Ricky Melendez has a right to be a bit confused. Melendez was driving to the grocery store when a 16-year-old driving a stolen sport utility vehicle ran a red light and crashed into his Toyota Camry. The driver, Keontae Brown, was going at 112 mph. Now, Geico has paid the families of the boys speeding in the stolen car damages in a decision which is precisely why insurance companies are blamed for fueling strike suits and frivolous claims.
A strike suit is an action that is brought for the primary purpose of securing a private settlement – often from insurance companies to avoid the costs of litigation. In this case, there was a limit of $20,000 on the insurance policy so Geico simply paid out — ignoring the criminality of the teenagers, the injuries to Melendez, and the chance that others could have been killed by the reckless conduct.
Notably, the teens were Kamal Campbell, 18, and Deyon Kaigler, 16, were also arrested and described by police as “prolific offenders” who raced other teens in a second stolen car, a Chrysler Sebring. All six teens tore through town at over 100 mph. The had been ‘running in tandem’ since they stole a Ford Explorer and a Chrysler Sebring on Thursday, Pinellas County Sheriff Bob Gualtieri said Sunday morning at a press conference.
Killed in the course of this crime were three of the teens: Brown, Jimmie Goshey, 14; and Dejarae Thomas, 16. Keontae Brown’s 14-year-old brother, Keondrae, was the only survivor from the stolen Ford Explorer. He was later charged with grand theft auto. Two other teens, Kamal Campbell, 18, and Deyon Kaigler, 16, were also arrested.
So three dead, two severely injured, and three injured in a felony crime involving two stolen cars . . . and Geico pays the culprits.
All of this because Melendez’s car insurance had a$20,000 limit and the company wanted to save money on litigation. The chances of a verdict in favor of the families, even if there was some fault by Melendez (which the police found none) are slim. It is a morally bankrupt decision by Geico to pay the culprits rather than fight on principle.
Geico has provided the very definition of a “moral hazard” when a contract or financial arrangement creates incentives for the parties involved to behave against the interest of others. In this case, it provides an incentive against its own drivers. While Geico’s lawyers priced out the case, it has undermined its own customers in paying out damages for those who engage in the most reckless and lethal conduct on our roads.
What do you think?