Maryland Injury Law Center
Back in January, I wrote about Allstate’s ongoing war with the state of Florida (and Missouri) in which it arrogantly racked up more than $4 million in fines for refusing to turn over documents they received orders to produce and which the insurance commission requested in Florida. On Friday, Allstate not only produced 150,000 pages of responsive documents it had protected as proprietary, but it made the documents available on Allstate’s website.
In defending some documents, a company spokesperson said that many lawyers misinterpreted the documents that refer to how Allstate deals with claims from other parties, not from policyholders. The Allstate spokesperson said many of the documents, the plaintiff’s personal injury lawyers picked apart, refer to claims-handling practices for car accident claims that have been incorrectly assumed to apply to homeowners’ policies.
If this is true, I see Allstate’s point. Accident lawyers whine about Allstate’s poor offers in third party cases. In Maryland car accident cases, I don’t think GEICO, Progressive, Nationwide, MAIF, or State Farm are making offers that are any different from Allstate’s. But that is not my point. The insurance companies have no obligation in third party cases to make fair offers. Insurance companies can do whatever they want. Therefore, we have lawsuits.
The reason insurance companies will not pay fair value on my accident claims is because two things have to happen before a bad offer turns into a lawsuit: (1) the accident lawyer has to file the claim, and (2) the plaintiff has to sue and wait for their recovery. Regarding the former point, accident lawyers who fear suing rarely tell their clients they will not sue. Instead, the lawyer tells the client it is a substantial offer and they should accept it. The main reason insurance companies make poor offers is because lawyers let them. That insurance companies—again in third party cases—have an obligation to be fair is as absurd as the notion that personal injury lawyers should have the goal of being fair. In the adversary system, if your goal is to be fair, you are doing your client a disservice. Not that you should not recommend fair settlements, but it should not be a plaintiffs’ lawyer’s goal.
First-party insurance cases where the insurer has a duty to their insureds to provide fair compensation for their injuries or losses are a different matter altogether. In these cases, I think there is ample evidence that Allstate has failed to meet their obligations and it would not surprise me if these documents intentionally blur the lines between smart strategies in third party cases where the insurance company has a legitimate aim to pay less than fair value on claims and first-party cases where the insurance company has a legal and ethical obligation to pay their insureds fair value for their claims.