Texas Supreme Court: Drivers must sue insurance companies to collect on uninsured motorist claims

Court rulings could affect uninsured motorist coverage
Drivers may end up with tougher legal fights on insurance claims.
By Chuck Lindell
AMERICAN-STATESMAN STAFF
Saturday, February 24, 2007

A little-noticed Texas Supreme Court decision, released three days before Christmas, could make it far more difficult for drivers to collect on their uninsured motorist coverage, plaintiffs lawyers warn. The ruling gives insurance companies incentive to deny payments, forcing Texas drivers into lawsuits that could cost more than $20,000, the amount that most insurance plans pay for medical bills, lost wages and other accident results, Houston lawyer Michael Stewart said.

Stewart is asking the state's highest civil court to reconsider its Dec. 22 ruling in Lilith Brainard v. Trinity Universal Insurance Co., arguing that the opinion renders a vital form of insurance "practically worthless," particularly in Texas, where an estimated 20 percent to 25 percent of drivers carry no auto insurance. "It's bad policy, as far as I can see. I don't think they were thinking it through," Stewart said...

The Brainard decision changed key aspects of uninsured and underinsured motorist coverage: Insurance companies are no longer required to pay unless a court determines the dollar value of the loss and who was at fault for the accident, even if the other driver admits liability. Insurers are free to accept a claim without that court finding, but if a claim is rejected, the next step is to enter settlement talks or sue your insurance provider, and that usually requires legal counsel to succeed. Paying for that lawsuit, however, is now the customer's responsibility. Lawyer fees and other trial costs can no longer be assessed to the insurance company if the customer prevails at trial. Insurance cases are typically expensive, with costs mounting well before trial...

The Brainard decision renewed complaints from lawyers and consumer groups that the Supreme Court's nine Republican justices consistently render decisions that are more sympathetic to business than consumers. Of 69 cases involving consumers in the 2005-06 term, the court sided with businesses 84 percent of the time, according to Texas Watch, an Austin-based consumer group that frequently takes on the insurance industry. Similar results date back to 2000, when Gov. Rick Perry began appointing justices to court vacancies, the group said...

http://www.statesman.com/search/content/news/stories/local/02/24/24insure.html

People will simply be offered a lowball settlement that will cover net to nothing. If their expenses are higher (and they will be), they will have to spend the maximum amount an insurance company would pay to get them to pay, getting nothing for their injuries and property loss.

Until and unless this vicious ruling is tossed out by the state supreme court, uninsured motorist coverage won't be worth the cost of the ink on the policy in Texas.

This is a typical anti citizen, pro corporate ruling. This is why I refuse to live in Texas.

and yet, these geniuses effectively did exactly that.

if this is accurate and stands, it should backfire on the insurance companies, because consumers should immediately cancel their policies as near-worthless.

so insurance companies save a bundle on claims, but lose even more on premiums....