Insurance Companies Make Believe They’ll Treat You Fairly
Don’t believe insurance companies when they tell you that you don’t need a lawyer because they’ll take good care of you. They won’t. Insurance companies are in the business of collecting money for premiums and paying out as little as possible to increase profits.
Allstate was criminally convicted twice, by the State of New York, of practicing law without a license because they were sending letters to people injured in an accident telling them that they don’t need a lawyer because Allstate considers them as future potential customers and will treat them fairly.
Insurance Companies Scare You into Believing Lawsuits Are Out Of Control so You by More Insurance
State Farm Insurance has mailed letters (I received one) stating, “Here’s the bad news… people are suing each other more today than ever before.” The purpose of the letter is to scare people into buying an “affordable Personal Liability Umbrella Policy”. The letter ends with “Think about it. Hardworking people like you are prime targets for [a] personal liability claim.”
This is false information presented as a scare tactic to sell you an extra umbrella policy so State Farm Insurance and the State Farm Insurance agent can make extra profit. It is a good idea to have a Personal Liability Umbrella Policy if you have more than $300,000 of assets but really for other reasons.
First of all, the most obvious is that you can relax knowing you have sufficient coverage. But most people don’t realize that your insurance policy also provides you with coverage to pay a lawyer to defend you. This can be costly if you had to pay for it yourself. Umbrella insurance will provide you with the assurance that you won’t have to pay any legal fees if you are sued.
Are Lawsuits Are Out Of Control?
The fact is that there are fewer personal injury lawsuits than ever before. Any process server can tell you their business is down 35% in the last few years. It has become so bad, that I have heard defense lawyers starting to argue for plaintiff-friendly laws because they are going out of business.
One defense firm I heard about laid off 2/3 of its lawyers. The least experienced defense lawyer in the firm now has 8 years of experience. That is unheard of. Imagine that! Personal Injury defense lawyers are now crying that they don’t have enough business.
Contrary to what the news media, insurance companies, and politicians tell you, there is no need for tort reform. We have de facto tort reform instituted by the insurance companies’ refusal to settle small cases.
By the way, it is these small cases that have disappeared that cost the insurance companies the bulk of their money because there were so many more of them than big cases and because of the cost of administrative overhead. The big cases cost the insurance companies much less because there are so few of them and because they can accurately predict the amounts they will payout and the premium they need to collect.
Read The Truth About Insurance; Tort Reform; Jury Verdicts; Real & Phony Law Suits
State Farm Noticed a Decrease in Lawsuits
State Farm noticed a decrease in lawsuits and reduced my car insurance premiums this year (2018). I doubt my insurance premiums would have been reduced if “people are suing each other more today than ever before.”
But why haven’t insurance premiums been reduced proportionately? I believe because State Farm has 1) retained more profits (insurance companies are earning record profits); 2) retained some of the savings to offset storm-related losses; and 3) because while overhead must have been decreased, it may not have been decreased proportionately.
As a personal injury lawyer representing people who are legitimately and seriously injured, I strongly resent State Farm’s tactics. With the average lawsuit costing me several thousand dollars and three years of work, I only represent people who are 1) legitimately injured; 2) seriously and permanently injured, and 3) hurt due to someone else’s negligence. I have many friends who are personal injury lawyers and none of them take cases just because someone wants to sue.
State Farm’s claim that “people are suing each other more today than ever before” implies that even if the population were the same as “before”, more people are suing each other for no good reason. However, the population is continually increasing. Even considering the fact that the population has increased since “before”, the U.S. Department of Justice Bureau of Justice Statistics states that in U.S. district courts, “after reaching a peak of 3,600 trials in 1985, the number of tort cases concluded by bench or jury trial has declined by nearly 80%.”
Umbrella Insurance Is Still a Good Idea
Umbrella insurance is a good idea because you might get sued for an accident where someone is injured but you don’t need to be scared by threats of frivolous lawsuits.
Frivolous Lawsuits Are Rare Because Lawyers Can Be Fined
Frivolous lawsuits are rare and even rarer large jury verdicts in frivolous cases result in appeals reviewed by judges instead of a jury. States have penalties for frivolous lawsuits like New York where a lawyer can be fined as much as $2,500 for each frivolous portion of the lawsuit.