Fred Loya Insurance – Lowball Offers & Bad Faith

If you have a claim against a negligent driver insured by Fred Loya Insurance and feel that the company is mistreating you, they very well could be. If Fred Loya Insurance has been jerking you around with lowball offers on your injury claim, you don’t have to take it. If Fred Loya Insurance continues dragging the claim out with no offers, give us a call.

If you sustained a serious injury caused by a Fred Loya insured driver and the insurance company has delayed settling your claim for months or even a year or more, and your current attorney is now saying, “They finally offered their $15,000 policy limits — we have to accept this and settle your claim.” Please know that this is not always the case.

An insurer must fairly and promptly settle a claim, or they can be sued. If a case goes to a jury and the Jury awards $1,000,000 then Fred Loya Insurance would be on the hook if they had a reasonable opportunity to settle the case within their policy limits and refused to timely offer up those limits.

We are experienced at holding Fred Loya Insurance accountable for its actions. At AutoAccident.com, we handle insurance claims against difficult insurance carriers like Fred Loya Insurance.

We know many of their tactics like lowball offers, minimizing legitimate injuries and medical expenses, trapping unsuspecting people into recorded statements, and lengthy delays in settling cases.

These mishandled claims can turn into “opened policy” lawsuits that aren’t necessarily limited by a minimal Fred Loya Insurance policy limit. A mishandled insurance claim can result in a bad-faith lawsuit based on failing to settle fairly and promptly.  Fred Loya can also lowball their own insureds on uninsured and underinsured motorist cases. We have stood up to these types of shenanigans. Contact us today at (916) 921-6400 for free, friendly advice.

Although Fred Loya Insurance isn’t as large a company as some of the best-known brand names like Allstate, Farmers, and Geico, the company must still abide by the same rules and practices as the more prominent auto insurance companies. 

It is more than big enough to have lots of experience handling claims and paying out as little as possible in settlements.  

And since one of their focus areas in their marketing is toward “high risk” drivers with bad driving records, they are exceptionally experienced at handling claims involving these problematic drivers.  There are several things to watch out for when you have a claim against Fred Loya Insurance — things for which an experienced personal injury attorney may be able to help you if you’re being mistreated in your claim.  If you have a claim against Fred Loya Insurance, read on for more details.

Fred Loya Insurance is an automobile insurance company based in El Paso, Texas, that sells motor vehicle insurance policies in several U.S. states, including California, Texas, Nevada, and Arizona in the West, Illinois, Indiana, and Ohio in the Midwest, and Georgia and Alabama in the Southeast. The company was started by its namesake and first chairman, Fred Loya Sr., in the 1970s. Mr. Loya had experience as an insurance agent. He believed an opportunity was available to build an auto insurance company focused on the Hispanic market and lower-income customers.

Fred Loya Insurance has over 5,000 employees and half a billion dollars in annual revenues from its business activities in about a dozen different states. Unfortunately, it has faced and continues to face criticism for a number of its insurance claims practices and business practices in general, including actions by insurance regulatory agencies and individual claims of bad faith insurance practices.

In trying to focus its sales toward Hispanic customers and low-income customers, Fred Loya Insurance cleverly decided to place its several hundred agents in spots where these folks might spend time, including the physical locations of business chains that already market themselves to these customer demographics — businesses such as Walmart stores, Big 8 Food Source, Fiesta Mart and Fiesta Whole Food stores, and others.

Fred Loya Insurance markets itself directly in many different broadcast and print media, including Spanish and English language marketing. Its website brags about spending more than $26 million on marketing in one year alone in 2013.

As we mentioned above, a major marketing focus of Fred Loya Insurance is on potential customers who are low income. As a result, the company mainly sells low-cost, minimum coverage policies. They also focus on high-risk customers — folks with bad driving records — to whom they also sell minimum coverage policies.

Most states have specific legal requirements for the minimum coverage that auto insurance policies sold in the state must offer. In California, for example, the minimum required coverage is $15,000 bodily injury coverage per person, $30,000 bodily injury coverage per incident, and $5,000 property damage coverage per incident. Since the revenues on insurance policies go up along with the amount of coverage, a company that sells mostly minimum-coverage policies will usually work especially hard at pinching pennies to remain profitable. Read on to see how too much penny pinching can negatively affect an auto insurance company.

