Andrew Dòsa – Personal Injury Attorney – Alameda County, CA
“There’s another sad reality to it. And that is, insurance companies don’t really care if they spend a lot of money defending your case.”
Ray Hrdlicka – Host – Attorneys.Media
“I need to ask (about) that. If you’re spending a lot of money defending you case…you spend more money defending your case versus what you would have to pay out…why?”
Andrew Dòsa – Personal Injury Attorney – Alameda County, CA
“Because insurance companies don’t want to get the reputation they are an easy mark. That’s one. And two, they have an economic income incentive. And it works this way. Every dollar that an insurance company spends to defend a claim, is broken up into two parts. At least 80% of it is the cost of them evaluating the case, disputing the case, and then ultimately rejecting the case and its appropriate value. And the last 20% is what they’ll pay to the plaintiff, out of which the attorney gets paid.
So when the insurance company… when you would think would have a motive to not spend money… when the insurance company knows, at the end of the year, it can identify all of its costs of doing business, knock on the door of the insurance commissioner in California, and justify an increase in their premiums because of all the expenses they have to defend claims, insurance companies live to spend that money. Because at the end of the year they will get a guaranteed profit in their premium raised to address the expenses they have. I have seen cases where an insurance company would rather pay $15,000 for their two experts on a case, which was worth approximately $12,000 because they didn’t want to pay more than $10,000.”
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