No-So-Good-Neighborly State Farm has adopted various approaches to delay the resolution of claims, to wear down its insureds, and to force claims into litigation. This is a business model, and it's not unique among insurers, (and also- here), but considered in context with bills proposed to the CO legislature, felt worthy of a blog post.
A recent case of ours serves as a perfect example: "J" was hit by a car while riding her bike, nearly 2 years ago. Sadly the at-fault driver had very modest BI limits. We obtained those for her, and then pursued the remainder of her damages from her auto insurer, State Farm, under her UIM (under-insured motorist) policy. We tendered our offer of settlement to them back in July of 2016. As part of these negotiations, State Farm demanded that we provide them "all of her prior unredacted medical records."
Imagine -a lifetime of medical documentation -which would include wholly unrelated/irrelevant items! They also demanded an IME (independent medical exam = where they send their insured to a "doctor" of their choosing to be "examined").
When we pushed back, they lawyered up! Against their own insured! This is what you get when you faithfully pay your SF premiums for years, and then have the unfortunate occasion to pursue a UIM Claim for the injuries and damages you suffered from someone else's negligence!
I wish I could say J's case is an isolated incident, but it is not.
In addition, State Farm has been busy drafting bills for the Colorado legislature to consider, which -if passed - would substantially reduce Plaintiffs' rights to recovery and would reduce the settlement or verdict amounts that injured parties may pursue and/or ultimately receive. Below are 3 of the 4 they have proposed. We are sharing this information on our blog for a few reasons:
1) So that our current clients, whose cases involve either 1st party or 3rd party claims or lawsuits with State Farm, will understand "it's not personal." All too often clients like J -who have faithfully paid their premiums to SF for years and years, ask me "why are they treating me this way? ... I've never even filed a claim before- why are they being so unreasonable/mean?" I wish an insured's loyalty and years of premium payments were factors, but they are simply not.
2) So that State Farm insureds- and in our speciality, cyclists especially- will consider whether you want to keep your auto and home insurance with SF, knowing that if you need that UM/UIM claim someday, you know up front what their M.O. is.
3) So that in the current political climate, you are informed, and if you so desire, you can make calls on the bills below.
SB17-181 - Collateral-Source Rule Evidence Of Insurance
The bill modifies the collateral-source rule, which generally states that in a civil action for damages the jury should not be told about insurance coverage or other sources from which the plaintiff has received or may receive compensation (collateral sources). The bill allows evidence of collateral sources unless the plaintiff agrees to have the jury's award reduced by the lesser of: The amount paid or available to the plaintiff from collateral sources; or The amount of premiums or other contributions the plaintiff paid to those collateral sources. The bill establishes the procedure for determining these amounts and the conditions under which the plaintiff may elect to invoke the collateral-source rule.
Sponsors: Senator Bob Gardner (R-Colorado Springs) and Representative Yeulin Willett (R-Grand Junction)
SB17-181 would change the law and allow wrong-doers to profit from the insurance for which injured parties have paid.
SB17-182 - Uninsured Motor Vehicle And Medical Coverage
Current law forbids uninsured and underinsured medical coverage to take a setoff when medical insurance pays a part of the damages caused by a crash. The bill clarifies that this does not require the insurers to pay more than the actual damages caused by the crash. An insurer is authorized to prohibit stacking the limits of more than one uninsured motorist coverage policy if the provisions are included in a single policy covering multiple vehicles or in multiple policies issued by one insurer or by insurers under common ownership or management. But this provision must not prohibit stacking of the uninsured or underinsured policies issued to an insured by different companies or to an unrelated person. The maximum liability under the uninsured motorist coverage is the lesser of the policy limits and amounts paid by a legally liable person or the amount of damages sustained but not recovered.
Sponsors: Senator Bob Gardner (R-Colorado Springs), Representative Patrick Neville (R-Castle Rock) and Representative Yeulin Willett (R-Grand Junction)
SB17-191 – Market-based Interest Rates On Judgments
The current rate of postjudgment interest is 2% over the Kansas City discount rate with a floor of 8%. The bill eliminates the floor. The current interest rate for judgments for personal injury damages caused by a tort is 9%. The bill ties this interest rate to the current rate of postjudgment interest.
Sponsors: Senator Jack Tate (R-Centennial), Representative Cole Wist (R-Centennial) and Representative Yeulin Willett (R-Grand Junction)
SB17-191 reduces the amount of interest insurance companies owe to injured people and takes away their incentive to make timely payments.
Call to action:
If you feel so inclined, please consider contacting your senators and representatives to tell them to VOTE NO on these bills. To find your legislator, use this link - http://leg.colorado.gov/find-my-legislator - and enter your HOME address in the white search bar on the map.