Unless you have been living under a rock for the past few years, you have seen the Nationwide Insurance commercials and heard their catchy little jingle: “Nationwide is on your side….” Well…no they are not! Here is a prime example of how insurance companies treat their own customers in America:
This case does not involve an injury; it does not involve a death. In fact, it only involves a car and the decision to repair or total the vehicle. It is not fiction; it is a real case involving real citizens and a bad business decision by an insurance company and its management. In this case, it was Nationwide, but you could insert the names of multiple insurance carriers and experience similar, deplorable conduct. As you have read in many of my previous posts, insurance companies love you when you are paying your premiums, but despise and mistreat you when you seek the benefits you are entitled to by your policy. These same companies often seek and receive assistance from elected officials, the guys voter for by YOU. As Paul Harvey used to say: “Here’s the rest of the story”:
On Sept. 4, 1996, Sherri Berg’s Jeep Grand Cherokee was hit, hard, by another vehicle as she entered a highway. Her car spun four times and struck a pole. Fortunately, no one was injured. Sherri and her husband, Daniel, contacted their insurance carrier, Nationwide; the company designated a facility to repair the Jeep. The manager of the repair shop evaluated the vehicle and reported to the Nationwide adjuster that the vehicle was unrepairable because the vehicle’s frame could not be straightened; it was deemed a total loss. At the time, the SUV was valued at $25,000. Nationwide commissioned a second appraisal from the same manager and, essentially, demanded that the Jeep to be repaired at a cost of $12,500, half the cost of sending the couple a check to replace the vehicle. This information was not transmitted to Sherri and her husband until much later. They only learned the information because a fired, former employee of the repair shop decided to blow the whistle on Nationwide and the repair shop.
In October 1997, over one year after the accident, and after the car was “repaired”, that former employee called and warned the Bergs of structural repair failures to their Jeep. The Bergs did a wise thing; they contacted Hy and Benjamin J. Mayerson, father and son attorneys. An inspection determined that the Jeep’s crashworthiness had been compromised in the accident and the Mayersons filed a lawsuit on the Bergs behalf. That lawsuit filing began an epic battle that lasted nearly 20 years after the accident. Last month, Nationwide was slammed with $18 million in punitive damages for its behavior; Judge Jeffrey K. Sprecher ruled that Nationwide had concealed evidence about faulty repairs, hid crash photos and other relevant information from the Bergs, risked harm to the Bergs and the public by allowing a structurally unsound vehicle on public roads, and relied on a strategy to discourage policyholder challenges in court by artificially inflating the cost of suing the company. Sprecher determined that the insurance carrier spent more than $3 million to defend a claim over a Jeep that it could and should have replaced for $25,000. Some experienced court observers say that this was the largest punitive award ever handed down in Pennsylvania in a suit alleging “bad faith” by an insurer.
Nationwide never changed its position, even after the Bergs filed the lawsuit. By that time, the value of the SUV had depreciated to $18,000. The insurance carrier hired a damage specialist to examine the Jeep who found “extensive structural repair failures.” True to form, instead of informing the Bergs, Nationwide buried the evidence and hid the fact that it knew anything about these findings. Ultimately, Nationwide purchased the car. According to the Mayersons, the company did this to cover up their misconduct. Nationwide claimed it only bought the vehicle to re-examine evidence.
Because these are messages I have shared with my readers for years, I would like to share Judge Sprecher’s scathing “Letterman Top Ten” that he said was Nationwide’s messages to customers who sued:
- “Do not mess with us, if you know what is good for you.”
- “You cannot run with the big dogs.”
- “There is no level playing field to be had in your case.”
- “You cannot afford it and what client will pay thousands of dollars to fight this battle?”
- “So we can get away with anything we want to.”
- “You cannot stop us.”
Obviously, Nationwide believed its money was better spent dragging its premium-paying policy holders through the court system rather than being “on their side” in their time of need. What were they thinking, you ask? “Who would try to compete with a huge insurance company over a collision damage case, for over 16 years? But, the insurance “Goliath” did not count on “Davids” like the Mayersons. This father and son legal team was on the Bergs’ side and carried on a valiant fight for justice, without upfront payment, for as long as it took. Sadly, it is a bittersweet victory for the Berg family; Sherri Berg died of cancer 7 weeks before the ruling. Nationwide insists that the company did not act in bad faith nor did the company ever believe the car was unsafe after it was repaired. The company has filed an appeal.
We often hear cries from the “tort reform crowd” and the insurance companies that this case or that is “frivolous”. The so-called “frivolous lawsuit” is the prime reason politicians like John Boehner (who is in the process of filing the most frivolous lawsuit of all time) call for “tort reform”. Well, the far more prevalent practice in our civil justice system is the filing and pursuit of the “frivolous defense,” the denial of a legitimate claim that leads to unnecessary litigation. This case is a prime example and graphically demonstrates the lengths to which insurance companies will go and the unlimited resources they will use to take on and attempt to crush individual citizens, EVEN THEIR OWN POLICY HOLDER-CUSTOMERS! Nationwide went above and beyond despicability to avoid paying this legitimate claim and put their own customer through litigation hell. If insurance companies paid what they should, when they should, there would be no delays in the civil justice system.
What good is insurance if your carrier is not “on your side” when you need them most, when it excludes the most obvious potential claims, and when it engages in tactics that penalize you for making use of it? Worse, Nationwide decided to put its own customers in danger to save a few bucks and then lied about and tried to cover it up for almost twenty years. If you find yourself on the opposite end of a dispute with a powerful insurance company, retain an advocate, a trial lawyer and a hero like Hy and Benjamin Mayerson. You will quickly learn the real meaning of “on your side”. When you are forced to stand side-by-side with an insurance company that will use its economic power (achieved with your own premium dollars) to crush you, the trial lawyer is your only friend. The Bergs and Mayersons proved what it takes to “run with the big dogs.” Lawsuit Financial congratulates the winners in this hard-fought litigation. Hopefully, after all appeals, justice will prevail. We will be watching.
Attorney, certified civil mediator, and award-winning author of the Zachary Blake Betrayal Series—Mark Bello is also the CEO of Lawsuit Financial and the country’s leading expert in providing non-recourse lawsuit funding to plaintiffs involved in pending litigation. He is also a member of the State Bar of Michigan, a sustaining member of the Michigan Association for Justice, and a member of the American Association for Justice.