Monday, December 31, 2012


Photo by Padams
Delay.  We are used to delays.  Delays are frustrating, they show up and impede our ability to get where we are going, or to do what we want to do.  However, delays are also, normally, unrelated to our specific, individual goals and plans.  They are normally a biproduct of some larger operation, take, for instance, a traffic light.  Traffic lights delay our travel, but municipalities do not operate traffic lights to cause us harm, when traffic lights operate properly they contribute to an organized and safe flow of traffic.  So, we tolerate the individual delays caused by traffic lights because we understand their function. Unlike this acceptable kind of delay, the delays caused by insurance companies are tactics, they are weapons designed to break your resolve, and to otherwise advance the insurance company's interests ahead of your own.

Insurance companies delay everything.  They delay responding to reports of claims, fairly analyzing claims, providing the basis for their decisions, and, if an insurance company becomes involved in a lawsuit, things get even worse.  Then, claimants encounter an entire new package of delays, nearly all of them having to do with discovery, and honest, fair settlement negotiations.  For this, and for many other reasons, Washington has attempted to level the playing field to give claimants a fair chance through what is called the Insurance Fair Conduct Act.  This law works in the favor of individuals, to give individuals protected rights against insurance companies.  Some of these rights of individuals relate to the goal of protecting individuals from unreasonable delays caused by insurance companies.  Here is an example of a specific protection for individuals, to help individuals in the face of insurance company delay:

"The following are hereby defined as unfair methods of competition and unfair or deceptive acts or practices of the insurer in the business of insurance, specifically applicable to the settlement of claims:

(16) Failing to adopt and implement reasonable standards for the processing and payment of claims after the obligation to pay has been established....[P]rocedures which are not designed to deliver a check or draft to the payee in payment of a settled claim within fifteen business days after receipt by the insurer or its attorney of properly executed releases or other settlement documents are not acceptable.  Where the insurer is obligated to furnish an appropriate release or settlement document to a claimant, it must do so within twenty working days after a settlement has been reached."

WAC 284-30-330(16).  What this means - in part - is that insurance companies enter a world of pain if they settle claims, and then withhold the settlement funds, or the settlement documents following a settlement.  Of course, just because a specific practice is prohibited, doesn't meant that an insurance company won't try to get away with doing it.  Delay in providing settlements funds, or settlement documents, is incredible frustrating.  For many clients, getting the settlement funds promptly is important, especially if the client is facing financial difficulties.  At the end of a case, clients often feel like they have been through a lot, and that they have jumped through hoop after hoop in order to met all of the obligations that are part of the claims process. For these clients, it is incredibly frustrating to call their personal injury lawyer, to ask about the settlement funds, and to find out that the insurance company is playing games with the funds.  The key is to anticipate the headaches caused by the delay of settlement funds and settlement documents before these delay tactics begin.  Many tools are available to attorneys to do this, including, to build requirements and sanctions into the initial settlement agreement at the time settlement is reached, to create the proper incentives for the insurance company to behave reasonably.

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