In the past two sections, I discussed how your car accident claim is handled prior to any lawsuit being filed. In this final section, I will discuss how your case is handled when a lawsuit is filed. Once you and your lawyer decide that a lawsuit is necessary, your lawyer will explain to you that the lawsuit must be filed against the other driver personally and not against the insurance company. In Texas, a plaintiff is not permitted to file a “direct action” against the liability insurance company even though the entire claim has been handled completely and exclusively by the insurance company. The theory is that your claim is really against the person who caused the accident and not against that person’s insurance company. This is just the beginning of the bad news.
Once your case gets to trial, you are not allowed to mention any of your dealings with the insurance company. The law deems these matters irrelevant to how the accident occurred and whether you were injured. In fact, if you even mention that the other driver is covered by liability insurance, the court may declare a mistrial. The theory is that a jury is more likely to find against the defendant merely because the defendant is covered by insurance. The reality, however, is much different. As far as the jury is concerned, you have hauled a fellow motorist into court over a car accident. Because the jury never hears anything about the other driver having insurance, the jury may assume that the defendant was not covered by insurance. Likewise, the jury has sympathy for the defendant and that sympathy may be reflected in the verdict. The jurors never even hear that the defendant’s lawyer is hired, and paid for, by the insurance company. However, the jurors may be permitted to hear about any previous relationship between you, your lawyer, and your doctors. To add insult to injury, the insurance adjuster may even be sitting in the court gallery watching your trial knowing that the insurance company’s handling of your claim will never come to light.
What’s the answer? Very simple: Permit direct actions against liability insurance companies in Texas. A direct action would permit the injured plaintiff to sue the insurance company directly. Some states have already recognized direct actions such as Georgia, Iowa, Kansas, Louisiana, Nebraska, and Wisconsin.
This leads me to the myth about automobile liability insurance. In Texas, you are required to carry automobile liability insurance presumably to provide protection to those damaged or injured in a car accident. Likewise, it would seem logical that the insurance companies answer to the very people the law was designed to protect. However, the reality is that the insurance industry enjoys huge profits from selling insurance policies that Texas motorists are required to purchase, while also enjoying virtual anonymity and immunity from its handling of the claims. It’s time for the law in Texas to change.
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