News today is that the Oregon Supreme Court issued this opinion that could help Oregon consumers with property damage insurance claims.  I have to confess that insurance policy cases make for dry reading.  So it can be hard to follow these types of cases.

Here’s what the Court decided.

When you are in a wreck, the company that insures your car must restore the car to its pre-collision condition.  If it cannot, the insurance company must pay the consumer the diminished value of the vehicle.  It’s a nice result for consumers. Consumers get nickled and dimed to the poorhouse, and this is simply one modest change that helps consumers get the benefit of the insurance that they buy.

This really becomes more of an issue when you’re injured in a car crash. It’s bad enough that you have to deal with the physical injury, the pain, and the long process of getting back to health.  But when–on top of that–you’re being nickled and dimed by your insurance carrier, it just seems like there’s something wrong. After all, when we pay for insurance, we should get full coverage. The Court ruled the right way today, and that’s a good thing.

It will be interesting to see whether the Oregon insurance industry lobbies for a re-write of this rule when the Oregon legislature reconvenes in a few months. Wouldn’t suprise me a whit. But then I take a fairly jaundiced view of these things.

David Sugerman

There’s that commercial with the earnest, wise and sentorian guy talking about all the great things they do, ending with the intonation, “That’s Allstate’s stand.”  A new American Association of Justice study noted here names Allstate the worst insurer.

Interestingly, Allstate’s CEO’s 2007 compensation topped $10 million for the year.  That’s a lot of premium money. More to the point, it’s fair to say that Allstate has some…uh…history of being naughty.

My own experience is that some insurers are worse than others. While not all are bad news, many give injured consumers and policyholders the runaround when people make claims for their harms and losses. It’s common to hear someone in my office express surprise when Allstate or one of the other carriers fails to make good on its end of the insurance contract by, for example, failing to pay medical expenses incurred by the injured policyholder.

That’s particularly outrageous because the policyholder did what they were supposed to when they paid for the coverage. And then they get stiffed or hard-timed by Allstate. This is what we in the trenches refer to as, “Allstate’s stand.”

David Sugerman

One of the criticisms of class actions is that often they lead to little real benefit for consumers. Often, that criticism isn’t very accurate because consumers who suffer small economic injuries aren’t going to see much benefit individually. But taking money from the wrongdoer penalizes them for misconduct and restores the money lost–even small amounts–to consumers.

But one of the problem areas is coupon settlements. In a coupon settlement, consumers who are part of a class receive a discount on future goods or services as part of a settlement. Sometimes that’s an okay outcome when, for example, the rip off is done on low-cost commonly used goods, like–say–gasoline. Or if the coupon can be redeemed for cash, then that’s fine, too.

But when the coupon gives a discount on a high cost item, that’s generally bad. And that takes us to the recently announced Ford Explorer settlement in California. In that class action, consumers who bought Ford Explorers can receive a coupon for $500 for future purchases of Ford Explorers.

While I don’t have all the details on the settlement and have no first-hand knowlege of the case, that seems like a lousy outcome. If the coupons are redeemable for cash or if they can be sold, that’s not so bad. But if they can only be used by buying a new Ford Explorer, that’s one of those class settlements that doesn’t do consumers a lot of good.

There are times when coupon settlements make sense. And maybe more information would lead me to think differently about this. Still, it’s got a kind of smell to it.

David Sugerman

ps-I’ll be out of town next week, so things may slow on Davids’ blog for the week. Though I guess they have an internet in that town, too.