Automobile insurance is a numbers game. The insurance company bets that what they charge us in annual premiums will cover the amount they have to pay out in claims settlements, leaving them with a healthy yearly profit.  Among the significant numbers in this game are:

• The average annual auto insurance premium in the U.S. is more than $1,500 and has shot up nearly 30% over the last 10 years, even though rates of significant injuries and deaths have remained essentially flat — the U.S. saw 11.05 deaths per 100,000 population in 2009 versus 11.18 per 100,000 population in 2018. 
• Rates vary greatly based upon location, with some U.S. cities having average annual auto insurance premiums over $6,000 – more than 4 times the average nationwide. 
• Annual premiums depend not only upon location but also on car costs and car types.  One study found that the least expensive cars to insure in 2020 included models as diverse as the Subaru Outback, the Jeep Wrangler, and the Ford F-150. 
• Different auto insurance companies tend to focus on different drivers, especially based on driver age.  The same 2020 study found that average “minimum” insurance policy rates for 25-year-old drivers (considered a relatively high-risk age group) varied from $496 annually with USAA to $786 with Allstate.  The cost range for “full coverage” was even greater, from $1,423 with USAA to $2,588 with Allstate. 
• Electric and hybrid cars are relatively more expensive to insure due to the higher average cost to repair or replace their engines and battery systems, running about one-third more costly than similar conventional models. 

Although it’s not a giant insurance company like State Farm or Allstate, Fred Loya Insurance is still big enough to handle its own claims with in-house adjusting staff and legal counsel. Auto insurance, in general, is very much a numbers game — what’s the most a company can charge for a particular policy and still remain competitive against other insurers, and how little can the company payout on claims that are presented against those policies. There are several tools employed by auto insurance claims departments and defense counsel in general to delay and minimize claims settlements, including:

• Quick, minimal, early offers to settle, convincing uninformed injury victims to take quick cash offers for far less than their full claim value.
• Lowballing or denying legitimate claims, because sometimes the injured claimant will simply take the insurance company’s word for it and either not pursue a valid claim or accept a sub-standard settlement offer.
• Delay, delay, delay. Every day’s delay in settling and paying a valid claim is an extra day that the insurance company can hang onto the settlement funds and earn a few cents or dollars more on their investments – across many thousands of claims, those add up to big numbers at the bottom line.
• Using claimants’ own words against them, by getting recorded statements in which claimants who aren’t careful unintentionally give the insurer valuable information to use against them.
• Attacking the valuation of medical bills and other monetary damages, since these – along with the diagnosed injuries – are a primary factor in determining claim settlement values.

An experienced personal injury attorney will have the skills and resources necessary to deal with these tactics.

Beware of Giving Recorded Statements to Fred Loya Insurance 

Typically, one of your first calls regarding a new auto insurance accident claim will involve the insurance adjuster asking for a recorded statement.  Part of this is just the insurance company trying to get basic facts and details of the accident and your injuries and monetary losses. Still, a bigger part for them is trying to get an injured claimant to say things on a recorded line that may damage their claim in the long run. 

If you’ve been injured by a Fred Loya Insurance driver and they call to ask for a recorded statement, remember that you are under no obligation to give one.  Imagine those crime dramas instead on television and the police reading someone being arrested their rights — the insurance company can and will use anything you say in a statement against you if they can.  But if you do give a statement, remember:

It’s important not to give any opinion about who was responsible for the accident — saying that you might have even been partially accountable in some minor way could ruin your chances of having a successful claim resolution.  Remember that you are not a police officer, auto crash reconstruction expert, lawyer, or insurance adjuster who has handled hundreds or thousands of car crash cases — you probably don’t have all the facts. You certainly don’t have the expertise to be giving legal opinions about who was or wasn’t responsible for the accident. It’s imperative not to guess or make assumptions about what did or didn’t happen.  Simply decline to answer those kinds of questions.

