A few months ago, I wrote about a minor car accident I was involved in and the lessons I learned from the experience. I want to follow up on this as I learned more from the aftermath.
After the accident, I followed up with my insurance company to make sure that I was not at fault. A few weeks later, they determined that I was not at fault. That was a relief since my insurance company would not drop me and my premium would not increase.
But this also meant getting my car fixed, since the other driver’s insurance company would pay for it. This was particularly important to me because my car is fairly old with very high mileage. The resale value of the car isn’t much. If I had to pay out of pocket for the repairs, I would have just left it alone or asked my insurance company to file a claim with the other driver’s insurance company so they’d pay for the repairs.
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A short time later, I made arrangements to get my car fixed. I contacted my insurance company who recommended a few body shops in the area. They also made arrangements to get me a rental car. I had no reason to believe anything was amiss.
So I take the car to the body shop where they take a few photos, ask me a few questions and take my keys. The car rental company picked me up and drove me to their office where they asked a few more questions, had me sign some paperwork before handing me the keys.
I liked the way my insurance company was on top of things. I felt like I was in good hands.
A week later, the body shop called me to tell me that the repairs are finished and my car was ready to pick up.
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When I arrived, the mechanic then showed me a bill for $1,200. I smiled and told him the insurance company will be salty writing that check. But that’s what insurance is for and why we pay the premiums.
The mechanic said that I had to pay it. That was the deductible.
Excuse me? My insurance company told me that I was not at fault for the accident. So why am I paying a $1,200 deductible? And why wasn’t I warned about this beforehand?
Now despite ATL’s very generous columnist salary and the numerous “future of law” endorsement deals from countries with varying degrees of legitimacy, I don’t have a spare $1,200 lying around. And even if I did, I’m not going to just hand it over without an explanation.
After a few angry phone calls to my insurance company, I learned that insurance companies don’t always stand with you. The dark truth is, even when your insurance company finds you are not at fault in an auto accident, if they have to pay for the repairs, you have to pay the deductible. You can get your deductible reimbursed, but only if the other driver’s insurance company agrees that their driver is at fault and they pay your insurance company. If the other party’s insurance company disagrees, the case will be given to a judge or an arbiter who will make a binding decision.
This experience left me with a nasty impression of the insurance company and their business practices. My immediate temptation was to switch carriers. But that seems like a bad idea. First of all, the new company will likely follow the same procedures. But I am hoping that my insurance company can use its industry experience to resolve this matter quickly. Dropping them now and possibly creating an adversarial relationship certainly won’t help. But from now on, I have to be more attentive to the process.
I get that the deductible requirement was probably spelled out in the contract. I suppose if I spent 15 minutes reading it, I could have saved 15% or more. But even if I had read it, I probably would have forgotten about it.
Also, since my insurer was one of the larger ones, they must have had a number of these complaints before and could have established procedures to properly inform their policyholders. For example, when I called to inquire about a body shop, the claims specialist could have warned me that if I took the car in for repairs, I would have to pay a deductible.
As I drove away from the body shop, trying to adjust my thoughts back to work, I wondered if I put any of my clients in a similar situation. There have been times where I had to charge additional fees. But I didn’t put them in a high pressure situation. I warned them in advance, explained why and answered any questions that they had. Even then, in some cases, I bore the brunt of their anger. But their anger was more directed towards the other party or the system.
The business lesson I learned from my experience with my insurance company is that when clients are forced into a corner like I was, they will likely do one of two things. They will fire the attorney. Or they will reluctantly pay because they sunk too much money to begin with or they have no one else to turn to. If this happens, the client will be more attentive to the case. And not in a good way because their trust in you has either diminished or has disappeared completely. They will put you on a short leash, start making demands that are borderline unreasonable and question everything you do.
For the above reasons, we want to avoid putting our clients in this situation in the first place. We do this by regularly communicating and warning them that if they take a certain action, they will incur costs, including additional attorneys’ fees.
Finally, in case a high pressure situation arises, try your best to diffuse the situation by being flexible. Don’t hide behind the terms of the attorney-client contract or “industry standards” (which your clients know nothing about) unless it is absolutely necessary. Make changes to the contract terms if it is fair to your client.
Lawyers have to make money but that doesn’t mean we always have to act like a businessperson. We have to be like a good neighbor and be there for our clients.
Shannon Achimalbe was a former solo practitioner for five years before deciding to sell out and get back on the corporate ladder. Shannon can be reached by email at [email protected] and via Twitter: @ShanonAchimalbe.