| Bad_Rich_Chic |
01-24-2005 05:59 PM |
frivolous lawsuits
Quote:
Originally posted by Mmmm, Burger (C.J.)
How can it be--if you tender to the insurance company, they'll raise your rates and not bother pursuing. By suing, you allocate the blame correctly (or more correctly). The insurance company's efficiency isn't necessarily just.
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It is still inefficient from the harmed father's p.o.v. because it will cost more than $2,500 to pursue himself and getting fees & expenses is a crap shoot. The transaction costs are too high to make re-allocation of the loss (much less proper allocation of the loss) economically feasible.
Call it a market failure. But not a frivolous lawsuit. The amount of loss has nothing to do with whether the claim is frivolous, and the fact that a deep pocket is (to some extent) at fault and thus recovery is more likely doesn't make the claim more frivolous.
But I fight the hypothetical - in almost all states rental car drivers are required to get insurance covering third parties, aren't they? File the claim against the rental insurance.
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