Auto Accidents and Your Auto Insurance

During a recent radio interview, I was highlighting numerous websites where individuals can check information on insurance companies to determine if their own insurance company is worth keeping. I mentioned Consumer Affairs and checking the Ten Worst Insurance Companies article by the American Association of Justice. Also, discussed a boycott against the worst insurances suggested by FBIC (Fight Bad-faith Insurance Company).

The radio personality admitted to me that he had GEICO insurance and was content with GEICO. So my next question was, “have you had a claim with GEICO?” I knew the answer.

The Answer was NO. So I suggested he look up GEICO on Consumer Affairs and we noted that it only had 1 star. He read some of the comments and was taken back.

The point is, everyone is content with their insurance company until they need the insurance company to pay. Then and only then does one realize how a “bad” insurance company should have been avoided.

I recently came across another GEICO case that was shocking. Jennifer Lockwood’s vehicle was struck by a large van driven by a drunk driver. The drunk driver did not have insurance.

Luckily for Jennifer, she had un-insured coverage and also had medical payment coverage.

Unfortunately, Jennifer failed to do her research prior to electing GEICO.

Jennifer was treated for months. She suffered from injuries that included headaches, dizziness, and pain to her wrist, neck and back. The $10,000 medical payments was quickly exhausted. GEICO refused to pay the additional medicals under her un-insured policy because GEICO insisted on an overall settlement for the un-insured portion of the claim (this is normal in the industry). At the time, Jennifer did not have a personal injury attorney. So Jennifer paid her own medical bills out-of-pocket. She paid an additional $1,000 from her account and then took out a loan for $5,000 to continue with her medical treatment. She later admitted she had to stop her treatment because she could not afford it. However, her pain continued.

Once she requested payment under the un-insured policy, GEICO offered Jennifer an additional $750 to settle her un-insured case. The adjuster, who has no medical degree, simply claimed that the medical expenses were high. In other words, she was out-of-pocket more than $6,000 and GEICO was offering $750.

Of course, Jennifer retained a personal injury attorney. Soon, the offers were increased and eventually the case settled the policy contract portion of the claim for $25,000. However, the attorney still pursued GEICO under the theory of bad faith. The Alaska Supreme Court ruled that every contract has a covenant of good faith and fair dealing. The Court stated that GEICO’s actions of paying $750 failed to take into account Jennifer’s medical condition, connection to the accident, medical expenses, general damages and wage loss, and thus the $750 offer could be considered an “unreasonable behavior on the part of the insurer subject to the duty of good faith and fair dealing.” See Jennifer Lockwood v. GEICO, Supreme Court Opinion No. 6904 (May 2014).

The Lesson: take more than 15 minutes to pick your insurance company. Search the web. Pick an insurance that will protect you when and if the time ever arises. Also, if you’ve been in an accident, consider hiring an attorney who is experienced with dealing with insurance companies. Call us for a free consultation at 702-474-0404.