Your Insurance Company's Duty to Protect You

When you are involved in an automobile accident that may have been at least partially your fault, your auto insurance carrier has an obligation to protect your interests if a claim is made against you.  The problem that often arises is the conflict of interest your carrier has with you.  Insurance companies are in the business of making money, but they are still supposed to put their insureds' interests ahead of their own.  Unfortunately, all too often auto insurance companies tend to ignore this obligation which can have serious personal and financial consequences for you.

The Duty to Defend

After an automobile accident occurs, the involved insurance companies will make at least some preliminary determination of fault for the accident.  If you are determined to be responsible for an accident and someone else's injuries, your insurance carrier has a duty to defend and indemnify you in the event of a claim.  What this means is that your insurance company is obligated to make a reasonableeffort to settle the claim against you, and they must pay the claimant (the injured party) for the injuries and damages they suffered.  This is precisely why you pay premiums for your auto insurance, month after month and year after year.

The Conflict and the Insurance Company's Obligation to You

Under California law, "[n]o insurer shall attempt to settle a claim by making a settlement offer that is unreasonably low..."  (10 California Code of Regulations § 2695.7, Standards for Prompt, Fair and Equitable Settlements)  Beyond this duty, every insurer has an obligation to attempt in good faith to settle claims within their insured’s policy limits, if that can reasonably be accomplished.   The duty to settle is imposed as a matter of public policy. "The implied obligation of good faith and fair dealing requires the insurer to settle in an appropriate case although the express terms of the policy do not impose such a duty."  (Communale v. Traders and General Ins. Co., (1958) 50 Cal. 3d. 654, 659)

What happens when an insurance adjuster makes an unreasonably low offer to the injured party?  You (and not the insurance carrier) wind up getting sued in court.  If that happens, the lawsuit against you becomes public record, and the information concerning the suit  is almost instantly available to potential creditors, prospective employers, etc.  Beyond this, you will be the one who has to be directly involved in the litigation process (answering written discovery, sitting for a deposition, appearing in court, etc.).  If your insurance carrier unreasonably fails to resolve a case against you then you may have a cause of action against the insurance company for breach of contract and bad faith.

If you have been sued in court because your auto insurance carrier has placed their own economic interest ahead of yours, you should contact an insurance bad faith attorney for a free consultation.

Minor Injury Accidents and Insurance Bad Faith

Late last night the diver of a Lexus traveling westbound on the 91 Freeway escaped serious injuries when a big rig trailer toppled over on their car.  According to KNBC News, the accident happened near State College Boulevard in Anaheim at about 11:30 p.m.  The trailer was carrying roughly 32,000 pounds of alfalfa when the accident occurred.  The dramatic photo of the accident scene shows just how lucky the driver was to survive the crash.  The truck driver was uninjured.

Cause of the Crash

While the precise cause of the crash has not yet been released, the law generally requires that truck drivers carry loads that are safe and do not present a hazard to the public.  For example, the Federal Code of Regulations requires truck drivers to ensure the loads they are carrying are safe from shifting or falling (Code of Federal Regulations, Title 49, §393.100).  In the case above, it is possible the 32,000-pound load shifted during a turning maneuver, causing the trailer to topple over on the Lexus.  It is unknown, however, what role, if any, the car's driver had in the happening of the accident.

Insurance Issues With "Minor-Injury" Accidents

The approach insurance carriers have taken over the years toward "minor injury" accidents has changed, and not for the better.  This new and more "stingy" approach has likely increased the number of lawsuits filed within the State of California.  The insurers now typically offer less compensation to victims which leads to a greater likelihood a lawsuit will have to be filed to resolve the claim.  Aside from court congestion, this also creates a potential problem for people trusting their insurance company to protect them.  For example, with the internet accessibility of court records now, anyone sued in relation to an automobile accident will have their name listed on a court's website.  Prospective and current employers, creditors and prospective creditors can now access this information, which could prove very harmful to those people the insurance companies are paid to protect, their policy holders.  Should an insurance company's bad faith approach lead to their policy holder's lost job or loan opportunity?

SOURCE:  Driver Rescued From Lexus With Big Rig Trailer on Roof, NBC News, Southern California, January 20, 2013, by Jonathan Lloyd