Like perennial flowers, opinion pieces feigning insurance-industry despair continue to sprout. But there are other opinions, and even real facts to consider when it comes to the insurance industry's long-standing practices of lowball monetary offers coupled with one-sided terms in their onerous release agreements.
First, the law. Contrary to claims made by some, the law is not "needlessly complex." The law requires only that insurance companies act reasonably under the circumstances when they receive a valid offer to settle a claim against an insured.
There is the added principal that "an insurer must treat the interests of its insured with the equal consideration," but this is not needlessly complex in light of the rationale for the rule: both the insurance company and the policyholder have interests at stake when a claim is made, but the insurance company makes all the decisions as to whether to settle that claim.
Thus, insurance companies cannot take unreasonable risks with the financial well-being of the people they insure by failing to settle when they have a reasonable opportunity to end the case once and for all. See U.S. Fid. & Guar. Co. v. Evans, 116 Ga. App. 93, aff'd, 223 Ga. 789 (1967) (ruling insurer must "give at least equal consideration to the interest of the insured").
The insurance industry argues that demands to settle are setups, "complete with vague and confusing conditions and shady releases …" (Sept 7, Daily Report.) But wait a minute – if these demands are so nefarious, can they possibly be the "reasonable opportunity" to settle that forms the basis of a bad faith or negligent failure to settle case?
The industry's argument competes with itself in a way that makes it meaningless – even circular. If the demand is truly vague, confusing and shady, a unanimous 12-person jury would not conclude that the insurance carrier should have accepted it. Don't worry State Farm, Allstate, Progressive, and XYZ Ins. Co., Georgia law and the legislature already have you covered.
The Holt rule continues to encourage settlement. One need only imagine the world of insurance claims without it. Even with the rule requiring equal consideration of the policyholder's interests, insurance carriers are seemingly forever willing to risk the financial well-being of their policyholders by making lowball offers and insisting on one-sided terms.
If you have ever read a release offered (often insisted upon) by insurance carriers, you know they require the injured party to pay attorney's fees if a third party makes a claim against the settlement, their own favorable choice of law and venue, and many other terms designed to satisfy the insurance carrier's self-interest.
To hear the industry tell it, "it's OK for us to drive terms favorable to our financial best interest, but when the injured party makes demands, they must be "shady." How about we let a little sun shine on that proverbial shade so we can see what has and is really happening in the lucrative world of insurance claims? Lucrative for the insurance companies, that is.
Let us remember, the property, casualty and direct insurance realm is a highly profitable $826 billion industry (visit https://bit.ly/48rYQVA for details). One need only watch a single college football game to see that insurance companies have millions to spare on quarterbacks and clever commercials to hawk their products. Insurance companies are not hurting.
Having said all of this, some of the insurance defense lawyers' opinions regarding suggestions to their insurance clients are solid. We can all agree that creating better procedures for handling claims and demands while improving insurance adjusters' knowledge and training is essential. We have advocated for such changes for many years.
The lack of training, along with the overload of claims assigned to each adjuster, makes for sloppy work and inevitable negligence and bad-faith claims handling. Everyone involved would benefit from more efficient, thoughtful and compliant claims handling. These better practices will settle claims more efficiently and will certainly benefit the carriers and claimants alike.
What certainly will not create better claims-handling is to further protect insurance companies from their own negligence. Truck drivers, attorneys, landscape architects and all other professionals are subject to civil action when they negligently cause harm. The insurance industry's constant plea for special treatment under the law and immunity from negligence should fall on deaf ears.
As for criticisms aimed at the civil justice system, appellate judges and the legislature, we suggest that the efforts of the insurance industry be turned inward. Your already-ballooning profits are up, your lobbyists have achieved unprecedented "success" in creating OCGA 9-11-67.1 out of whole cloth, and the battery of excellent law firms and attorneys representing you place your industry in a dominant and powerful position that even the most ambitious megalomaniac would admire.
So enough complaining already. The insurance industry is strong, the sky is not falling, and people injured or families who have suffered a wrongful death are far from having the upper hand.
Jay Sadd and Rich Dolder are trial lawyers at Slappey & Sadd in Sandy Springs and are co-authors of the treatise "Insurance Bad Faith: The Law in Georgia," soon to be in its fourth edition.
Editor's note: This column was written in response to "Good-Faith Considerations for Bad-Faith Insurance (Holt) Litigation in Georgia," a Sept. 7 guest column written by four Alston & Bird attorneys. To read that column, visit https://bit.ly/48dl9hA.