyholders who would not accept lowball offers on their claims.   

Delaying Claims

Another way for insurance companies to avoid payment is to simply delay the claim for as long as possible.  Insurance companies know that by delaying claims, many claimants will eventually give up or even die, therefore possibly avoiding any payment at all.  For most policyholders asserting a claim, is a very vulnerable time in their life either due to an illness or accident.  Insurance companies realize that claimants do not always have the time or energy to continue resubmitting claims and required documents and to continue calling the insurance company to see if their claim has been approved.  The report lists tactics admitted by long-term care insurer Conseco and its subsidiaries that included:  mailing the wrong forms to claimants and then denying their claims due to having the incorrect paperwork, declaring claims abandoned by policyholders if certain paperwork was not submitted within 21 days, and requiring documents that were not even required under the insurance policies before payment would be issued.   

Prepare yourself for these tricks by following some basic guidelines:

Read your policy -- you need to be aware of who is covered under your policy, what is covered and how to appeal if the insurance company denies your claim.

Know what you are filling out and what you are signing -- be very careful in filling out forms, answer the questions correctly and understand what you are signing and agreeing to.  Do not simply trust the insurance agent to explain the documents to you, read it. 
 
Do not Cash a Premium Refund Check -- insurance companies sometimes send these checks if they decide to rescind your insurance.  This check would cover the premiums you paid, however if you cash this check, it may be interpreted as your acceptance of this decision, leaving you uncovered.
 
Keep records of all conversations and get everything you can in writing -- this will not only help you keep track of what has been said while dealing with an insurance company but will also be beneficial should your claim not get resolved prior to litigation. 


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