When I was a kid, the sports stars of the day were Michael Jordan, Magic Johnson, Larry Bird and Dan Marino, to name a few. The commercials they starred in sold shoes, fast food and clothing. Fast forward to today, and the current stars appear in commercials selling insurance. Russell Wilson, quarterback of the Seattle Seahawks, starred in American Family commercials. Aaron Rogers of the Green Bay Packers did the “discount double-check” with State Farm. Chris Paul, NBA star, also appeared in State Farm commercials. And regrettably, because he guided my beloved Denver Broncos to a win in Super Bowl 50, Peyton Manning appeared in Nationwide commercials. Think of the most memorable commercials of the last five years. How many are NOT for insurance companies? You will have a hard time thinking of ANY. These advertising campaigns are memorable, so much so that we can make an impressive list off the top of our heads. Flo from Progressive. The Geico Gekko. Jake from State Farm. Liberty Liberty L I B E R T Y L I B E R T Y. Farmers’ “We know a thing or two because we’ve seen a thing or two”. Allstate’s “Mayhem” guy. Nationwide is on your side, and on and on.
These insurance ad campaigns have the common themes of fast, no-hassle customer service (Nationwide is on your side), and being able to save their insured money (“ I can save you, lots of money on car insurance”-Liberty). They convince the viewer that when you have an accident or something unexpected and unfortunate happens to your car or house, the insurance company will be there, in a flash, to give you everything you need. And, for the most part, this is true, at least in my experience. When my family has had to make claims due to damage to our vehicles or our house, the companies we’ve worked with have responded and paid the claim quickly and, for the most part, without any hassle.
This customer-oriented response does not occur, however, when a claim for personal injury is made. In fact, it is the exact opposite. Insurance companies seemingly try to do everything they can to avoid paying claims. They blame the victim. They claim the injuries aren’t as bad as the injured person says, or they say the injuries pre-dated the accident. They hire lawyers who file motions and take combative and intimidating depositions of claimants. Worse yet, insurance companies benefit from favorable laws. When you go to court on a personal injury claim, you are required to name only the insured, not the insurance company, as a defendant. This can make cases very difficult, especially in small towns where knowledge of the lawsuit is common and often times the sentiment is “why did (victim) have to sue that nice banker I’ve worked with for 20 years?” The reality, though, is that the nice banker who blew through the stop light causing the victim to suffer a broken femur is not controlling the defense; the insurance company is. That nice banker is not paying his attorney; the insurance company is. The attorney, in all ways but in a legal fiction, does not work for the client; she works for the insurance company.
When you get to trial on your claim, you and your attorneys are prohibited by law from even mentioning the existence of insurance, so as not to run the risk that the jury will think, correctly, that the insurance company has deep pockets. When it comes to trying to recover damages for your medical bills, the jury will be told that the reasonable value of the medical bill is of course not what a doctor or hospital says it is, but rather the amount that is actually paid on your bill. That’s right; those exorbitant health insurance premiums you pay every month in order to get the benefit of the insurance companies’ negotiated contracts with the health care provider are used against you when you make a claim for personal injury with no credit for the premiums you have paid. Instead, the wrongdoer gets the credit for your premium payments!
When you suffer injuries due to someone else’s negligent driving you may get payments from your insurance company before other insurance, such as your health insurance policy, pays. This is called Personal Injury Protection benefits or PIP. That’s great, because it results in you getting some of your medical bills paid along with lost wages you suffered from having to miss work due to your injuries. But guess what? Once you get a settlement or verdict, you have to pay those PIP benefits back. While health insurance companies in Kansas do not have a right to get paid back what they’ve paid to cover your bills, if you work for the federal government or have other federal insurance, you do have to pay those benefits back once you get a recovery, even if your State, like Kansas, prohibits such reimbursements to health insurance companies.
Given the number of television commercials featuring insurance companies and putting them in the best light possible, is it any secret why the law is rigged in their favor? These advertising campaigns are targeted at winning the “Hearts and Minds” of the consumer. They want you to feel protected and to believe your insurance company cares greatly about you and your family. That way, when you get sued for causing injuries to someone else, you won’t mind that they don’t just pay for a broken leg the way they just pay for a broken window. But when you’re the injured party, you might not appreciate it as much.
Beyond successful, and expensive, lobbying efforts that result in favorable legislation, the hearts and minds campaign has made people generally leery of lawsuits and suspicious of Plaintiffs. Who hasn’t heard of the famous McDonald’s coffee case? The case is mentioned so frequently in the discussion of the need for “tort reform” that it even made it into a country music song by Toby Keith: “spill a cup of coffee make a million dollars”. What Mr. Keith and others may not know, or want you to know, however, are the actual facts of that case.
