The insurance industry is one that deals with a lot of legal work hence the need for insurance defense law and insurance defense lawyers or attorneys. This article explains what insurance defense law is about, how it works, and what insurance defense lawyers do.
What is Insurance Defense Law?
Insurance defense law is the legal representation that handles cases relating to insurance, claims, and insurance providers. It can be seen as the aspect of the law that specializes in insurance-related cases.
An insurance defense attorney or lawyer may work with a law firm that helps insurance companies with their judicial needs or in insurance companies as a member of staff mandated with taking care of the company’s legal work.
Having an insurance defense attorney is crucial as insurance companies have claims filed against them and they have to investigate these claims to ascertain the truth in them. This process requires a level of legal expertise hence the need for attorneys in the insurance industry.
Also, the laws governing insurance in one state may be different in another state. This makes the need for insurance defense attorneys a great one today. The insurance industry is choked with heavy regulations and there is a serious need for legal expertise.
There are a number of things that help insurance companies make a profit. They depend on the policies they write, the premiums they earn from their underwriting services, the claims they pay out, amongst others.
Taking and resolving claims as they are filed is something they never do. They investigate the facts surrounding a claim, determine whether the claim is an actual one, and possibly try to reduce the claims. All of these require the services of an insurance defense lawyer or attorney hence the important role insurance defense law plays in the insurance industry.
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How Insurance Defense Law Works
To make the concept of what insurance defense law is about and how it works, let me show you some examples that are worthy of note.
Almost every legal detail of the insurance industry is handled by insurance defense. Here are a few examples of insurance defense law and attorneys at work.
A landlord who has a homeowner insurance policy suffers damage due to a flood. It is typically for homeowners insurance policy to cover for damages caused by flood nonetheless chances are that damages caused by a flood are not a provision in this landlord’s insurance policy.
The insurance defense lawyer defends the insurance company when the landlord feels the company is trying to cheat him of his claim.
Another example is in the case of people trying to defraud insurance companies by filing false claims. Some individuals make it a habit to file claims while putting themselves in a situation much worse than the original event.
Such a scenario is commonplace amongst workers filing for worker’s compensation insurance. They may not be as injured as they claim or the damage may not be so severe. It is one of the duties of an insurance defense attorney to uncover cases of insurance frauds and false claims in this regard.
Also, insurance providers use attorneys and lawyers to defend their clients when claims are filed against them. For example, a financial consultant may have a claim filed against them from an unhappy customer. If the consultant bought professional indemnity insurance prior to such an event, their insurance provider would solicit the services of an insurance defense attorney to defend their client.
Even though the insurer would pay for such claims, the payment would be reduced to a more favorable amount when an attorney is involved in the legal process.
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Lastly, insurance defense lawyers are used by insurance companies to checkmate their practices and operation to ensure they are complying with state laws and regulations. Something that is deemed legal in one state may be illegal in another state and they need attorneys to determine if they are in sync with the regulations from the state government.
For instance, it is legal for an auto insurance company to use the credit score of an intending policyholder to determine what their car insurance rate will be. Such a practice is illegal in California, Hawaii, Massachusetts, and Michigan.
Furthermore, insurance grace periods are not the same the United States. Insurance companies must be careful not to stop providing coverage when a client’s grace period as determined by the state is not over. These and many more state regulations are what insurers need attorneys to stay updated on.
What Do Insurance Defense Lawyers Do?
The roles of an insurance defense lawyer can be summarized into three points. They are:
- Protecting policyholders when claims are filed against them
- Helping insurance companies and policyholders determine how and whether claims should be paid
- Ensuring insurance companies comply with state laws and regulations
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How Much Do Insurance Defense Lawyers Earn?
Insurance defense lawyers make quite a lot of money and you can be sure it is a profitable venture. The salary of an insurance defense lawyer ranges from between $50,000 to $80,000. This salary range depends on the base salary, total cash compensation, and annual incentives.