Awards

MONEY GROWS ON TREES

News Flash: Vault Containing Tooth Fairy's Supply of Quarters has been Robbed

I am convinced that the average United States citizen believes in a free lunch, Santa Claus and that money grows on trees. Based on the recent lawsuits and the resulting awards, it amazes me that people fail to understand the source of the money. I have a simplistic view, trace the money. Not in the normal police fashion from bank account to bank account, but more a trace of each dollar back to the person that paid that dollar to some corporation somewhere. After all is said and done, the money comes out of the pockets of the average, middle class, middle income pocketbook.

For those of you that think the money comes from the coffers of the big corporations or the insurance companies, think again. Start by recognizing where they get the money. Big corporations may take a short-term loss in paying for a big payment, only because they know that they can raise prices in the long term to recover any loss. Whether selling goods (hamburgers) or services (cable TV), all money eventually comes from the pockets of you and me.

Also consider that in most cases those big awards aren't paid by the company being sued, but instead by the insurance company that insures the big company with a REALLY big umbrella liability insurance policy. I know that you are thinking that it is okay because the big companies pay to the insurance companies for that coverage, right? Kinda, only slightly. Insurance companies consolidate thousands of small payments to make up huge stashes of money to be able to pay claims. If all was fair, then insurance companies would charge companies with big umbrella liability insurance big insurance premiums for that coverage. It ain't fair. Insurance companies determine if they are profitable by figuring out how much came in and how much went out, if the out was higher than the in then they raise the premiums ACROSS the board, EVERYONE pays more, you, me and the big companies. Also consider that the big companies can swing a little more weight with the insurance company than you or I, therefore they may get better rates. The average homeowner can have three or four primary policies with an insurance company: house, car and life. Normally the health, dental, accidental death, vision and supplemental death policies are handled by the employer. So here is the average homeowner making payments to the insurance company for three or four policies totaling $1,000-$2,500 per year in premiums. Big companies have all the policies as part of being an employer: health, dental, etc consolidated for all the employees plus, car insurance for company vehicles, plant and equipment insurance, loss of business insurance, liability insurance, officer and director insurance and then a REALLY big umbrella liability policy to cover everything that no one thought of before. Insurance companies fight for those customers and work deals that the average person can only dream of because the insurance company knows that a minor premium increase by everyone else will cover any discounts to the really big guy.

Recently, a court in Oregon awarded a couple $50 million dollars because they claimed they were mislead by the insurance company and the award was used as a penalty against the insurance company for every other time they lied to consumers. Here's my understanding of the supposed lie to the consumer. The couple were in a traffic accident. The car was taken to a body repair shop. Several parts were replaced and then the whole car was painted over so that you could not look at the car and see that repairs had been made. First, clearly understand, this was not a brand new car. Second, when the repairs were completed, you could not tell the car had been in an accident. However, the trial lawyer for the couple sued because brand new parts HAD NOT been used in the repair. Used parts had been used to repair a used car. The replacement parts had not been factory authorized. So, who were the big winners? Well, the couple who ended up with lots of money and let's not forget the trial lawyers that get paid only if they win, but you only have to win occasionlly to make it worthwhile. Just a side note, the lawyers probably had an agreement with the couple that they would get paid anywhere from 25% to 75% of any award. Let's assume that the insurance company has 25 million customers, well, everyone's insurance premium just went up by $2.

Now, consider the explosive cost of health insurance. Have you tried to go into a hospital emergency room lately and pay the bill? HAH!! Just getting a bandage on a scrape will cost over $250, don't even discuss broken bones from a traffic accident or a deep cut on your finger from a freak kitchen vegetable chopping accident. The prices of all medical treatments have skyrocketed because of the malpractice awards that have been granted. I don't care how careful you are, mistakes can be made and I can guarantee that a trial lawyer will find out. When they do, the poor victim's complete life is in shambles because of the mistake, needing millions to recover (of which the lawyer gets 33%). If one thing alone can completely destroy the ability to get medical attention, it will be malpractice insurance.

Rambling is done, I was trying to make a point, ship all the trial lawyers to IRAQ. No, just kidding, what has IRAQ every done to us? The time has come to slow down the overwhelming awards programs that are in place, the time has come to realize that awarding one person millions hurts everyone else, the time has come to stop the onslaught of lawsuits that aren't a result of real loss but the imagination of a trial lawyer.

Next time you are on a jury remember that a little bit of the award you grant is coming out of your pocket. The couple in Oregon should have gotten NOTHING. When a plastic surgeon mistakenly leaves a scar on someone which changes their appearance, they were probably ugly in the first place. Keep the world in perspective and think of it as your money not the deep pockets of the insurance companies, after all, the deep pockets reach into yours and my pocket sooner or later.