Is your car insurance company dependable in the event of an auto accident? Most people probably think so, but the reality can be rather shocking. Insurance companies are often out to maintain their bottom line. So, if the interests of the insured do not match up, insurance companies have no problem delaying or denying coverage as one did in a California federal court case.
Why You Should Be Cautious About Signing an Insurance Settlement
It was October 2017 when an employee driving a company vehicle was hit while crossing an intersection. Under normal circumstances, the other driver’s insurance would have handled the damages and medical costs. However, the other driver was underinsured, forcing the employee to rely upon his employer’s insurance to handle the cost of his medical treatment.
The man’s employer maintained underinsured motorist (UIM) coverage, so it appeared that his medical bills would be covered. However, delays in the process forced the employee into arbitration with his employer’s insurance company. This out-of-court legal proceeding came to a conclusion when the insurer agreed to pay $699,999 for the employee’s medical costs. The employee signed the negotiated settlement release, but there was a detail he missed.
After settling the case, the employee realized that the insurer may have intentionally delayed the processing of his claim. This meant that the insurer had broken the covenant of good faith, so the employee decided that he needed to take legal action.
He filed a claim citing the insurer’s poor investigation of his claim as well as the refusal to release policy benefits in a timely manner. Such actions were a violation of the insurer’s contract with the employer, but there was a snag. The insurer petitioned the court to dismiss on the grounds that the man had waived his right to further legal action.
Hidden within the settlement release the employee signed was language that shielded the insurer from further legal action. After reviewing the release, the court agreed with the insurer’s motion and dismissed the employee’s lawsuit.
When negotiating with an insurance company, it’s important to remember that they do not always have your best interests in mind. This is why insurers often make low settlement offers, delay claim processing or force the insured into a legal dispute. Protecting your rights with experienced legal help is very important, especially when it comes to the language in a contract. Don’t hesitate to consult an attorney before you start negotiations with an insurance company.
Brought to you by the car accident lawyers at Bohn & Fletcher—protecting your interests when facing auto insurance companies.