California Personal Injury and Insurance Blog

FAQ: What are economic damages?

Q: I have heard that I can recover economic damages after an accident. What does that mean?

This comes up primarily in the area of Prop. 213 cases. As you know from reading this blog, if you fall under Prop. 213, then you can not get money for "pain and suffering." You can only get money for your "economic damages."

So, what are economic damages? Economic damages are your money damages. In other words, economic damages are your medical bills, your lost wages, and any other money that you have to pay. For example, if you have to pay a copay to your doctor, this is an economic damage. If you have to pay to get crutches to walk, this would be an example of economic damages.

Remember, if you are a Prop 213 individual, you will only be able to recover your economic damages. Make sure you include all of your economic damages in these situations.

FAQ: What is the difference between rental and loss of use?

Okay, so your car is damaged in a car accident. You can't drive it and it is in the shop. You think you are entitled to a rental car (because you read this blog, you know you are entitled to a rental car). But what about loss of use? What the heck do you get?

This is pretty easy. If you were not at fault, the other person's insurance is going to either pay for a rental car or loss of use. In other words, you cannot collect both. However, if you do not rent a car immediately, you can collect loss of use for the days you do not rent a car.

Example: Your accident is on day 1. On days 2 through 5, you do not rent a car. On day 6, you rent a car until day 10. You get 4 days of loss of use (days 2, 3, 4, and 5) and 5 days of rental (days 6, 7, 8, 9, and 10). Rental is basically what it costs to rent a similar car to what you had. If you had a luxury car, that is what you rent. If you had a Ford Focus, then you rent a compact car.

Loss of use is generally calculated at $20 per day. For some cars, it may be more. It is usually not less. But, the $20 per day number is a good number to start with.

In the above example, you get $80 plus your actual of out pocket rental expense. They will not pay for gas or the extra insurance (which most people do not need anyway), but they will pay for tax and fees.

Sample Demand Letter

By popular demand, I am presenting you with a sample demand letter for those of you who want to try to settle your case without an attorney. A few caveats:

1. This is not the letter I use, but it is a letter similar to one an attorney would write.
2. This is not legal advice. Whether this is appropriate for you to use or not, I do not know since I do not know the facts of your case. Consult with an attorney.
3. By looking at this or using this, I am not your attorney. I am only your attorney if we have a signed fee agreement. Otherwise, I am still not your attorney.
4. This letter may not be appropriate in all situations. It is presented as a a sample only.

Now, here is the letter:

Dear Mr. XXX:

This is an offer to settle my claim with your insured, YYYY, for injuries I sustained on ZZZZ.

Liability:

In this case, the AAAA Police Deptartment investigated this case. The report, attached to this demand, shows that the police found your insured at fault because ............

OR

In this case, your insured is at fault because...............

Damages:

As a result of your insured's actions, I sustained the following injuries:

1. List injuries

2.

3.

4.

5.

My medical bills, attached hereto, total: $BBBBB These bills were incurred as follows:

1. Doctor Smith, $1,500 for (describe treatment)

2. Doctor Jones, $600 for (describe treatment)

As a result of this accident, I was not able to do the following:

1. List activities you could not do after the accident

2. Same

Therefore, I am willing to resolve my case for my medical bills of $BBBB plus $CCCC for pain and suffering. Please respond to this demand within 15 days of this letter.

Sincerely,

Your name

If you use this, and it is succesful, please let me know.

Insurance Commissioner Endorsement

After some long, hard thinking about this, I am officially making an endorsement:

Steve Poizner, Republican, for governor. Why? First, of the five others who are running, only Dale F. Ogden has any insurance experience. Mr. Ogden, while he may be a good choice, seems to have limited himself by his Small Government Pledge in which he pledges to vote against expanding all government plans. Under Mr. Ogden, the succesful low cost auto insurance program would never be expanded. That would be a loss, and it is one of the downsides to agreeing to such blanket statements.

Mr. Poizner has several things working in his favor:

1. He is not a career politician. Therefore, he can bring fresh, new, exciting ideas to the job. He also is not beholden to other politicians and does not have to worry about keeping their approval.
2. He is not accepting insurance money. This is a huge issue. Mr. Bustamante has accepted over $150,000 in insurance money and, while he gave back some of it, he has not given it all back. I think we learned from the Quackenbush administration that insurance money and the insurance commissioner just do not mix.
3. He has agreed to enforce Prop. 103. I expect Mr. Poizner to stand by his word and enforce the law of the state.
4. He has agreed to investigate the use it and lose it approach to insurance. This approach used by many insurance companies renders insurance useless. Insurance, under this approach, becomes a product that you pay for but never receive the benefits of using.
5. He has a plan to crackdown on uninsured motorists.

For those reasons, I endorse Mr. Poizner.

I would suggest that, in the future, candidates such as Mr. Bustamante take the race a little more seriously and stop writing about their weight loss and instead talk about the issues.

Insurance Commissioner Candidates: A Review

I could just come out and tell you who I am endorsing, but I would rather spend a few minutes and discuss the candidates. Then, in my next post (read: tomorrow), I will tell you who I am endorsing.

