Why Insurance Costs So Much

Vaughn McMillan

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LOML works as a receptionist for a law firm that handles cases for one of the major insurance companies. She sees all sorts of stupid lawsuits go by. She told me about one Thursday that takes at least part of the cake, if not the whole thing.

In a nutshell...

1. Man is walking along the sidewalk
2. A dog barks at the man, without leaving his yard (dunno if it was a fenced yard)
3. Man is startled by barking dog, slips and falls, badly breaking his wrist
4. Doctor who treats fallen guy botches the job, and the guy ends up with a messed-up wrist

So of course, the guy with the broken wrist sues...

...the dog owner (who is insured by LOML's company). Doesn't matter that the dog never made contact. Doesn't matter that an inept doctor put the broken wrist back together wrong. Doesn't matter that the guy is a total wuss when it comes to barking dogs. But the dog owner got sued, the jury found for the plaintiff, and awarded $900,000 in damages, which the insurance company will pay. (And I know the lawyers who fought the case for the insurance company are no slouches.)

Broken wrist guy will likely go after the doctor next. They have Malpractice Insurance just for such a thing. He's probably gonna make a career out of that broken wrist.

And that's one reason why insurance costs are so high. :rolleyes:
 
Only in California!!! :D

After all, a California jury awarded a few million to someone who spilled hot coffee in their lap. Like, duhhh, I just bought some coffee and I don't understand it's HOT!?!?!?
 
Nope, it's not only a California thing. The spilled McDonald's coffee case was from my other stomping grounds, Albuquerque. ;) And although the jury originally awarded millions in punitive damages, the case was appealed and ultimately settled out of court for less than $600,000.
 
If I remember liability law from my college course in law - if your negligence starts a chain of events, you are responsible for the results of the chain of events. The guy who was hurt would not have gone to the doctor if not for the events initiated by the barking dog.

My memory is that the injured party can choose who to sue. So he can sue the dog owner or the doctor (naturally, he would go after the person with the deepest pockets). But if he goes after the dog's owner for full recovery, the dog owner can then sue the doctor because part of the recovery was due to the doctor's negligence. But doctors are shielded in California to about $250,000 in pain and suffering (if I recall correctly).

But I'm not a lawyer.

Mike

[Also, the McDonald's hot cup of coffee makes a good sound bite, but if you're interested in the truth, do some research on the case on the web. There's lots of analysis on that case and there's more to it than the sound bite.]
 
If I remember liability law from my college course in law - if your negligence starts a chain of events, you are responsible for the results of the chain of events. The guy who was hurt would not have gone to the doctor if not for the events initiated by the barking dog...

Yep, that's how the jury saw it, too. Had it not been for the dog, the event wouldn't have happened. I'm not sure I see, though, how a dog's bark could be considered negligent.

I don't know the details about the barking dog...it might have been unfenced and been approaching/charging the man. I do know that no physical contact was made between the dog and the man, though. If it had been a car backfiring instead of a dog barking, I wonder if he would have grounds to sue the car's driver? :dunno:
 
I think what's disturbing is the amount that homeowner would be liable for if he didn't have such good insurance.

Any idea what breed the dog was? Not that it matters, but I've heard of insurance companies denying coverage to dog owners with certain breeds.

Makes me think it's high time I got some umbrella coverage....
 
I also have to say it's stories like this that tends to make me want to become a hermit on a compound in the middle of the Nevada desert.





Oh, right...


Already there.... :eek::eek::eek: :rofl::rofl::rofl::rofl:
 
Yep, that's how the jury saw it, too. Had it not been for the dog, the event wouldn't have happened. I'm not sure I see, though, how a dog's bark could be considered negligent.

I don't know the details about the barking dog...it might have been unfenced and been approaching/charging the man. I do know that no physical contact was made between the dog and the man, though. If it had been a car backfiring instead of a dog barking, I wonder if he would have grounds to sue the car's driver? :dunno:
Juries really are reasonable people (they're you and I). I doubt they would give an award to a plaintiff unless there was something "unusual" about the situation. So maybe it's more than just a dog barking. Suppose the dog was in the house and barked at the guy walking on the sidewalk (maybe through a screen door or window). Would you hold the dog owner liable? Probably not.

