California Personal Injury and Insurance Blog

Insurance Commissioner Takes a Stand

I wish it was the California Insurance Commissioner, but alas, it is in Michigan. The Michigan Supreme Court recently ruled that an insurance company can shorten a statute of limitations to file a claim by writing a shorter time limit into its policy. Nice.

The Michigan Office of Insurance and Financial Services recently voided any policy that contains such a provision. The thinking is that this is a consumer protection issue. Consumers do not read insurance policies. (You SHOULD read your policy, but you don't.) Even people who read it, do not understand it most of the time. Therefore, in order to protect consumers, Michigan policies are going to match state law.

I think this is a good idea. Insurance policies should not be written in such a way that consumers are given less than state law allows. Insurance policies should provide people with what they think they are buying - protection. If that protection is less than state law, then the insurance companies are manipulating the system for their own benefit, not the benefit of the policyholder. It is not like you can negotiate the terms of an insurance policy, after all.

More on Excessive Profits

I wrote over the weekend about Allstate's excessive profits in Texas and the refund ordered by the Texas Department of Insurance. Not to be outdone, California's Department of Insurance has announced they are starting an investigation into insurance companies excessive profits.

Coincidence? Probably not. A bit of politics? Probably. Good for consumers? Definitely.  Let me explain.

It is probably not a coincidence that insurance companies are making excessive profits in various parts of the country, if not in the entire country. Rates are set and, despite monitoring, you don't know how profits will be until they are announced. Rates are part of the equation, but costs, including claim payments, are the other part of the equation. If claim payments go down, insurance companies make more money. Rates should then, in turn, decrease.

This is probably a bit of politics since our insurance commissioner is running for a new office. But, in the end, it doesn't matter since this is good for consumers. Lower rates, more competition and more regulation are all good things.

Allstate Ordered to Pay Refund in Texas

Allstate has been ordered to refund $60 million (or about 37 dogs in Oregon, if you read my last post!) and reduce rates by .2 percent in Texas. The Texas Department of Insurance found that Allstate's rates were excessive - again.

Apparently, Allstate had to refund $60 million in 2004 as well. Apparently, every two years or so, Allstate has to refund money. Okay, I know that is a bit of a stretch since it has only happened twice, but it seems like too much of a coincidence to me that Allstate gets dinged in 2004 and 2006.

This supports my advice: you need to shop around, a lot, for insurance. Do not just take what your agent is offering you. See who has the best rates, since rates can fluctuate wildly.

How Much is The Doggie in The Window?

An Oregon family thinks their dog is worth $1.6 MILLION! Their dog was run over by a neighbor and they are suing to recover emotional distress, in addition to economic loss.

Now, before I start this, I should admit my bias: I am a dog lover. I grew up with dogs. I currently have two dogs. The dogs are sitting with me now as I write this. And putting a dog down is one of the hardest things I have done.

With that being said, my dogs are not worth $1.6 Million. They are not even worth $600,000. Heck, $60,000 seems like a huge stretch to me. I love the little guys, but they are dogs.

In California, dogs are generally seen as personal property. Therefore, if they are injured, you can recover vet bills, up to the value of the dog. And, being the nice guy I am, I once paid a woman the vet bills even though they were more than the value of the dog. But, that is about it.

I feel for this family. However, giving them any money for emotional distress sets a bad precedent. Remember when your dog is injured, in California, it is the cost of the vet bills that you can recover.

Copy of your policy

When you buy insurance, your agent gives you a copy of your policy. And then the insurance company starts adding endorsements. Some endorsements help you, some take away coverage and some are completely meaningless. However, which are which?

There is an easy way to figure this out: every other year ask your agent for a certified copy of your policy. This is different from a regular copy. A certified copy comes from underwriting and certifies that this is the policy and all endorsements that effect your coverage. Keep track of this copy and put it away somewhere safe. Then, when you have a claim, you will know what is, and is not, covered.

Med Pay Choices

You have choices when it comes to med pay. Of course, if you don't ask about them, no one will tell you about them.

Some of the basic choices are whether the med pay coverage is primary or excess. Primary means that they pay before any other insurance you may have, such as health insurance. Excess means that they pay after any other insurance pays. Which is better? It depends on your situation.

You also have choices regarding reimbursement. Some insurance companies are now offering a choice as to whether you have to reimburse them upon settlement of a claim with the other party. Of course, not reimbursing them costs more, but it is not much more in terms of premium. Some insurance companies are not offering any choices, but you have to check with your agent.

When shopping for auto insurance, ask about med pay coverage. You may have choices that you did not know about. This coverage can provide important protection for you and your family.

Don't Talk to The Insurance Company

Has anyone ever wondered why the insurance company is always so fast to call you after an accident? The main reason: it gives them a chance to talk to you before you have figured out what you want to do.

Let me give you an example: pretend you get in an accident today. You report it to the other person's insurance company. Tomorrow they call you. They ask for a recorded statement, but since you have been reading my blog, you know not to give them a recorded statement. But, you still talk to them. And you answer questions and then.............drum roll please, they make an offer that you reject.

But, you don't just tell them no. Instead you usually give them an explanation about why you don't think the offer is fair. They, in turn, use this against you later when your case is ready to settle.

This is not just you, but everyone. My advice: ignore their calls until you have spoken to an attorney and know your rights.

Sorry

Sorry for the delay in posting. I have been working on a few projects. Some of them are designed for other attorneys and some are designed for you, the general public. I don't want to give away too many secrets yet, but I am working on a few projects to help you understand insurance better. One project will explain insurance policies to you and one will explain to you your rights in California.

In the meantime, starting next week, I will be blogging again regularly. Look for more updates and more news that effects you!

FAQ: Insurance Company Blames Me - Part 2

I previously posted about what to do if you have a claim and your insurance company finds you at fault. And someone pointed out a fault in my post. So, with that, I modify my post.

In the previous post, I explained what to do when your insurance company blames you for an accident. I then said that those were your only options. Well, I left one out. You can sue your insurance company.

Now, don't think that this is easy or cheap. You can sue your insurance company for the increase in premiums. However, this may not be a lot of money. If your increase in premium is $1,500 over the life of the surcharge, you have a small claims court case. You cannot retain an attorney. If you win, expect the insurance company to appeal. Then, you can retain an attorney, but it can be expensive.

I do have a potential solution. If you think your insurance company has found you at fault erroneously, you should send an email to the Foundation for Taxpayer and Consumer Rights and let them know about your situation.

State Farm Sued Over Katrina Losses - Again

State Farm has been sued AGAIN over losses from Katrina. This time, the allegation is that they used a doc in a box, or in this case, an engineer in a box. The allegation is that the company started with the conclusion that losses were not covered and told their engineers to come up with a report to fit the conclusion.

The general rule is that you start with the expert report and use that to make your conclusion. If State Farm did this backwards, not only are the losses covered, but they have acted in bad faith, in my opinion.

It is quite simple: the insurance company takes your money and promises to pay if you have a covered claim. You are only buying a promise. If you cannot trust that promise, and if the insurance company is going to try to find ways out of that promise, than you have bought nothing.

I will definitely be following this case for you, but for those of you who have claims and the insurance company sends out an expert or experts, you need to talk to an attorney and decide if hiring your own expert is worthwhile.