“D3” (Delay, Deny, Defend.) vs. “I3” (Isolate, Interfere, Initiate) Lawsuit.

"I do solemnly swear:

[…] To opposing parties and their counsel, I pledge fairness, integrity, and civility, not only in court, but also in all written and oral communications; […] I will never […] delay anyone's cause for lucre or malice.  

So help me God."

Excerpted from the Oath of Admission to The Florida Bar

I have often heard it said by persons with various axes to grind that the insurance company motto is “D3: Delay, Deny, Defend.”  The accusation being that insurance companies Delay the adjustment of claims, Deny issuing payment on claims, and then when challenged Defend the claim denials in litigation.  This catchy accusation that completely falls apart when the risks vs. benefits of such a strategy are rationally examined in any detail.  Most carriers will associate an open claim with an expensive claim, meaning there is no benefit to delay.  Denying a claim leads to the risk that a dissatisfied insured will take advantage of one of the legions of lawyers clamoring for their business with television, radio, internet and billboard advertisements.  Defending a lawsuit presents a double expense – paying panel counsel to respond to the lawsuit and also getting whacked with astronomical attorney’s fee claims from the other side during settlement efforts or in the event of a trial loss.

I suggest a more motto more in touch with realities on the ground exists – one which is appears to be the unspoken motto of many attorneys and public adjusters representing insureds: “I3: Isolate, Interfere, Initiate Lawsuit.”  

First, Isolate the insured from the insurance carrier.  You don’t want the insured providing information to the carrier.  The carrier might find out facts about the loss!  You can’t allow that – what if the facts show the loss is not covered.  Even worse, imagine what may happen if the insured communicates directly with the carrier- they might reach an agreement on something and then settlement!  The horror!  Demand that all communications come through you, the lawyer or the public adjuster.  That way you can add in your two cents.  “Sure the insurance company is offering you $X for the claim but if we accept this now you’ll have to pay me $Y as fees and costs and then you won’t have enough left to fix the property – better to push this to a lawsuit and then not only will I get you that money but they will have to pay my fees.”

Second, Interfere requests from the insurance carrier.  You want documents?  “You may only see them in person this Sunday evening for 10 minutes.”  You want an examination under oath?  “Let me check my schedule - we are available in 91 days – maybe.”  You want to take a recorded statement?  “We’re available the 32nd of Neveruary.”  You want to be shown the damaged property?  “OK but the insured isn’t available so you’ll have to make arrangements with our ‘loss consultant’ who knows nothing about the loss or history of the property.”  To be as officious as possible answer every request with a request for an explanation of “the reasons why such information is necessary.”  After you’ve pulled all these obstructionist stunts and more the carrier is still going to have to eventually reach a coverage decision.  If they accept coverage then you’ll just argue they weren’t prejudiced since they were able to reach a coverage decision.  If the carrier denies coverage and cites anything other than failures to comply – make the same argument – “Hey you got enough information to deny the claim, who cares if my client flouted their duties after loss.”  You want to prejudice the insurer just enough that you can argue it is a question of fact as to whether they were prejudiced and survive summary judgment.  If they’ve accepted coverage, don’t forget to dispute the payment, regardless of what it is.  File a CRN.  If the carrier asks for appraisal slow walk the appraisal until you file the CRN and then until the cure period expires “sorry our appraiser isn’t available any time in the next 121 days”.

Third, Initiate the Lawsuit.  When you get that coverage decision, file your CRN (if you haven’t already), file your pre-suit statutory notice, and then race to the courthouse and file your lawsuit.  Now you can negotiate.  Don’t forget to claim  attorney’s fees at least $10,000.00 for having a paralegal generate an procedurally computer generated series of boilerplate discovery requests and lawsuit.  Also, you’re going to need an extra $25,000.00 to settle your claims of “bad faith” because you filed that CRN.  If the insurer doesn’t agree to pay up right out of the gate, request the deposition of the corporate representative, the field adjuster, the desk adjuster, and anyone else you can think of to drive the defense costs (and your attorney’s fees) up.  Reject early mediation – your client can’t possible mediate this dispute until you finish all this discovery (and your attorney’s fees and costs have gotten high enough).

Is it any wonder that Florida has a property insurance crisis?

If you are looking for experienced and assertive defense counsel, contact Scarborough Attorneys at Law (813) 253-0097.