Georgia Injury Law Blog

A week of frosty weather in Georgia left a trail of auto accidents, killing several people and injuring more. Now that the worst is over, it’s time to estimate the damage. Insurers are estimating a price tag of $25 million in snow and ice-related insurance claims in Georgia. 

Two of the dead were killed in an accident blamed on icy weather in Lumpkin County last week. The two victims were in a Chevy when the driver lost control and crashed the car into a Ford truck. The 18-year-old passenger in the vehicle was declared dead at the scene, while the driver had to be airlifted to Atlanta Medical Center where he later died.

The accident was just one in a series of snow and ice-related auto crashes last week. Georgia troopers were left overworked and overstressed by the sheer volume of accidents.  Emergency services officers were stretched to the limit, and often found their route to an emergency blocked by yet another accident.  In Atlanta alone, there were 229 accidents between last Thursday night and Friday morning alone, with dozens more accidents occurring as the snow began to melt, leaving a layer of black ice on the road surface.

Unconditioned to driving in icy weather conditions, many Georgians found it impossible to avoid the slipping and sliding that results in serious crashes. One of the larger wrecks involved 29 cars near the Hartsfield Jackson International Airport.  

Survivors of auto accidents, and those who have seen property damage from the bad weather, now have to file claims. Unfortunately, many of them could find that surviving the treacherous weather was a cakewalk, compared to dealing with insurance companies who are looking at millions of dollars in claims over the next few weeks.

The Atlanta insurance litigation attorneys at the Katz Law Firm represent policyholders in cases where claims have been delayed, denied, or where insurance companies are trying to pay out a lower amount than promised, and other insurance litigation matters.

Posted By Lisa Siegel In Insurance Law | 0 Comments Permalink

This week in a stunning shake up of the financial markets, AIG, the largest property and casualty insurer in the world, was saved from bankruptcy when the federal government stepped in at the last hour with an $85 million bridge loan of United States taxpayer money. 

On Wednesday, the feds orchestrated the loan along with taking an 80 percent ownership interest in the company. That’s right, the United States government now owns the world’s largest property and casualty insurance business.   While the federal government interceding to takeover and in effect nationalize an ailing private company is not unprecedented, it was a rare occurrence in the United States until this week.

AIG’s biggest block of business, general insurance, accounts for nearly half of the holding company’s $110 billion revenue. However, AIG’s financial unit was heavily involved in providing credit default insurance, which was linked to subprime mortgages.  

As detailed in The Economist AIG suffered a liquidity crisis this week when subprime losses mounted and it had to put up more collateral with its counterparties. This caused a credit-rating downgrade, which in turn triggered margin calls. Or as one pundit put it, AIG became like Wylie Coyote stepping off the canyon; suddenly it was running with nothing but air underneath it.  

The government’s bailout structure helped AIG avoid a bankruptcy that would in turn have caused a collapse of those credit default structures in the banking and mortgage industry. It also gave AIG time so that it did not have to dump its healthy businesses in a chaotic market. 

Former Allstate Insurance Company CEO, Edward M. Liddy, was installed as AIG’s CEO when the federal government announced its rescue package. Liddy was responsible for shaking up Allstate and making it more profitable. Of note, I recently blogged on Allstate being rated the worst insurance company for claimants.    

New management is expected to start selling off large chunks of this global conglomerate in order to payback the loan within the two-year deadline.   A committee of insurance commissioners is being formed to oversee the sale of AIG’s life and property/casualty lines. 

What does this mean for the policyholders are claimants/plaintiffs currently doing business with AIG? In the insurance industry, trust is everything. When policyholders fear that insurance won’t be there to cover their losses, they will flee. A drop in AIG credit rating already gives the policyholders a right to opt out of contracts and seek coverage elsewhere.

AIG currently has $1 trillion in assets, 74 million customers and operations in 130 countries.   The bottom line is that life insurance policyholders, retirement fund annuity holders and those with policies for all types of calamities are now at risk.

If you are concerned about a claim you may have or your rights as a policyholder, contact the law firm of Robert N. Katz for a free, private consultation. 

Posted By Lisa Siegel In Insurance Law | 0 Comments Permalink