Insurance Defense Attorneys
Lawyers don't usually have a lot of downtime, but very few attorneys have schedules as busy as insurance defense attorneys. Thanks to an explosion in US law, the number of insurance products for sale, and the complexity of insurance policies, more so than ever, insurance defense attorneys are busy professionals.
Insurance defense attorneys can work for both private citizens or insurance companies in aiding understanding of legal codes and requirements as well as helping defend against lawsuits. Most commonly, insurance defense attorneys work with car insurance companies in defending the insurance company and their customers against lawsuits surrounding injuries and damages sustained from an accident.
The Role of the Insurance Defense and Insurance
Understanding the role of an insurance company, legal defense, and the protocols for filing claims and lawsuits will help us better understand how insurance defense lawyers fit into the picture.
When a claim is filed against your insurance, the insurance company will often do a small investigation, then after discovering that the claims are legitimate, make a payment equal to the damages that is in compliance with your contract. For instance, if you were to have $50,000 in property damage protection in your car insurance policy and you were to run into a building, creating $15,000 in damages, the insurance company would investigate the claim, then send a payment for $15,000 to the person or business who incurred the damages.
This system works very well for smaller amounts of money, where the investment in investigation or fighting a claim (at least for the insurance company) isn't economical. For instance, a $700 claim on a fender bender accident isn't worth investigating, since the company may spend tens of man hours in the process, and spend more in general investigation than what the claim is actually for. You wouldn't spend $500 to investigate a theft of a $5 bill, would you?
But when the damages become large, there are often disputes about how much the insurance company will pay. Say, for instance, you were involved in an accident with another person and you were at fault. The person you ran into claims $5,000 in legitimate property damage, but also $50,000 in legal bills, and time and travel to meet with doctors and get second opinions. Your insurance company, seeing that the accident happened on a low-speed thoroughfare, decides that $50,000 in medical bills could not, in any way, be associated with such an accident.
The insurance company then denies the claim, saying they'll pay only for the $5,000 in property damages since the medical, loss of work, and travel costs cannot be substantiated. The other party, sensing they were ripped off, decides to sue your insurance company for the remaining $50,000 in unpaid liability.
This is where the insurance defense attorney is hired by your insurance company to fight on your behalf. Through a series of lawyer-to-lawyer negotiations, the insurance defense attorney may seek to lower the total amount paid in damages, or instead proceed all the way to court, where a judge and jury will hear the elements of the case.
Using Legal Defense in Your Benefit
What many people fail to realize is that the legal defense afforded by their insurance company is actually a benefit to themselves personally. The legal defense costs nothing out of pocket (except for the monthly insurance premium) and may help reduce insurance claims, ultimately reducing your monthly premium. This is why financial planners often recommend high value insurance in order to make suing the insurance company more “legally appetizing” than suing the individual.
The best benefit is that your insurance company's legal defense will help protect your own assets, as well. Imagine if you had $100,000 in coverage, and another party claims you caused $500,000 in damages. Should those damages be deemed reasonable, you would be on the hook for $400,000 over and beyond your insurance coverage, and could lose ownership of assets including retirement funds, savings, even your home.
However, thanks to your insurance company's legal defense, it is likely that their lawyers will dispute the claim, enter into negotiations or a full legal trial, and evade paying out completely or reduce the total amount owed. If it is settled out of court for $80,000, for example, you would owe nothing out of pocket, and your insurance company pays $20,000 less than originally expected, a win-win. Often, these settlements are reached with the understanding that no further suit can be brought against the insurance company or you, its customer.
While attorneys and practicing lawyers have slowly earned a bad reputation among the public, insurance defense attorneys provide a valuable skill: keeping claims honest and fraudulent payouts low. While many think insurance provides only one service: paying out when claims are made, insurance companies also provide legal protection when you need it most.