February 10th, 2007

Is Allstate really Allsnake?

Personal injury claims are difficult if small, due to the problem of finding an attorney for representation. A great read is Anderson Cooper’s February 7th story on Allstate practices when it comes to such small claims, when people find out that Allstate’s “good hands” stuff is apparently just marketing, and not reality. The lede:

Insurance companies fight paying billions in claims
Put yourself in the driver’s seat of this accident. You are heading down the street when a truck comes out of nowhere and slams into the right side of your car. The damage to the vehicle is obvious: dents across the passenger door.

You are hurt too, thought it’s not obvious how much: a slight cut above your eye, an ache in the neck.

Your doctor says your spine was injured, you have soft muscle tears, and the pain in your neck mostly likely is whiplash.

It’s going to need therapy, she says, and some time off work to heal. And in the end it’s going to cost you $15,000 in medical payments and another $10,000 in lost wages, because you took so much time off work.

But when you send the $25,000 bill to the insurance company of the person who hit you, the insurance company says it’s only going to pay you $15,000. You can take it or leave it.

What do you do?

The rest is here.

Surprise, surprise, taking premiums is a lot more fun than paying out claims.

And thanks to The Tortellini for the heads up.

January 11th, 2007

State Farm to Pay Punitive Damages. Again.

State Farm has done it again. Some years back they made quite a bit of law in a case called State Farm v. Campbell that went up to the U.S. Supreme Court on the issue of punitive damages that they had to pay for their conduct.

Now they got smacked again by a jury, this time for $2.5M in a case they offered to settle for $20K. This time, it was people victimized once by Katrina, before State Farm got to them for a second go-round:

Jan. 11 (Bloomberg) — State Farm Mutual Automobile Insurance Co. must pay a Mississippi couple $2.7 million for the loss of their property, a judge and jury ruled in a test case over how much Hurricane Katrina damage is covered by insurance.

The judge, deciding actual damages without the jury, awarded $223,000 for the home and belongings of Norman and Genevieve Broussard of Biloxi, Mississippi. The jury awarded punitive damages of $2.5 million for State Farm’s improper conduct in processing the claim…

The Broussards argued their house had been destroyed by wind or a tornado, a type of damage covered by insurance. State Farm, which is owned by policy holders, argued at trial that the loss stemmed from flooding, which the company’s policy didn’t cover.
…

[U.S. District Judge L.T. ] Senter called the company’s handling of the claim “impermissible,” saying it offered the couple no choice except to sue over their claim.

“I find the defendant did not have any legal or arguable reason for refusing to pay,” Senter said today in federal court.
…

Senter ruled today that Bloomington, Illinois-based State Farm, the largest U.S. auto and home insurer, failed to present enough evidence for the jury to be able to find that the policy terms didn’t cover the damage.
…

The Broussards‘ attorney Bill Walker told the jury that his clients had been needlessly wronged by State Farm.

“Did they act like a good neighbor?” he asked, referring to the company’s famous slogan. “No, they acted like a cheat. They acted like a chiseler.”

January 9th, 2007

Port Authority Cancels Geico Contract for GWB

I posted just two days ago about the dangerous agreement that the Port Authority made with Geico to put billboards and other ads on the George Washington Bridge. Dangerous because the main focus of the $3.2M agreement was to divert the attention of drivers in a toll plaza away from the cars around them and toward the ads. Where they saw money, I saw danger and liability.

And just as suddenly as it was announced, the deal is now cancelled, as per this article in today’s New York Times. As much as I would love to claim credit that my injury warnings from this tiny corner of cyberspace had something to do with it the article doesn’t cite safety as any of the reasons.

January 7th, 2007

Geico and New York’s Port Authority: Making Life More Dangerous

You really can’t beat the irony. New York’s Port Authority wants to let Geico put giant billboards up at it’s George Washington Bridge toll booths touting “safety” according to a New York Times story late last week (sub req.)

Why irony? Because the billboards will intentionally distract drivers as they approach the tolls. That is, after all, the basic idea a billboard — a distraction from driving to read the sign. This will be done in a spot with lots of stop-and-go traffic and lane-changing. According to the article, the signs:

will include the posting of a huge billboard on top of the toll plaza in Fort Lee, N.J., that says “Geico Drive Safely.” Drivers will also see Geico signs with the company’s mascot, a gecko, on the tollbooths and electronic signs on the approach roads.

Busy toll plazas are undoubtedly one of the more accident-prone pieces of roadway. I bet the toll workers and policemen that need to constantly walk that area are thrilled to have more distractions for the drivers.

Geico will pay $3.2M for two years for the ads. So I guess money trumps safety for the insurance company and the Port Authority that operates the bridge. The more things change in this world, the more they stay the same.

[Addendum: One day after this blog entry, the Port Authority cancelled the agreement , though the New York Times article said nothing about safety issues.)