Mike
 
that still is uncalled for and the amount is way outa line..if the victum had been in a factroy job. and lost his whole hand he would have gotten that much from the insurances......but if a dog barks he get more????? just not right,,, the sueing laws need to be reworked
 
that still is uncalled for and the amount is way outa line..if the victum had been in a factroy job. and lost his whole hand he wouldnt have gotten that much from the insurances......but if a dog barks he get more????? just not right,,, the sueing laws need to be reworked

I tend to agree with you on this point Larry, people think that the insurance companies are a source of free money... they don't stop to realize where the money comes from... right out of our pockets.

At the risk of becoming political, this is the reason our medical situation has become all embroiled.... we started using the insurance companies as a prepaid medical account instead of the coverage for catastrophic events that they were originally designed to be.:(
 
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Just in case anyone was confused; if you follow the trail far enough, you will discover that insurance companies actually run the world.
 
that still is uncalled for and the amount is way outa line..if the victum had been in a factroy job. and lost his whole hand he would have gotten that much from the insurances......but if a dog barks he get more????? just not right,,, the sueing laws need to be reworked
It's difficult to understand a judgment unless you know all the facts of the case. The McDonalds hot coffee judgment is a good example of that.

But in truth, most plaintiffs don't get much in a civil trial. If you look as the majority of judgments, they're pretty small, and the lawyer probably takes 40% or more. It's the unusual case that gets attention.

Overall, our legal system is pretty good. It gives people the opportunity to seek redress for wrongs that are committed and it's reasonably consistent in its outcomes.

Tort reform is talked about all the time, but it never goes anywhere because people are afraid of the injustice that it will bring. For example, California has a limit of $250,000 on pain and suffering for medical malpractice. Many patients cannot get redress for their suffering caused by an incompetent doctor because no lawyer will take the case. Even if they win the full amount, it's a loss to the lawyer after payments for expert witnesses, medical tests, etc. Alternately, the plaintiff gets nothing after paying the legal costs. But it does keep medical malpractice insurance lower than other states. Choose your poison.

Mike

[Workman's comp is another example of limits on recovery in order to keep insurance cost down. But as you point out, a person can lose an hand and not get very much compensation, considering they will live the rest of their life with only one hand.]
 
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Seriously, after watching what my mother went through for six years in a nursing home, then becoming an advocate for nursing home residents, I have come to believe that litigation lawyers may be our saviours in society. I believe a whole lot more lawsuits should be filed over nursing home neglect. Hit 'em in the pocketbook to get their attention.
 
I think Mike is right. You guys might have all this to contend with but your system aint bad. I grew up where such injustices that might exist by companies making products that were defective or similar type malpractice cases were just not possible. I have a butchered left leg to prove it. I have long weighed this aspect of life in North America but it keeps society generally on the straight and narrow by comparison to what it would be like if there was no liability litigation. Just take the Toyota recall. If they were not afraid of liability would they even admit there is an issue. :huh::dunno:
 
I think Mike is right. You guys might have all this to contend with but your system aint bad. I grew up where such injustices that might exist by companies making products that were defective or similar type malpractice cases were just not possible. I have a butchered left leg to prove it. I have long weighed this aspect of life in North America but it keeps society generally on the straight and narrow by comparison to what it would be like if there was no liability litigation. Just take the Toyota recall. If they were not afraid of liability would they even admit there is an issue. :huh::dunno:

Good point, Rob. However, Ford didn't when their gas tanks were blowing up. They calculated paying the lawsuits was cheaper than a fix. Removing limits would wake them up fast.
 
Good point, Rob. However, Ford didn't when their gas tanks were blowing up. They calculated paying the lawsuits was cheaper than a fix. Removing limits would wake them up fast.
I don't think there's any limits that would have affected Ford in the gas tank situation. They just calculated what they thought a jury might award and found it to be less than the cost of fixing the problem.

But their calculations were based on a guess and after that "calculation" was entered into evidence, the jury probably significantly increased the judgement amount.

Mike

[Let me point out that the Supreme Court is beginning to move towards limiting the size of punitive damage awards - for example, the Exxon Valdez situation. How that will play out, I don't know.]
 
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