The Case That Exposed Fraudulent Insurance Practices

Can we trust our auto insurance companies to protect the public when a motor vehicle accident occurs? These big bad wolf companies disguise themselves as public protectors, but when it comes down to protecting they look the other way. Auto insurance companies lie, defraud and steal from victims injured in motor vehicle accidents and leave them to fend for themselves.

If you have been injured in a motor vehicle accident the last thing you want to worry about is the auto insurance company. As an injured victim you are in pain and focusing all your energy and time on recovering. You entrust that they will give you the best possible settlement and do what they can to help. The reality is greed is a powerful thing and even if the auto accident wasn’t your fault, auto insurance companies don’t care. They will fight and argue against you or your appointed attorney to give you the minimum amount possible from the policy. They figure if the individual really is in pain, chances are they will seek medical treatment with or without their help. Personal Injury attorneys do what is within their power to ensure that their client receives just payment and compensation for their pain and suffering, damage to vehicle, and loss of wages if any. However, there are situations when insurance companies fail to disclose certain information about insurance policies and act in bad faith towards the victim and their attorney.

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Sioux Falls, South Dakota- Jeff Cole, a former attorney for a car crash victim, accused Charter Oak Fire Insurance of intentionally failing to disclose a $1 million policy that included uninsured and under-insured motorists. The victim, Laura Dziadek, was a passenger in a vehicle that had been loaned to her friend by Billion Motors (automotive dealership). Dziadek was clearly not at fault for the accident. She suffered severe injuries including a number of fractures to her back, ribs and other parts of her body. Dziadek was left to deal with her medical bills. Charter Oak Fire Insurance is owned by Travelers, the billion dollar insurance company with the little red umbrella as their logo. Travelers is the third largest writer of U.S. personal insurance (including auto) through independent agents such as Charter Oak Fire Insurance.  Laura Dziadek believes that Travelers purposely tried to hide the policy. Dziadek’s attorneys argued that Travelers engaged in a practice of bad faith. “Bad faith” by definition is the intentional fraudulent act of not meeting legal expectations or contractual responsibilities. Bad faith in regards to contracts can include deluding clients, entering into an agreement without the intent or means to fulfill it, or defy fundamental standards of integrity when dealing with others.  If an insurance company is proven to have acted in bad faith that can lead to further investigations, other lawsuits and millions of dollars in damages.

Travelers received a letter from Jeff Cole in February of 2009 requesting a “true and correct copy” of the Billion Motors insurance policy with Charter Oak Fire Insurance as well as the information page. That same month, a Travelers claims specialist sent a letter to Cole saying “no coverage for your client exists under this policy.” However, the copy sent to Cole by Travelers was incomplete. The copy completely excluded the section that made Dziadek eligible for under-insured motor vehicle coverage that is secured for up to $1 million. The jury found that Travelers acted with dishonesty and bad faith, awarding Dziadek with $750,000 in compensatory damages, plus more than $200,000 in interest.

Following the initial verdict, Judge Roberto Lange requested that the jury consider penalizing damages against the company. Judge Lange explained that the penalizing damages were meant to prevent the company from committing future wrongful acts. After many arguments and rebuttals back and forth from both Dziadek and Travelers’ attorney the jury returned with a verdict for an additional $2.75 million in punitive damages. Dziadek’s attorney expressed to the public that the verdict accomplished its goal of publicizing fraudulent insurance company practices.

The following are some of the many reasons why auto insurance companies feel that victims are not eligible for coverage and ultimately neglect to give proper compensation:

  • No other persons involved in accident had injuries.
  • Plaintiff had made prior complaints and received prior treatment to the same areas of his/her body allegedly injured in the accident and his/her complaints after the accident hadn’t changed.
  • Act of God or unknown reason was responsible for accident.
  • Plaintiff’s complaints to doctor were bizarre, exaggerated, and lengthy per medical records.
  • Plaintiff had poor attendance record at work prior to accident.
  • Plaintiff has verbal difficulty describing events surrounding the accident.

The battle against auto insurance companies for fair compensation is far from over. Motor vehicle accidents transpire daily. Financial institutions need to follow the rules and most importantly be honest and upfront about their policies. These rules and policies are there to protect those injured and any act of bad faith or excuse will not be tolerated.

If you have been treated unfairly by your insurance company, Millin and Millin is here help. We have a track record of going up against the big bad wolf insurance companies and successfully getting fair compensation for our clients. Schedule an appointment today in our McAllen office to find out how we can help you with your claim.