My last post commented on Washington’s Insurance Fair Conduct Act. The Act is up for public vote as Referendum 67. Check out the web sites advocating approval or rejection of the measure.
The “Approve 67” web site struck me as a bit demagogic–the main page shows a young girl clutching a teddy bear being comforted by (apparently) her father. The next shot is a man in a wheelchair, face cast sullenly downward. (Ostensibly suffering from insurance company malfeasance.) The final shot is a generic image of an emergency clinic. Then, under the “Take Action” column on your left there’s a link to “Share Your Insurance Horror Story.” (As of this writing there is a grand total of three “horror” stories.)
Under the endorsements tab, trial lawyers are notably absent–at least from the list. There are, however, multiple labor organizations as well as the Washington State Democratic Party. Under the “About Referendum 67” tab [with my comment]:
If an insurance company unfairly denies a legitimate claim, your only recourse is to sue. But if you win, the only thing they have to pay is the amount of the original claim [not true, just ask millionaire prankster dentist Robert Woo.] Referendum 67 creates an incentive [there already are incentives: coverage by waiver or estoppel, Olympic Steamship attorney fees and the Washington Consumer Protection Act (CPA)] to treat legitimate claims fairly by allowing the court to assess penalties if an insurance company illegally denies or delays payment of a legitimate claim.
Referendum 67 would help to ensure that the insurance industry honor their commitments to treat all policyholders honestly by making it against the law [it’s already against the law, silly–see the existing RCW and WAC] to unreasonably delay or deny legitimate claims.
The News Tribune in its story Let’s not try to fix an insurance industry that’s not broken says:
That the system is working well is illustrated by a storm of a different sort: the windstorm that smashed into Western Washington earlier this year. Within less than four months of the event, according to a recent study, 90 percent of the 42,000 claims were settled, for $170 million in compensation. Most of the remaining claims remained unsettled due to lack of qualified contractors or the time needed to rebuild homes. Only three complaints were filed with the insurance commissioner’s office.
I don’t know if I would characterize this legislation as a jackpot for trial lawyers, but it’s probably unnecessary and will increase the frequency of litigated first party claims at the greater expense of the insurance paying public. It’s up to Washington voters to get it right.
2 Comments
Jason Barney’s use of the text from the Tacoma News Tribune should contain a little more description about the section it was found in (editorials) and who it was written by (president of the chamber of commerce and a general contractor). Use of the word “story” implies that the article was written by a reporter or other unbiased source.
You may not like the pictures on the website, but your comment on the law is misplaced. I don’t think I’ve heard the Approve 67 camp argue that current laws don’t protect anyone from some unreasonable insurance company conduct. They are arguing that ALL unreasonable conduct should be subject to penalty by the court if the facts support it.
Current law also affords a claimant attorneys fees under the Olympic Steamship opinion, but that is case law and is subject to each court’s view. By codifying the case law, you can assure the insurance company will pay if they are found to be at fault.
The Approve 67 website has those pictures for one purpose, and one purpose only, emotional manipulation of the website’s visitors. The goal is to distract from the logical legal matter at hand, and move the debate into the emotional (which is of course a basic of persuasive technique). The hope is that visitors to the site won’t see though this, and will bite.
The Approve 67 campaign is clearly supported by the plaintiff’s trial lawyers — there is a link to it on their website, and I believe (but am not certain) that Sue Evans, who is listed as a contact person on the Approve 67 site, is a spokesperson for the trial lawyers’ group. The choice to leave the plaintiff trial lawyers organization off of the Approve 67 website as an endorser can be characterized as nothing but additional, dishonest manipulative tactics.
A couple of comments about Mr. Shaw’s post. First of all, because of what many view as unfair condo legislation that creates bases for lawsuits without regard to whether the built structure is sound, contractors’ insurance premiums have skyrocketed in recent years so they should be very interested in, and sensitive to, legislation that could lead to even more lawsuits and could drive their premiums even higher (and more contractors out of business when they can’t afford insurance in our litigious society).
However, the flip side of that is that contractors’ policies don’t always cover claims that are made against them — not because the insurers are acting unfairly, but because the policies simply insure a different kind of risk. Many claims are somewhere in between, where the insurers are initially uncertain whether there is coverage or not. So, contractors have a very strong interst in seeing that insurers treat their insureds fairly. Apparently, the contractor referenced in the above-posts has evaluated these needs and determined that the current system adequately protects against insurer abuse — just as lots of other insureds have concluded. As we all know, the groups are sharply divided on both sides of this issue.
One final comment regarding Mr. Shaw’s post. He asserts that codifying case law about attorney’s fees provides some greater protection, but it really doesn’t. The case law is exceptionally strong in this state in favor of insureds, and Olympic Steamship is well protected by the doctrine of stare decisis. Availablity of fees under this doctrine is extremely unlikely to end in our lifetimes, but even if it did there is already a statutory (i.e., a codified) basis for attorneys fees found in Washington’s Consumer Protection Act, as referenced in the Barney post. While the CPA is not precisely the same as Approve 67, it provides for an award of attorneys fees (among other penalties) for unfair or deceptive acts in trade or commerce that affect the public interest.