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Since you are reading this article, I assume that you have been sued and that your insurance company has provided a lawyer to defend you in the case. Since your insurance company is providing a lawyer for you, why would you need to hire a lawyer? You may be surprised. Let’s go through just a few of the many reasons you should speak to an attorney that is experienced in insurance law.
Punitive damages
If the plaintiff in your case is seeking punitive damages, your insurance policy probably does not provide coverage for them. Only in a very, very limited situation does Oklahoma law allow an insurance policy to cover punitive damages. It actually makes sense. Since punitive damages are supposed to punish the wrongdoer, there wouldn’t be much punishment if the insurance company had to pay the punitive damages instead of the wrongdoer. But do you need to hire your own lawyer since the insurance company is providing you with an attorney?
Just like the rest of us attorneys are humans that have bills to pay, mortgages, children and spouses to support. They count on their law practice to earn money to keep up their lifestyles. Insurance defense lawyers (the term used to describe attorneys that are hired by insurance companies to defend their insureds when they get sued) are generally of two types: 1) attorneys that are employees of the insurance company (often called captive attorneys or in-house attorneys); and 2) attorneys in private practice that specialize on defending people for insurance companies—their livelihood is dependent on their insurance company clients hiring them to defend cases filed against the insurance company’s insureds. If they don’t keep the insurance company happy, the insurance company won’t send them more cases to defend and they then don’t make a living. The insurance company is paying them (usually a set hourly rate) to defend you in your case. Technically, your insurance defense attorney is your attorney. However, under the terms of your insurance policy, the insurance company gets to control the defense. This puts the insurance defense attorney between a rock and a hard place. He is supposed to be devoted to you and your best interests yet he is being controlled and paid by the insurance company. If he loses your case and you have to pay the punitive damages out of your own pocket (since they aren’t covered by your insurance policy), your insurance defense attorney will continue to receive cases from the insurance company. So whose side is he really on? Let’s look at other situations.
Excess Verdict
Let’s assume your liability policy limits are $25,000.00. If a jury awards $325,000.00 in damages, your insurance company will write a check for the $25,000.00 policy limits and the plaintiff’s attorney will go after you for the remaining $300,000.00. He’ll garnish your wages, attach your property and have it sold at Sheriff’s sale, etc. until the remaining $300,000.00 is paid. However, there are circumstances where that $25,000.00 policy limit can, in essence, become the $325,000.00 verdict amount. Unfortunately, your insurance defense attorney doesn’t want to talk about that because the insurance companies do not want you to know how that can be done. Who is your insurance defense attorney loyal to? (Hint: who pays his bills?)
Policy Limitations and Exclusions
Frequently, an insurance company isn’t sure if the claims against you are claims that are covered by your insurance policy. The claims may be covered or they may not be covered. There may be an exclusion in your policy that excludes coverage for some or all of the claims being made against you. Again, your insurance defense attorney is in a conflicting situation. Does he try to tailor your defense to go toward claims that are covered by your insurance policy? That wouldn’t make the insurance company that is paying him very happy. The insurance company would prefer that the case be tailored to go to the exclusion so that it doesn’t have to pay money if you lose your case. Your Independent Counsel can make sure your defense is tailored for your benefit, not the insurance company’s benefit.
Independent Counsel
You may want to consider hiring your own attorney to be your Independent Counsel. Your Independent Counsel should be experienced in insurance law, representing plaintiffs as the plaintiff’s attorney and representing defendants as an insurance defense attorney. (Yes, the Scott Ray Law Firm has all of that experience and has been retained to be Independent Counsel in numerous cases). Your Independent Counsel only has loyalty to you (after all, you are the one who is paying your Independent Counsel—remember who is paying your Insurance Defense Counsel?). Your Independent Counsel can pressure your insurance company to do what is best for you (not what is best for the insurance company). He/she can help protect you from an excess verdict or punitive damages. He can make sure that your insurance company is following the laws pertaining to insurance policies and insurance companies. Your Independent Counsel can also sue your insurance company if it violates its legal obligations to you and places its interests over you. For example, what if the plaintiff in your case offers to settle the entire case (including the punitive damages claim) for your $25,000.00 policy limits and your insurance company refuses to settle for that amount. If the facts in your case show that a reasonable insurance company acting in good faith would have settled your case, your Independent Counsel can sue your insurance company on your behalf so that you are, hopefully, protected from having to pay the $325,000.00 by making your insurance company pay that judgment despite the fact that you only had policy limits of $25,000.00. You should give serious consideration to retaining Independent Counsel in your case.
