Warren Buffett looks for companies with high revenue streams and little risk. Insurance companies in general, and auto insurance companies in particular, fit this profile better than most business.
Over the last ten years, insurance companies made $448 billion in revenue. That is a staggering amount of money, especially since just a handful of very large providers (State Farm, GEICO, Progressive, and Farmers) dominate the market. The auto industry has largely recovered from its post-Great Recession losses. Vehicle sales are at near-record levels.
Furthermore, as outlined below, auto insurance companies minimize their risks. These efforts come at the expense of seriously-injured accident victims, underscoring the need for an aggressive and experienced attorney, like a personal injury lawyer.
Insurance companies begin minimizing their risks in the moments after a serious crash. The telephone operators may sound friendly and helpful. But these highly-trained professionals have just one goal in mind: Minimize the company’s losses.
These operators are carefully instructed to extract damaging information from car crash victims. Unfortunately, many victims believe the myth that they must give statements to the insurance company in the immediate wake of an accident. They don’t. Insured motorists sometimes hurt their claim just in one conversation.
Most auto insurance companies work to destroy totaled vehicles within a few days of the crash, destroying critical physical evidence. That includes things like the Event Data Recorder, which is a car’s “black box” recorder. It’s still possible to establish things like vehicle speed, steering angle, and other important items through circumstantial evidence. However, it is less convincing than hard data.
Insurance company attorneys work to minimize the money that the insurance company has to pay out. Some of the defenses they use are:
- Sudden Emergency: In pedestrian accidents, insurance company lawyers often claim that the victim “darted out into traffic.” That language sets the stage for the sudden emergency defense. A good attorney can beat this defense because it has limited applicability.
- Contributory Negligence: Almost all states allow this defense in vehicle collision cases. For example, the negligent driver may have been speeding but the defense lawyer will say the victim may have made an illegal turn. Most states divide damages in proportion to the parties’ fault. Many times, a percentage threshold applies.
- Assumption of the Risk: This defense is very common in premises liability actions, like a dog bite or slip-and-fall. Essentially, the insurance company lawyer says the victim “should have known better”. The problem is that it’s not always clear what is “dangerous” and what is “safe.”
In all these cases, damages include compensation for both economic and noneconomic losses. The best way to claim your fair share is to partner with an experienced attorney.