Keep Our Families Safe

Misplaced Faith

David Jackson, a 21-year-old college student, was driving on a two-lane road when he saw a person walking along the side. After checking his rear view mirror and seeing no other cars, he slowed down to offer the person a ride. Without warning, his car was hit from behind and pushed into a cornfield.

The person walking along the road fortunately wasn’t hurt, but David was not so lucky. He suffered head trauma and a sprained neck, and needed surgery to correct a jaw problem. His car was totaled.

Police who investigated the crash found that the driver who hit David could have seen his car from 300 feet away, giving her time to react. She admitted she was looking at her dashboard.

David filed a claim with State Farm, the other driver’s insurer, in an attempt to cover his expenses from the crash. State Farm denied the claim, telling David that he was 100 percent responsible for the collision because he had stopped on a public road.

With the help of lawyers Frank Cuomo and Jason Cuomo of Wellsburg, West Virginia, David took the giant insurance company to court and won, and uncovered some disturbing facts about State Farm’s practices in the process.

Evidence in the case showed that State Farm knew the driver who hit David was at fault. A letter written by a State Farm attorney said she could have seen the top of his car well before impact. A memo from a State Farm manager admitted that the driver who hit David was as much as 60 percent at fault (the jury found her to be 90 percent) and recommended that the company settle the suit.

David’s lawyers also learned that State Farm showed managers a training video, “Buried Alive,” that urged them to destroy documents that could be used against the company in court. The company gave a “Top Dog Award” to employees who disposed of claims quickly, and promoted the adjuster in David’s case. A State Farm vice president had written an article urging employees to “send a message” to claimants by fighting all claims.

David’s attorneys used this evidence to prove that State Farm had acted in bad faith and violated state law when it denied David’s claim. West Virginia law requires an insurance company to try to settle an accident claim when it’s reasonably clear that a policyholder was at fault.

The jury found that State Farm violated the law so often it was a “general business practice.” Jurors not only compensated David for his losses, including the annoyance of a five-year legal battle, but also ordered State Farm to pay punitive damages, which punish defendants for especially bad, near-criminal behavior.

“This case is important because we were able to show that this was not an isolated occurrence,” lawyer Jason Cuomo said. “The people who handled David’s claim were following the general policies of the whole company. Anyone with a case against State Farm should be aware of this.”

What can consumers do to assure they’re being treated fairly by insurance companies? Every state has laws that prohibit unfair, discriminatory, or deceptive insurance practices, experts say. Because the laws vary, consumers should contact their state’s insurance department to learn more about protecting their rights.