Did you know the attorney your insurance company assigned to solely defend your legal and financial interests after a car accident is, quite probably, a full-time salaried employee of your insurer with competing loyalties to the insurer?
How can this be legal? Sadly, believe it or not, in Florida it is.
Doesn’t the lawyer defending you after a car accident in Florida owe you undivided loyalty and a fiduciary duty? The short answer is – not always.
This is because Florida law allows something called a “tripartite relationship” – a legalized way of describing what, in actuality, allows your insurer to benefit at your expense from being part of a three-way relationship between you, your insurance company, and the attorney it assigns to defend you.
Worst of all, it frequently appears on the outside to the attorney’s clients – insureds just like you – as though there’s no inside connection between the insurance company and the lawyer assigned to defend you. In reality, nothing could be further from the truth.
The scenario typically plays out like this – you (or a family member) is involved in or negligently causes an automobile accident and someone is injured. Your insurer is responsible under your policy for settling a claim made against you for the bodily injuries or damages. However, your insurer decides it doesn’t want to honor the terms of the policy you purchased and settle the claim against you just yet. Instead, the insurer wants to save money and try to settle the claim for as little as possible. As a result, the insurer delays, requests additional medical records from the injured party, questions causation, delays again, requests additional medical records, and so on. The insurer argues about whether medical care was actually required, whether a given injury reaches a threshold of permanency – or whether any aspect of the injury could have possibly been caused by something other than the accident. The insurer places surveillance on the injured party (yes, insurance companies routinely do this). Your insurer doesn’t like the opinion of the treating physician, so your insurer hires another doctor (a non-treating physician routinely paid large sums of money by your insurer to render an opinion favoring denial of payment on a claim). This list can go on and on.
Eventually, the injured party gets fed up with the insurer’s delay tactics and files a lawsuit. However, the lawsuit filed by the injured party isn’t filed against your insurance company – it’s filed against you.
This may come a surprise, especially when you get a personal visit by a process server who hands you legal papers, informing you you’ve been named as a defendant in a lawsuit related to the accident. All the while, you assumed your insurance company was “taking care of it” – or even worse – you heard nothing from your insurer at all.
You get a dreaded call from your insurance company confirming that you’ve been sued. But, no worries – your insurer informs you – we’ve hired a capable lawyer to defend you. This lawyer will be contacting you independently to set up a meeting to discuss the details of your defense. What your insurance company doesn’t tell you, however, is that the lawyer (and often his or her entire law firm) is actually a full-time, salaried employee of the insurance company.
The lawsuit against you drags on in the discovery phase, sometimes for months or even years. This phase often includes meetings, depositions, and other stressful and time-consuming activities which you are required to participate in as the named defendant. All the while – as I have seen over and over again – your interests as the insured in being protected against the claim come second to the interests of the insurance company in saving money on settlement of the claim. It’s really not all that surprising when you know the back-end of the story – your insurance company butters the bread of every attorney (and staff person of the firm) they hired to defend you. This attorney is employed by the insurer, receives benefits from the insurer, and likely even receives bonuses from the insurer if successful in saving money on any settlement of your claim and other claims like the one against you.
Meanwhile, your attorney gets paid salary and benefits by the insurer whether you win or lose the lawsuit. Moreover, if the insurer bets wrongly, and you end up losing the lawsuit, your insurance company stays protected up to the limits of the policy you purchased.
As for you, the insured? If you lose the lawsuit, any monetary judgment entered against you over and above your policy limits comes out of your pocket. In other words, unfortunately you end up paying the price if your insurance company bets wrongly and the lawsuit it failed to settle is ultimately decided in favor of the injured party.
Know This: You have an unqualified right under the law in Florida to speak to an independent attorney of your own choosing to make sure the lawyer your insurer assigned to handle the claim against you is actually doing his or her job and protecting your interests (not the insurer’s).
By the way, that’s another thing I’ve repeatedly seen not frankly disclosed by the insurance company or their full-time, salaried lawyer now representing you – you have a right under Florida law to consult personal and independent counsel about the way you are being treated and the way in which the claim is being handled. Not only that, under Florida law you may have a potential cause of action against your insurer for insurance bad faith if the case proceeds to trial and a judgment is entered against you. No wonder the insured in this scenario is all too often improperly advised by the insurer not to speak to another attorney.
A Final Word: Not all insurance companies insuring Florida drivers operate in such a manner. I have been involved in claims where insurance companies and their employees have acted with due regard for the interests of insureds and attempted to fairly and honestly settle claims when given the opportunity to do so. However, I have also seen certain insurance companies employ the same dishonest and unfair bad faith tactics again and again, all for the sake of saving their employer and your insurer money.
Insurance bad faith can occur in any context, not just in the automobile accident context. If you have questions about whether your insurer is honestly and fairly protecting your interests in handling a claim that has been made against you, contact us for a free consultation. We can help.