We all rely on our home owners policies and health insurance. We need them when we are vulnerable and when we can least afford, monetarily and emotionally, to fight for our rights.

That's why we need our courts to protect us in case big insurers do act unfairly. And that's why a recent Supreme Court decision is so alarming. Let the buyer beware.

We are reassured by insurance companies that we are in good hand and have a good neighbor, and often, I think most often, that proves to be the case. But some insurers have been anything but good to some of their policyholders.

On April 7 of this year, the Court rejected a $145 million punitive damages award in the case of State Farm v. Campbell. The Court found that the punitive damage award was so high that it was unconstitutional.

The policyholder was involved in a serious accident that left one dead and another disabled. State Farm refused to settle the case for the mere $50 thousand policy limit and contrary to the advice of its own adjuster, took the case to trial. The jury returned a judgment that was three times the policy limit, which personally exposed the policy holder.

As usually follows in these kinds of cases, Mr. Campbell sued his insurer for bad faith failing to settle the case for the $50 thousand policy limit. A Utah jury returned a judgment against State Farm for $1 million in compensatory damages, and $145 million in punitive damages.

Now, the U.S. Supreme Court has ruled that this punitive damages assessment is too high. It was particularly troubled by the fact that the jury considered State Farm's general, nationwide claims handling practices. The scope of consideration should have been narrower, the Court ruled. And the ratio of punitive to compensatory damages, 145 to 1, was simply too high.

I am greatly troubled by this decision. I believe that the purpose of punitive damages, which is to punish and deter wrongdoers, was met with the $145 million award.

State Farm is a large company. It has always been reasonable to ask "how much will it take for this particular company to 'get the message?'" Obviously, a mere slap on the wrist will not do the job. Perhaps even $145 million would not have done the job, but it might have been a start, a wake up call.

The facts in that case were particularly troubling, suggesting a pattern of improper claims handling procedures. At least that is what was reported, I certainly do not know if this is true. That is of special concern for people who are sometimes forced to rely on the honesty and good will of their insurance carrier. If it was true that this company did not meet its responsibilities, it would have been fair to punish the company at a sufficient level so as to send the message home. A mere $1 million dollar hit will probably not do.

What I am most concerned about is the ratio issue. The Court did not like the 145-1 ratio, 1 being the amount of compensatory damages - in other words, how much Mr. Campbell was out of pocket. If he were out more, perhaps the 145 million figure would have been upheld. Does that mean that insurers can treat small claimants poorly and not worry about it, simply because the claims are relatively small (although a million dollars is still a lot to most of us!) I think this is a dangerous message.

Homeowners often are required to file claims with there carriers and must often confront these kinds of issues. In my field, environmental law, claims are often filed for tank leaks, environmental spills, and other problems. Commercial clients often have large environmental claims. And this case applies to all policyholder claims, not just auto policyholders.

The Campbell decision is too pro-business, pro insurance industry. For the rest of us, it is not great news. This is a bad hand.

The information provided in this column is written by Stuart Lieberman,a practicing environmental attorney, and is for general information purposes only. It is not legal advice and should not be used in place of legal advice.

Stuart Lieberman, Esq., and IRED.Com, Inc., will not accept any responsibilty for any reliance on the information in this column or any damages whatsoever resulting from reading this column.