Insurance Premiums Jump Due To Growing Claims
No matter where you look — the newspaper, TV, billboards or phone books — you can’t miss this advertising. “Have you been in an accident? Then contact us NOW.” Red hot headlines fill pages in the phone book and accompany pictures of injured victims. Ads offer free help until the suit is finished. Short term loans, secured by future settlements, have even been offered those in need.
An insurance bureau is claiming that such advertising, made by personal injury lawyers, is driving up claim cost. Some companies no longer offer motor insurance because of the growth in claim cost. These companies say that people come in with a small amount of damage on their vehicle, will file a lawsuit, and will be granted a huge monetary award. The insurance company supports paying people for their actually injuries, but she says the claimants expect a lot more money than they really deserve.
Different companies are being affected differently in terms of how much the claim costs are driving up their premiums. Anyone who has insurance is seeing an increase in their premiums from 15% to 30%, and that rate is for the good drivers. Your increases will be even higher than that if you are one who is unfortunate enough to have experienced an accident or highway traffic offense.
Lawyers say there’s no link between their advertising and the increase in claim costs. One lawyer claims to not understand the link the insurance bureau draws between number of claims made and the number of such ads in the area. This isn’t trying to imply that people shouldn’t be able to get compensated for personal injuries, because they should be able to. The offer of short-term loans on the promise of future claims may be a violation of the lawyers? code of ethics. Law associations are researching this.
There are other attorneys who do believe that the onslaught of advertisements by plaintiffs’ tort attorneys brings people out of the woodwork who are interested in suing. Though he does not necessarily see that as troubling. “The unfortunate thing about all this is the fact that the insurance bureau is trying to put a negative face to lawyers who are trying to let people know they have a right to compensation!” The attorney acknowledges the increase in cost to the insurance carriers, and does not dispute the notion that reform might be useful, but states also that the industry group has refused to collaborate with attorneys to solve problems.
Accident prevention is where the focus of the insurance industry should be, says the president of a bar association, in order to reduce the costs of claims. The attorney added that he is not aware of any industry efforts at raising traffic fines or banning cellular telephone usage by motorists. He further articulated his irritation that the insurance carriers were not attempting to increase auto safety or reduce collisions. He recognizes that the insurance companies have had to use up a lot of their investments as well as some of their profits.
Insurance is lobbying hard for legislation that would stop motorists from ?double dipping.? Some claimants want the other guy to pay for their lost work time, even though their own companies have reimbursed them already for this same time. No deductions have been taken, including those for income tax, so the claimants would receive gross wages. This is not good. This doesn?t create a situation where the employee would want to get back to work. A longer absence from work means a higher pay off.
Even though there is no solid number on how many personal injury lawyers are in practice, it is doubtful that there is any other place that have such lawsuits. While most let claimants seek payment for pain and suffering, some require that the injury sustained be permanent and serious for such a payment. The insurance bureau would like you to see that the advertising is creating the demand, but the exact opposite is true. Lawyers should be allowed to work for free for claimants until the case is settled; they should also be allowed to offer to pay for any disbursements if the case is lost.
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