The insurance industry always winds up blaming injury victims and their lawyers for premium increases that result from investment losses and hurricanes.  However, there is a revealing article this week in the Atlanta Journal Constitution.

Increases of car and insurance rates of 5% to 11% in Georgia this year are — accordnig to insurance industry sources and experts — attributable to:

  • the recession
  • investment losses by insurance companies
  • hurricanes
  • rising cost of auto repairs

There is no mention of liability claims losses as a factor in rising premiums.

But I bet by the time of the next legislative session the insurance industry lobbyists will invent a way to blame all premium increases on injury victims, lawyers and juries.

As an attorney representing people with serious injury cases in Georgia, I have to keep an eye on the solvency of the insurance companies that are contractually obligated to pay legitimate liability claims against their policyholders.  For most of my career, the solvency of insurers was seldom if ever a big concern.

In today’s economy, however, we can’t take anything for granted.  With the giants of industry and finance in deep trouble, insurance companies are not immune.  Heavily invested in stocks and commercial real estate, insurers are vulnerable to the downdraft in those sectors.

Reinsurers face similar problems. Reinsurance is a means by which an insurance company can protect itself with other insurance companies against the risk of losses. Insurance companies offset some of their risk exposure by selling it to reinsurers.

Due to the recession, the bear market and the credit crisis, more insurance companies are looking to reinsure more of their books of business in order to free up capital. But the reinsurance companies are facing all of the same problems, plus in some cases poor international currency exchange rates.

Reuters reported on April 1 that reinsurance rates for property catastrophe insurance rose by an average 8% worldwide based on January renewal rates. Reuters also reported in the same news release that reinsurance costs for US catastrophe risks rose by as much as 40% in 2008. So, it is clear that insurers around the world, and especially in the US, are struggling to find ways to reduce their risks in this very bad economic and financial time.

In this highly integrated world economy, everything is intricately interrelated. Problems in financial markets and real estate hurt insurance companies, which in turn hurts anyone who relies upon payments by insurance companies.

And when insurance companies experience financial problems, even in relatively ordinary times, they typically blame people who have been catastrophically injured for running up "frivolous" lawsuits, and push for new rounds of "tort reform."  In other words, bad things roll downhill.

So what are mere mortals to do about this?  I have my own ideas, but don’t choose to publish them and give the other side of my cases a window into my mind.

There’s a disturbing report out of Washington that has nothing to do with truck accidents or litigation, but about which I’m writing anyway.

Reportedly the Obama administration is considering a proposal to bill veterans’ private individual insurance carriers for treatment of service-related medical conditions at Veterans Administration medical center.  Currently the VA bills insurer only for treatment that is not service related.

As reported by Fred Lucas at CNS News, veteran groups are understandably negative about the idea.  They are concerned that shifting more of the cost to private insurance will do several things:

1.      drive up premiums

Kudos to my State Senator, Judson Hill (R-Marietta), sponsor of Senate Bill 94, which if passed would allow adult offspring to maintain coverage under their parents health insurance up to age 25, regardless of school enrollment status. In the current economy, jobs of any kind are tough for young people just out of school to find. And when they do find jobs, too often health insurance benefits are lacking. With two kids now in college, I  am eager to see this pass into law.


If you have spent much time driving on the metro Atlanta expressways you have probably seen ladders and mattresses that had fallen from pickup trucks and car roofs.  Occasionally there are cases of catastrophic injury or death caused when people traveling at expressway speeds encounter such random obstacles.

Of course it is seldom if ever possible to identify the vehicle from which a ladder or mattress fell unless there is some unique identifying marking through which the owner can be traced. 

One might naturally think that the remedy for a person badly injured due to the dropped ladder or mattress creating havoc on the freeway would be through one’s own Uninsured Motorist insurance coverage. However, the Georgia Court of Appeals says no.

In Hohman v. State Farm Fire & Cas. Auto. Ins. Co., 283 Ga.App. 430, 641 S.E.2d 650 (2007), the injured person crashed when he swerved to avoid contact with another vehicle which was swerving around a ladder in the road. State Farm, as the uninsured motorist insurance carrier, admitted that there was an eyewitness to corroborate that there was a ladder in the road that led to the chain reaction.  However, the Court of Appeals went along with State Farm’s position that a UM claim could be made only if there was an eyewitness to corroborate " it was entitled to summary judgment on Hohman’s claim because no eyewitness can corroborate her contention that the John Doe defendant was negligent in failing to properly secure a ladder to his vehicle and in leaving the ladder in the roadway since no witness, including Hohman, saw a vehicle carrying  a ladder or saw a ladder fall onto the highway from a vehicle."

Of course the person who crashes because of the ladder in the road is no position to chase down witnesses on the expressway who have dodged the ladder and sped on.  In the real world, it is highly unlikely that a ladder or mattress would wind up in the expressway unless it were negligently loaded, and equally unlikely that a witness who saw the ladder fall from a vehicle would see a wreck in the rear view mirror, stop, back up on the expressway, and give his name to the police who arrive later.

Under the Georgia Court of Appeals decision, the family of a person killed in a crash caused by the ladder dropped in the expressway by some bum who kept going, and who has paid premiums over the years for uninsured motorist coverage, essentially has no opportunity to use that coverage.

The Georgia Court of Appeals is, I understand, the busiest state appellate court in the United States in terms of cases per judge.   In such an overworked and understaffed appellate court, sometimes decisions are cranked out that just don’t make a lot of sense.

I suppose the only remedy in these cases would be if the police could secure the ladder or mattress, conduct a forensic investigation to trace the fallen object, and identify the vehicle from which it fell. That is extremely unlikely unless there is a death and the prospect of a vehicular homicide prosecution.