Stella Liebeck, a 79-year old woman from New Mexico, purchased a $.49 cup of coffee from McDonald’s in 1992. In the process of adding cream and sugar, the cup collapsed into her lap, instantly scalding her genitals and causing her clothing to be burned on to her skin. She spent 8 days in the hospital and underwent skin grafting surgery. During the hospital stay she lost 20% of her body weight and she needed three weeks of post-hospital care. She brought suit for her medical expenses which were just over $10,000. She offered to settle the case for $20,000. McDonald’s (presumably, through its insurance company) counter-offered $800. McDonald’s had several opportunities prior to trial to settle for varying amounts and a mediator recommended a settlement of $225,000 before trial. McDonald’s refused.
After a ten-day trial, the jury awarded Ms. Liebeck $200,000 in compensatory damages and $2.7 million in punitive damages, after it was discovered at trial that the coffee was held at a temperature ranging from 180-190 degrees due to a deliberate choice by the company to sell hotter coffee than the cups it sold coffee in would hold. This was at least 40 degrees higher than what experts testified the standard temperature should be, and 20 degrees higher than the temperature at which various other food establishments kept their coffee. Evidence was presented showing at 190 degrees, third degree burns like Ms. Liebeck’s happen in three seconds. The punitive damage award was reportedly based on two days’ worth of revenue from coffee sales alone by McDonald’s. The court reduced this award substantially giving Ms. Liebeck a total verdict of $640,000.
So we have a company that makes billions off one product alone, and deliberately holds that product to a temperature that will foreseeably cause burns so severe they require skin grafting in three seconds, just to be able to say they have “the hottest coffee in town. “We have severe, permanent and excruciating injuries that require surgery and an extended hospital stay, yet this is the case used to tout tort reform, complain of “frivolous lawsuits” and write tongue-in-cheek country music songs about?
But, if you can believe it, it gets worse. I’m sure many of you have heard the one about the burglar who breaks into a house, falls through a floor and receives Two Million Dollars from the homeowner. A varying tale of the same theme has a burglar getting trapped in a home and having to eat dog food, for which he was handsomely compensated. Or the one where the guy insures his cigars against fire damage and then sues his insurance company after he smokes them. How about the hubcap thief who is injured when the car he is vandalizing drives off in the middle of the deed? All of these “cases” have certain things in common: all feature a thief or conman as a claimant; all feature a completely innocent victim as a defendant; and all have the thief or conman being rewarded extravagantly by runaway juries. They have something else in common: all are fictitious. Websites are devoted to debunking these tales and none of them have any shred of truth to them. In fact, these stories are written by an advertising agency, with no basis from any actual case. For years I have had this conversation with people who think there are too many “frivolous lawsuits.” I have invited anyone who can to show me actual cases that are as egregious as these apparently fake examples. No one ever has. One is left, then, with the question of why do these stories exist? Is it to discredit claimants who bring suits for personal injury? And if so, who would have the motivation to do this? Is it any coincidence that one of the biggest (and largest, and richest) proponents of tax breaks to billionaires (the company is in Kansas) also was a proponent of tort reform?
In a way, all of the insurance industries’ efforts at brainwashing and obstruction are counter intuitive. You would not believe the number of clients who have told me “if they just would’ve paid my medical bills we wouldn’t be here”. The result being the insurance company, almost always, ends up paying far more than what it otherwise would have had to pay had it acted reasonably, and done its job. What a novel concept: a company set up to collect money for the possibility that something bad happens that costs money, having to pay that money out when something bad happens that costs money. In the words of comedian Chris Rock, insurance should be called “in case sh*t happens.” You have insurance “in case sh*t happens. But if sh*t don’t happen, shouldn’t you get your money back?”
We have this “perfect storm” of events—insurance companies spending billions and using our favorite stars to sell insurance; urban legends about ridiculous lawsuit results and insurance industry-backed favorable legislation–that leads to a Plaintiff being extremely disadvantaged from the very beginning of a lawsuit. It results in jurors being poisoned against lawsuits before they are ever sworn in as a juror in a given case. And it prevents Plaintiffs from recovering fair compensation for their injuries.
This is why I am in this fight. I love the challenge of knowing the lawyers and other representatives on the other side do not believe my client. I love knowing they think they can use all of their tactics and tricks, learned over many years by thousands of attorneys, to defeat my client’s case. And I love seeing their face when they finally realize my client is telling the truth, that my client does have legitimate injuries that were caused by the negligence of the insured, and that this will cost the insurance company money. And I love having the knowledge that all of that could have been spared, had the company done the right thing to being with. But insurance companies rarely do the right thing until they have to. Insurance companies are not your friend.
Todd D. Powell is an attorney practicing personal injury and general civil litigation in Hays, Kansas with partner John T. Bird at the law firm of Glassman Bird Powell, LLP.