There are more than 26 million licensed drivers in California, and most of those drivers are insured by a dozen or so major insurance companies. The likelihood of you being involved in an accident with a driver who shares your insurance company is pretty damn good.
So, what happens a case like that? Doesn’t it create a conflict of interest for the insurance company? Can it negotiate a fair settlement with itself? How can you get the outcome you deserve when the attorney for the guy who hit you works for the same company?
How the “Chinese Wall” Works
Legally, when the same insurance company represents both the defendant and plaintiff in a case, the “Chinese wall” is supposed to apply. The Chinese wall is a metaphor used to describe a code of silence between the employees of an insurance company who are representing opposing clients. Unfortunately, there is no real way to confirm information isn’t being shared between the attorney representing you and the one representing the other driver. (The best way to stop this? Get your own lawyer, not the insurance co.’s.)
Fortunately, California put laws in place that prevent the insurance company from representing two opposing parties in an actual lawsuit. Insurance companies have lawyers on staff who litigate on behalf of their clients, whether the client is suing or being sued. These in-house attorneys are on salary, so it costs the insurance company the same amount to settle immediately as it would to go to trial. (They don’t get to bill hourly for your specific case.) That said, the less time they spend on it is better for them.
However, insurance companies aren’t allowed to defend one of their insureds who is being sued by another insured. In such a case, the company has to hire an outside attorney to represent their defendant client against their plaintiff client. This can create some interesting situations.
How Having an Outside Lawyer Helps You
When using their salaried, in-house lawyers, it doesn’t cost an insurance company much more if a case drags on or goes to trial. However, when the insurance company is forced to hire an outside attorney to represent a defendant, the fees they pay that attorney begin to add up. This lose-lose situation (the insurance company is paying an outside attorney to reduce the payout they will have to make on behalf of the defendant client) can “incentivize” the insurance company to act in bad faith or rush to a settlement that is unfair to the plaintiff. Don’t let this happen to you.
If you want to file a claim against a person who shares your insurer, there is no incentive for the insurer to act in your best interest. In other words, the game is rigged, Chinese wall or no Chinese wall.
This is why you need an attorney who has no ties to your insurance company.
We don’t. In fact, we don’t even like ‘em.
San Diego’s Jurewitz Law Group Injury & Accident Lawyers has spent well over a decade successfully representing victims who are being screwed over by the very insurance companies they’ve been paying premiums to for years. Our firm has no “buddy-buddy” relationship with the insurance industry, and has no incentive not to get you the compensation you truly deserve. To find out more, call (888) 233-5020 for a FREE case evaluation. Curious about insurance tactics? We’ll tell you.