When somebody starts talking with you over dinner about which part of the brain makes you worry that something bad may happen to you and talks with sentences that seem to have "cognition" interspersed frequently with "cortex," you know to skip cocktails. The person speaking with me was Alaska attorney, Don Bauermeister. He is a person of study and reflective brilliance. We discussed how the techniques of insurance claim settlement and trial presentation can be studied and implemented for the purpose of helping our policyholder clients.
I often feel that I am very lucky. Somehow, that luck allows me to spend time and learn from those with extraordinary gifts and mental ideas that provoke new thoughts and positive change in my life. For the past several days, Don Bauermeister helped me deeply reflect about how to help my policyholder clients using common sense lessons, experiences, and theories.
Knowledge of how the brain works and instinctive human nature can significantly impact settlement negotiations and trial techniques. The better I become, the better the result for my clients. Since what virtually all clients want from an insurance claim settlement or trial is fair payment and the hope that what they are going through will not have to be repeated by other insurance customers, Bauermeister is helping to keep America a place where promises and legal obligations of insurance companies and their executives mean something. I want the same thing for our country, my children, and my clients. I put my money where my mouth is, by learning from and teaching with my colleagues every chance I get.
All attorneys should attend conferences where such information is taught, but few do. While most people believe policyholder attorneys are making a financial killing, insurance companies and their counsel know the vast majority of consumer attorneys make profits of less than $100,000 per year. Allstate Insurance Company had such a difficult time getting its adjusters to accept this truth, that it made a negotiation training videotape to prove it and suggest how to take advantage of the typical attorney’s financial pressures so that claims payments could be reduced. Has anybody ever considered why the offices of insurance defense counsel are so lavish and nice, while most typical consumer attorneys usually have very modest offices?
Recognizing that Bauermeister had something important to teach, the Insurance Bad Faith and Settlement Institute gave him 230 minutes of presentation time (they gave me only 60 minutes-though my audience had a lot more fun and stayed awake.) The problem was that with 40 minutes to go in his speech, Bauermeister had not gotten to the bottom line of how to use all that information in an insurance claim case. For those that know me, my impatience, and lack of shyness among friends, you could appreciate my hand up going up and saying, “Don, I love you man and all this is good. But, when are you going to specifically talk about insurance claims and bad faith litigation?”
It would not be fair to Bauermeister or to the Institute to write the notes I took over the next forty minutes in this post. Indeed, I strongly encourage everyone to order the tape and materials, as well as attend any speech Don Bauermesiter gives. This is the fourth time I have attended a speech of his, and he teaches better every time.
Imagine what happens when we tolerate insurance adjusters that are motivated to help insurance company managers and executives add to the insurer’s profits through claims practices that result in delayed payments, unfairly lowered payments and wrongful claims denials. Insurance companies should make profits, but not through wrongful claims conduct and at the expense of their customers who have valid claims. Insurance companies can market and honestly advertise as much as they desire to increase revenues and obtain customers. So long as it is legal and within acceptable regulator mandated guidelines, insurers should invest their money any way they want. Through actuarial studies and underwriting efforts, they can even select the types of risks and people they want to insure. Indeed, through actuarial studies they must provide to departments of insurance, insurers are guaranteed profits in the long term, so long as they do not blow their money like AIG.
But what happens if we allow insurance companies to unilaterally change their obligations and break written promises AFTER THE LOSS? What happens if they violate regulations and rules regarding the treatment of policyholders after a loss and nothing happens?
I think we all know the answer to those questions. It would be the same as if we never enforced laws that punish theft. I don’t know about you, but I do not want my family to live where others can steal with impunity. Important laws and regulations need to be enforced all the time.
One of the biggest problems we have is caused by many of my colleagues of the defense bar not recognizing that they have a role in making their clients aware of these rules and regulations. Violations of insurance laws and regulations are civil matters, not criminal; as such, it might be difficult for some insurers to recognize a wrongful act and the potential affect on a policyholder customer.
However, for the same reason I should not be representing clients who burned down their structure to collect insurance monies (I don’t), insurance defense counsel should not represent insurers when doing so would cause them and their clients to breach ethical obligations. This is a problem because insurance defense attorneys know the most litigous entities in America are their insurance clients that have a stable of willing counsel to choose from. As a result, some insurance counsel take any case even if it is to cover up violations of the insurer’s regulatory and contractual obligations. Many financial motivations run deep for the professionals that work for insurance companies.
Trials where insurers have delayed, low-balled, or wrongly denied claims are important to everybody. While my individual clients may be concerned about their case, these cases are important to everybody else because "we" could be next.
"We" need politicians who will make laws to protect us and guard against those insurers that advertise to appear "nice" but secretly violate obligations and rules when a claim is presented. "We" need judges who recognize that written promises and insurance rules concerning proper conduct must be followed all the time or it invites future harm. "We" need insurance claims managers and executives who understand we will not tolerate a society where dishonesty and repetitive rule breaking is financially rewarded.
We are all going to end up as ash or in a box at the end. I appreciate Don for reminding me why it is so important to be the best attorney I can be, to act passionately and courageously for people and society. I feel we are "lucky" the the Almighty allows us to learn important lessons from those so gifted.