It’s also essential not to discuss the details of your injuries. It’s enough to simply say that you were injured and are getting medical care for those injuries but that you’re not ready to discuss the details.  In the long run, the insurance company is likely to have the medical records of your treatment presented to them in a formal settlement package as proof of your injuries and treatment. If you speculate in an early statement to the insurance company as to how bad (or not so bad) your injuries might be, what the doctors’ diagnoses might or might not be, what treatment you may or may not be prescribed, etc., they will compare each and every bit of speculation with what is actually recorded by your doctors in the medical records.  Anything that doesn’t agree 100% is something they will try to use to pick apart your claim, limit you to claiming only specific injuries, limit you to claiming only certain treatments and medical expenses, and so forth. 

Don’t Accept an Early Lowball Offer from Fred Loya Insurance 

No one knows early on in an injury claim what the full value of your claim may be — it depends primarily upon your injuries, how well you heal up from those injuries, and the nature and cost of medical treatment you receive.  Early on, even your doctors are only making educated guesses about what the course of your healing and treatment may be.  But the adjuster from Fred Loya Insurance, like any auto insurance adjuster, will have a pretty good idea of the minimum value of your injury claim.  So, they will often make an immediate offer of a few thousand dollars (always less than what they think the actual minimum claim value could be) to “get the claim resolved” and “make the hassle go away.” Do not listen to these early, lowball offers — accepting one is almost certainly cheating yourself out of a fair settlement to your claim. 

Don’t Let Fred Loya Insurance Unfairly Reduce Your Medical Charges and Claim Value 

The insurance adjuster may ask you upfront for copies of your medical bills so that they can “fairly compensate you” for those bills.  However, it will regularly happen that the adjuster will later inform you that they had your bills “submitted for review” by a billing expert who found that the amounts charged were unreasonable. Isn’t it odd that these “experts” always find that the amounts charged were unreasonably high instead of unreasonably low?  The adjuster knows that the total amount of the medical charge is a significant element in determining a claim value. If their “expert” can magically take $5,000 in medical bills and turn them into $2,500 of “reasonable charges,” they will later argue that the fair value of your claim should only be half as much. 

Don’t Let Fred Loya Insurance Ignore Significant Parts of Your Injury Claim 

Insurance adjusters will focus on the claims you make to them and selectively ignore those items you may forget to mention. Many folks may think that a “bodily injury” claim only involves the diagnosed injuries and the medical expenses for treatment they have received.  This ignores several other elements of a bodily injury claim — and if you forget to bring them up, then the adjuster from Fred Loya Insurance certainly isn’t going to remind you about them: 

• Medical expenses for future care.  Many injuries will have long-term or permanent physical consequences that are likely or even certain to require medical care in the future.  An injury claimant is entitled to compensation for these future expenses. 
• Pain and suffering.  Beyond the simply physical injury that an auto accident may cause are the pain, suffering, anxiety, embarrassment, and general hassle that a person is put through due to the injury.  This is a major part of any bodily injury claim’s value. 
• Lost wages.  If you have lost time from work due to an injury in an auto accident, you are entitled to be compensated for any lost wages.  If you used paid time off benefits, you are entitled to be compensated for those.  People who are self-employed or work on a contract are entitled to compensation for their lost income resulting from an injury. 
• Loss of consortium.  Suppose someone is injured in an accident, and those injuries interfere with their relationship with their spouse and their ability to maintain their home, household, and family. In that case, their spouse may have their own claim against the negligent defendants for loss of consortium. 
• Future losses.  In addition to compensation for expected future medical care, someone with long-term or permanent injuries is also entitled to compensation for any of the other items described above — pain and suffering, lost wages or income, loss of consortium — or any other ongoing losses that are reasonably expected to continue into the future. 
• Punitive damages.  Remember that one of the types of drivers that Fred Loya Insurance specifically markets to are high-risk drivers with bad driving records.  If one of their drivers was especially grossly negligent in causing an accident — driving drunk, driving recklessly — then punitive damages for that behavior may also be significant.  Fred Loya’s insured would need to pay punitive damages, but there are ways to ensure this occurs. 

