We all know that the corporations give their CEOs huge bonuses (some would say obscene) for the company’s profitability. Only in the last 30 years have we seen situations where CEOs still get these huge bonuses even without the company performing well.
This must be different for insurance companies.
“An insurance company owes its insured a duty of good faith” is a principle of law that has been in Florida for decades.
Here’s the actual language from the court case that establish this:
“The insurer [insurance company] must investigate the facts, give fair consideration to a settlement offer that is not unreasonable under the facts, and settle, if possible, where a reasonably prudent person, faced with the prospect of paying the total recovery, would do so. Because the duty of good faith involves diligence and care in the investigation and evaluation of the claim against the insured, negligence is relevant to the question of good faith.”
So insurance companies are supposed to give “fair consideration” and “diligence” in “the evaluation of the claim.”
Why are insurance companies different? Because there’s a different special relationship between you and your insurance company. If some something bad happens to you, somebody you trust will be there for you. Your spouse, significant other, family, best friend will come through for you because they’re family. Unlike family, the insurance company owes you nothing unless you pay it for insurance. What you have done is you transferred your risk to the insurance company. You transfer a risk of a loss, risk of injury or any risk of something bad happening in exchange for money (insurance premium). Insurance companies are supposed to know that risk it gets paid for and agrees to accept that risk.
You are trusting the insurance company to keep its promise and pay when something bad happens. When something bad happens, a person you trust (your spouse, significant other, family, best friend) has to come through. Insurance companies are getting paid to “come through.” So when something bad happens it has to pay. And pay fairly. Judges in Florida always and routinely require insurance companies to pay fairly the loss when this question arises in court. if you don’t file a lawsuit, however you don’t get a judge to enforce insurance company to pay fairly.
You trust your insurance company to pay fairly, right? How would you feel if you found out Your company was paying its adjusters to pay your claim unfairly?
Now we find, the lizard company, GEICO, just like a lizard, has been crawling around and paying it’s adjusters more money when they pay less on a claim.
Does that seem right? Here is the eye opening Federal court case where GEICO fought to cover up this lizard-like reward for adjusters not paying fairly like they are paid supposed to do under the court cases. Hines v. GEICO Indemnity Company Case No. 8:14-cv-1062-T-24 TGW.