In nearly every case we handle, we are dealing with an insurance company on the other side. On one hand, that is a good thing – it means that there is someone who can pay for our client’s damages without having to try to collect from the personal assets of an individual or business. In another way, however, it can actually represent an impediment to the prompt resolution of a case.
Insurance carriers have become so large and powerful that they can delay and obstruct claims almost with impunity because the “penalty” they might pay for their bad acts is never significant enough to deter them. Whether that penalty is paying more for a claim when a jury enters a prudent verdict, or having a judge sanction one of their lawyers for unprofessional conduct, or the attorney fees and costs they shell out to defend even a clear-cut claim, it is all a cost that they can well afford.
Few people outside of the profession have an appreciation for how gigantic insurance companies have become. Here’s an example for a little context: recently, Forbes magazine published a list of the wealthiest families in this country. The Walton family, of Walmart and Sam’s Club fame, finished first. Currently, all of the family members behind our country’s largest employer, together, have assets of $152 billion. Sounds impressive, doesn’t it?
That wealth would not even put them in the top dozen on a list of US insurance carriers, however. Metlife, Inc., the nation’s largest insurer, has total assets of just over $890 billion. It pays out billions in claims every year! A payment of $100,000 on a particular case represents less than one one-thousandth of one percent of annual claims. With that kind of size, you can be a heavyweight bully. And we’ve seen carriers try. As one smug adjuster said to me, on a case years ago, “Wise up. It’s like you’re some guy with a checking account and you’ve decided to take on the bank!”
Well, we don’t agree with that cynical viewpoint, but we do believe there are things that could be done to put this claimant/carrier relationship back into some sort of balance. Nation-wide, plaintiffs’ attorneys need to be more willing to fight insurance carriers in court. If carriers are paying more to defense lawyers in tens of thousands of cases across the country (instead of the far more limited number at present ) they will likely become more accountable in their claims practices and work to resolve more cases early on. State insurance regulators need to beef up enforcement and impose stiff penalties when carriers engage in abusive claims practices. And just as “too big to fail” has become “too big to regulate” regarding our nation’s banks, we believe that Congress ought to examine the growth of insurance carriers. At current rates of expansion, we will see a half dozen or more US insurers with total assets of more than a trillion dollars, by the end of the decade. We don’t believe that is a healthy trend for consumers, premium-payers, or injured claimants.
In the meantime, we will continue to do our part by trying the cases that need to be tried and working for justice for our clients.