Fred Loya Insurance has some problems with public perception and reputation, generally involving complaints about its claim handling practices:

• The website ConsumerAffairs, for example, shows the company with a rating average of 1.1 stars out of 5 based on more than 250 reviews.
• The company has a 1 out of 5 rating with the Better Business Bureau in its hometown of El Paso, Texas.
• Some years ago, the company was fined $300,000 by the Texas Department of Insurance for “unfair and deceptive business practices.”
• The company was sued in bad faith insurance practices lawsuit in New Mexico for refusing to pay its own policyholder’s full damages in an uninsured motorist claim.
• The California Department of Insurance recorded 40 “justified complaints” against Fred Loya Insurance over three years.
• The company faced a class-action lawsuit in New Mexico (Warlock v. Loya Insurance Company, Case No. D-202-CV-2012-01260, in the Second Judicial District Court of New Mexico) for unfairly denying uninsured and underinsured motorist claims on UM coverages that had been allegedly waived by the policyholders but not adequately documented by the company.

As an auto insurance company with primarily minimum-coverage policies, fewer claims against its policyholders actually make it to a jury trial, although many, many claims against Fred Loya policies have had to have lawsuits filed to push the company into a fair settlement.

However, an excellent example of how unfair claims practices can backfire on a company like Fred Loya Insurance is a case that recently went to trial in Orange County, California. The plaintiff was a middle-aged, Spanish-speaking woman employed as a janitor. The defendant, insured by Fred Loya Insurance, hit the plaintiff’s car, causing significant injuries to the woman, including an elbow fracture that left her with a 30% reduction in range of motion and other substantial limitations in daily life and work.

The defendant had a minimal “15/30” bodily injury liability policy with Fred Loya Insurance. Now, an insurance company ordinarily is generally only responsible for paying out claims damages up to its coverage limits on a bodily injury claim like this, so long as it does so promptly and fairly. Nine out of ten insurance companies would have immediately paid their $15,000 coverage limits in exchange for a release from the injured woman acknowledging that their negligent driver would have no further legal exposure for the injury claim. Fred Loya Insurance decided not to promptly pay the $15,000 that was due to her elbow fracture injury but to delay the case resolution instead.

The injured woman’s attorney argued (correctly) that this failure to promptly pay a minimum policy coverage for such a significant injury as a fractured elbow had “opened the policy,” meaning that the defendant driver and Fred Loya Insurance would now be responsible for the full value of any verdict eventually awarded in the case. After wasting more than four years on delaying tactics and lowball offers, the Fred Loya-insured defendant was forced to face a jury trial that eventually resulted in a judgment of more than $3.1 million being entered against him.

An insurance company in this position will usually resolve the judgment promptly since it would otherwise very likely face a bad faith claim from its own policyholder for its apparent failure to resolve the claim years earlier when it had the opportunity to pay on a policy limits demand and secure a release for its policyholder from further legal exposure.

All the things above are elements of a bodily injury claim that an experienced personal injury attorney will have the skills and resources to deal with.  The adjusters and defense attorneys employed by Fred Loya Insurance are trained and experienced in the techniques to persuade people to settle their injury claims for less than their full claim value — that’s how they keep a big bottom line for their company.  Individuals who go to battle against them on their own do so largely unarmed, with poor chances of getting full compensation for their injuries.  This is where and how an experienced personal injury attorney can benefit someone who has been injured in a motor vehicle accident involving a Fred Loya Insurance driver. 

View this video from a local news station in Georgia discussing complaints about Fred Loya Insurance’s business practices in that state:

If you or a family member has been injured in a motor vehicle accident and find yourself dealing with Fred Loya Insurance, please reach out to us today. We are experienced in dealing with this company and other problematic insurers. Please call us at (916) 921-6400 or (800) 404-5400 to speak with our injury attorneys and receive free, friendly advice about your potential injury claim. You can also reach us by using our online contact form.

We are proud to be members of the Million Dollar Advocates Forum and the National Association of Distinguished Counsel.

Read more about us, including our case history of verdicts and settlements and our client reviews on Google, Yelp, and Avvo.

Editor’s Note: This page has been updated for accuracy and relevancy [cha 4.18.22]

Image by Tumisu from Pixabay

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