One new bill that came out of Annapolis this year, and is set to become Maryland law on October 1, 2007, is aimed at limiting one of the predatory insurance practices: the “don’t hire a lawyer and I’ll give you a quick settlement” tactic. Among the major auto insurance carriers in Maryland, I do not see GEICO, Allstate, or State Farm doing this aggressively or systematically; Nationwide does it a good bit; and Progressive does it with absolute zeal.
This bill will not limit the practice itself but it will give injury victims not represented by a Maryland lawyer the opportunity to void any release signed within 30 days of an accident within 60 days provided certain conditions are met such as providing written notice and, of course, returning the proceeds.
To Progressive’s credit, it does not appear that they are nearly as aggressive in very serious injury cases, but it amazes me to hear from my personal injury clients the lengths to which Progressive will induce quick settlements in smaller cases. Progressive adjusters show up on the injury victims’ doorstep (apparently every adjuster is smiling and friendly) with a checkbook eager to “make this thing right.”
Most lawyers do not want to admit this, but while it is always the safest play to contract an injury lawyer after an accident, smaller injury cases can often be settled without a lawyer. Personal injury lawyers do add value to smaller cases but often it is not much more than the contingency fee the lawyer charges. Because insurance companies generally put a value on the quality and reputation of a plaintiff’s personal injury lawyer, I think our law firm adds value well above our fee in small personal injury accident cases. But do you need to hire our law firm or another lawyer in smaller cases? I think it depends on the case but, often, the answer is no.
I certainly have respect for Progressive as an insurance company. I like almost all of their adjusters and I do not think this “quick settlement” practice is unethical; however, in my opinion, this is the last insurance company I would expect to make a reasonable offer in a “quick fix” situation. If I were to give all of the major insurance carriers in Maryland the exact same case, I would expect Progressive’s offer to be the lowest. It is generally a struggle for victims with or without personal injury lawyers to get Progressive to offer fair value without filing a lawsuit.
Early on in the development of the case point no one knows the actual value of the case because the extent of the injuries and the harm from those injuries is still unknown. Accordingly, almost invariably, any early settlement is imprudent. Why do people take a quick settlement then? Because some injury victims are either naïve or they need money fast. Arguably, then, this new Maryland law could go further and make all quick settlements voidable. To what extent should society protect people from themselves? This is a political and philosophical question beyond the scope of this blog, but I think this law probably strikes the right balance by providing some protection for accident victims while also giving insurance companies some ability to rightfully be able to settle smaller personal injury claims without waiting for an indefinite period of time before they can close the claim.