THE TRUTH ABOUT THE COFFEE BURN CASE

(Are the trial lawyers really the villains?)

It seems appalling that one person could be awarded millions and millions of dollars merely because they were burned by a cup of coffee spilled at a fast food restaurant. How in the world could a jury award such an enormous sum of money to someone under these circumstances? In other words, what is this world coming to?

The truth of the matter is that the trial lawyers determined, through a process known as discovery, that the chain had performed an economic evaluation as to whether or not it was more profitable to keep the coffee at extreme temperatures and pay the burn claims or whether they should reduce the temperature in concern of its patrons. The internal memos and other documentation divulged that the company was very much aware that coffee kept at an extreme temperature remained fresh which reduced the cost of the coffee as well as the labor cost in conjunction with re-brewing another pot. The company averaged out its monetary expenditures for “burn claims” and decided that it was more profitable to pay the claims and keep the coffee as hot as possible.  In a nutshell, in pursuit of the all mighty dollar, the company disregarded the safety of its patrons. This inflamed the jury and consequently a tremendous award was granted to the plaintiff in that case.

Unfortunately, when the media picked up on the story, it did not disclose all of the facts leading the general public to increase its disdain for trial lawyers.

THE RESULT

Without the United States Government having to develop another law for us to suffer under, a group of trial lawyers got the attention of a major corporation through the judicial system and from that date forward one could order a cup of coffee at a fast food chain without fear of suffering second or third degree burns.

WHAT YOU SHOULD KNOW ABOUT YOUR CAR INSURANCE

Kelly heard an ad on the radio about saving money on her insurance premium. She called the toll free number and switched her insurance, saving approximately $100.00 a year. What Kelly did not realize was that her coverage was reduced. Shortly thereafter, Kelly was involved in a collision, which was caused by the other driver, and Kelly incurred medical expenses exceeding $50,000. The at-fault driver was a Hispanic transient worker with no assets located in the United States.  In addition, the at-fault driver’s car insurance had a liability limit of $25,000. Upon discovering the extent of Kelly’s injuries, the at-fault driver’s insurance company sent her a check for $25,000 and said “Sorry, that’s all we have”. Kelly’s attorney examined her policy and determined that she had recently reduced her Uninsured Motorist Coverage from $100,000 to $25,000. Because, in North Carolina, the sum paid by the at-fault driver’s company operates as an offset against one’s own Underinsured Motorist Coverage limit, Kelly could not go to her company to obtain any funds. Had she not switched companies, she would have had an additional $75,000 to obtain, not only to cover medical expenses but to be reimbursed for lost wages, pain and suffering, permanent injury, etc. Of course, Kelly could file suit against the at-fault driver but it would be a waste of time due to the fact that the at-fault driver had no assets to obtain and apply to any judgment.

CAN THIS HAPPEN TO YOU?

We suggest that you examine your automobile insurance policy. Certainly, everyone wants to get the best deal available but it is important to understand what coverage is available before you compare prices. Understanding your coverages is important in an effort to assure that Kelly’s story does not turn into your own. After making a determination of coverages that you believe you need, you should obtain quotes at different deductible levels. Insurance companies do not want to pay a lot of small claims and therefore will usually give substantial “price breaks” for one who will select a higher deductible.

Automobile insurance is actually a package of different coverages. Some coverages protect you and your family (liability) and some coverages protect your vehicle (property damage).

LIABILITY COVERAGE

This type of coverage is designed to pay defense cost if you are sued; to pay for your medical expenses in certain situations; to pay for your vehicle damage; and, to pay others personal injury and property damage sums when and if your vehicle is involved in a collision and the driver of your vehicle is at-fault. Some of these coverages are explained briefly as follows:

a) BODILY INJURY LIABILITY (BI) ­ This coverage is required by the states. In North Carolina the minimum limits have recently been increased to $30,000 per person and $60,000 per accident. This coverage pays damages to others that you are legally liable to pay if your automobile has been involved in a collision and the driver of your car is at-fault. This coverage is extremely important and it is recommended that you consider purchasing at least $100,000/$300,000 in limits. If you financial standing is such that you can afford more, you may consider an “umbrella policy” which can provide up to one million dollars in coverage. This will provide some protection in the event your vehicle is involved in a collision which causes very serious injuries to the driver and passengers of the other car. If the limits are not satisfactory to cover the injuries, you may be faced with a lawsuit, which could place your personal assets in jeopardy.

b) PROPERTY DAMAGE LIABILITY (PD) ­ This coverage is also required by the states and pays for the damages to someone else’s property.  The property may include not only their automobile but for items within their car (Television, tools, etc.) and structures (building, fence, etc.). We recommend that you consider limits of not less than $50,000. There are many vehicles on the road now which have values in the 40k range. Again, if your limits are too low to cover the damage, your personal assets may be in jeopardy.

c) MEDICAL PAYMENTS (MED PAY) ­ Very few policyholders understand this coverage. It will pay to you, your family members and passengers medical expenses and funeral bills up to the limits, regardless of fault. You can also collect med pay if you are a pedestrian or a passenger in another vehicle not covered by your policy.

We recommend coverage of at least $5,000 per person. This type of coverage can come in handy if you are injured at the fault of someone else and his or her insurance company does not expediently accept liability and agree to pay your claim, which happens quite often.

d) UNINSURED MOTORIST AND COMBINED UNINSURED AND UNDER INSURED MOTORISTS’ COVERAGE (UM/UIM) ­ This is the type of coverage Kelly needed and, incidentally, is the most reasonable as it relates to rates. You can select only UM coverage, which will pay you for injuries and property damage if the at-fault driver fails to have insurance. But, if you select the combined coverage (UM/UIM), your policy will also provide the difference if the person who caused the accident does not carry sufficient limits to cover the damage. Again, we recommend at least $100,000 in coverage in each category.

PROPERTY DAMAGE

a) PHYSICAL DAMAGE COVERAGE (DAMAGE TO YOUR AUTO) ­ These coverages may be purchased at your option to repair auto damages. They include the following:

i. COMPREHENSIVE (OTHER THAN COLLISION) ­ This coverage will provide expenses for specific types of damage. Most of these claims are filed for glass breakage, automobile theft, collision with an animal, flood damage, etc. To some extent, it also pays for a rental vehicle if your car is stolen.

ii. COLLISION ­ You can only have this coverage if you have also purchased comprehensive described above. This provides monies for you to repair or replace your car if it collides with another object (not an animal which is covered by comprehensive). There is a minimum deductible of $100.00 and the rate decreases if you choose a higher deductible.

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