Bill Requiring Insurance Companies to Reveal Customers’ Coverage Approved By West Virginia House of Delegates

car_accident_2.jpgA bill that would require insurance companies to disclose the type of insurance their customers carry won approval in the West Virginia House of Delegates on a 64 to 33 vote. Supporters of the bill believe that it could reduce the number of lawsuits filed in the state, while critics argue that if signed into law, it could make businesses more vulnerable to lawsuits.

House Bill 4486, which is now on its way to the Senate, would permit those who filed an insurance claim following an accident to get more information about the other party’s insurance coverage before filing a lawsuit. Supporters believe that if more people knew at the outset how much coverage the other party carried, that might discourage them from filing lawsuits because they would know whether insurance coverage alone could meet their needs. At present, people cannot view the other party’s insurance coverage without first filing a lawsuit. One supporter, an attorney, noted: “For insurance companies to hide the ball, they’re going to have to give it up after a suit is filed. Why not do it before and possibly eliminate a lawsuit filing?”

Critics such as the Chamber of Commerce, however, argue that the bill is a “cracker killer” — meaning that it could prevent companies from building an ethane cracker plant in West Virginia. Critics contend that if a business’s insurance coverage were exposed, that would lead to more lawsuits directed at the business in the future. House Judiciary Chairman Tim Miley, a West Virginia personal injury attorney, became so outraged by the Chamber’s comments that he took to the floor and delivered a 15-minute speech denouncing their scare-mongering tactics.

We at the Wolfe Law Firm find it difficult to judge exactly which way the legislation could lead. On the one hand, it seems naïve to think that companies would run screaming from West Virginia just because interested parties could see the insurance coverage they carry. As noted above, if the company was sued previously anyway, its insurance coverage would already be available to the public. Furthermore, 12 other states have enacted this type of legislation, and if they experienced a massive exodus of business, wouldn’t there be more documentation?

On the other hand, it also seems naïve to conclude that people would refrain from filing lawsuits just because they knew the other party’s insurance coverage. One source notes that “[t]he logic is that the person filing an auto or home insurance claim for an injury might opt out of going through costly physical therapy sessions if they knew the costs would exceed the other person’s policy’s limits.” Yet that seems absurd: if a person was injured in an accident and needs physical therapy, that person is going to try and get physical therapy. That person won’t really care if the other party’s insurance does not cover it — especially if the other primarily was primarily at fault. The only lawsuits this type of law might stop are the ones filed specifically to force the insurance company to open its books.

Insurance companies are active participants in accidents, providing funds to those whose person or property was injured. However, too often, insurance companies will try to avoid paying what is owed, or “hide the ball.” When that happens, you need an experienced attorney to deal with the insurance company so that it knows its behavior is not acceptable.