First, Tom Condit, Peace and Freedom Party. Mr. Condit supports eliminating insurance companies and using state run systems. Great. That's what we need: more government! He is comparing his single statewide auto insurance program to one in Canada. ICBC, Insurance Company of British Columbia, is one such example. One such poor example, in my opinion, primarily because it doesn't work. The other problem with this approach: there are a lot of unregistered vehicles in this state. Therefore, there would still be a lot of uninsured drivers in this state.

Second, Dale F. Ogden, Libertarian. Mr. Ogden is a third party candidate with actual insurance experience. I can't find it now, but I wish I had the quote from Cruz Bustamante when he said he had the most experience of anyone in this race. Mr. Ogden has impressive credentials. His basic idea is to reduce the size of the department, while trying to take the politics out of the office. Great ideas, but can they actually succeed?

Third is Green Pary Candidate Larry Cafiero. Mr. Cafiero apparently shares the ideas of Mr. Condit, at least to the extent that they both think there should be some sort of gas tax or registration tax to pay for auto insurance. I am not sure how that would work for our out of state visitors who would then have double coverage. And how exactly do you charge by the gallon?

Fourth, is Jay Burden, American Independent Party. I am sure Mr. Burden is a nice enough guy, but he doesn't seem to have any positions or any qualifications. If he wants to share those with us, he can do so by email to me here. I will post them for you to read.

Fifth, is Steve Poizner, Republican. Mr. Poizner is a very rich guy who has contributed over $8 million to his own campaign. Poizner's campaign is basic: enforce Prop. 103, stop the "use it or lose it" theory of insurance and fix workers compensation. Mr. Poizner has no insurance experience, but seems to be running for this job like it is CEO of a big company: get the job and then surround yourself with the right people.

Finally, Cruz Bustamante, Democrat. From Mr. Bustamante's website, it appears that he wants to be Insurance Commissioner so he can help us lose weight. I guess that would decrease the costs of health insurance premiums for all of us. Mr. Bustamante ignored my request for an interview and therefore, other than his weight loss, I am not sure what he stands for!

There you have it. The six candidates in my words. Come back for my endorsement.

More on the Workers Compensation Disaster

LA Times has a story about the workers compensation system and the mess that is created. The story basically says that profits for insurers are way up while benefits are way down!

That’s not even the whole story. The legislature has accomplished things that you never thought possible. Nah, you would think they are possible:

1. Killing an entire practice area;

2. Raising profits for insurers;

3. Reducing benefits;

4. Taking a broken system and making it worse. Example: I have a PI client who also has a comp claim. The insurance carrier denied her comp claim. The denial is clearly wrong, but the case does not have enough value that it is worth time/effort to fight it. I can't find anyone to help this nice lady. It is an absolute disgrace.

5. Scaring the public into thinking the system needs more changes.

Seriously, you could wipe out our entire work comp system, start from scratch with a program designed by high school kids, and still come out better. And, while I wish this was a joke, I think it may actually be possible. Heck, if you think you can design a better work comp system, send me your plan. If your plan is workable, I will send you a small token of my appreciation and post your plan on my blog!

Insurer Ratings

I recently had a discussion with a client about insurance companies. He had quotes from a couple of insurance companies and wanted to know which one was better. Better, of course, is a relative term, but one of the things he was looking at were the AM Best ratings.

I won't even attempt to delve into a topic like that. AM Best ratings are very complicated. But, you can go here for more information on the ratings. I will tell you this: A+ is a great rating. Anything above that is even better. I dont really worry about the ratings unless the insurance company is a B+ or worse. At that point, you want to make sure you really know what you are buying.

CSAA Sued for Discrimination

This is interesting. CSAA, what you generally think of as AAA, sells auto and home insurance. And, apparently, someone thought it would be a good idea to stop selling insurance to Chinese speaking Californians. So, a group of agents who were fired have sued for discrimination.

I always find it interesting that an insurance company makes decisions like this. The whole idea of insurance is to spread out the risk of loss among as large a group of similar people as possible. In this case, similar people would be people who live in zip code 12345, for example. Why would you want to not sell your policies to a group of people who fit this criteria? That is just bad business for an insurance company.

Interestingly, I expect to see a lawsuit by the community that was discriminated against shortly. This seems to me to be a clear violation of the insurance code and one that needs to be fixed through the court system.

Need a gift for your lawyer?

Okay, this is going to sound odd, and not every lawyer will appreciate it, but if you have a lawyer who is a bit offbeat, a fun-loving lawyer who appreciates a good joke, this is the gift. HOT SAUCE!

No, not just any hot sauce, but Contempt of Court, So Sue Me or Lawyer's Breath. Good hot sauce, great names, and all of it from a great little shop in Monterey called Slow Burn. Check out their website and if you need a gift for your lawyer, be sure to check this out. And tell them I said hi.

Don't Let Your Auto Insurance Lapse

Starting today (October 1), DMV will find out electronically if your insurance cancels. Why? Because the law requires you to carry insurance.

A little background. You have to show proof of insurance to register a car. The solution: take out insurance, register the car, and cancel it. This became common. So, the legislature took away this loophole: require electronic notice from the insurer to DMV.

This means that once your insurance lapses, DMV will know. The police will also know. You will not be able to use this loophole. Remember, there is help for low income people as well. Now, you need to keep your insurance more than ever.