California Personal Injury and Insurance Blog

Allstate Pays In Small Claims Court

I thought I would share a story with you about a case I handled. I have a client who sold a car. (I am not naming her, but she has given me persmission to write about this.) A couple of days after the sale of the car, the new owner was in a car accident. He, of course, had no insurance and she had removed the car from her insurance, just as I recommend. Allstate insured the other party involved in the collision.

Allstate sent her a letter demanding payment after pulling up state DMV records. Because of the short time frame between the sale and the collision, DMV still showed her as the owner. She provided the insurance adjuster with a copy of the DMV Transfer of Title that showed she had sold the car. The adjuster did not care and sent her to collections. A collection agency then called her.

She provided the collection company with another copy of the DMV Transfer of Title. The debt collector did not care either. Allstate retained an attorney from Los Angeles and sued her. I then got involved and sent a letter to the attorney with ANOTHER copy of the Transfer of Title. He told me that it was not evidence that she did not own the car. Of course, by then, the owner as in prison. My client owned a house so Allstate tried to get a settlement out of her. The lawsuit was for about $3,500.

I filed an answer and a cross complaint against the original owner. I served discovery on Allstate's attorney. The responses were not sufficient so I had to file a motion to compel. My motion was granted with sanctions. Allstate dismissed the complaint, but ended up paying me $1,200 in sanctions.

I then helped the client file in small claims court against Allstate for malicious prosecution. Today was the hearing for my client. An Allstate adjuster showed up and offered $5,000 to my client. She accepted and dismissed her case.

So, in summary, Allstate tried to bully my client in to paying money she did not owe. Instead of collecting $3,500, they paid out $6,200. Amazing! This could have been all avoided if they would have just done the right thing and stopped pursuing her when they had proof she did not own the car.

Do not let the insurance company, or an attorney or a debt collector, bully you.

Health insurance to be reinstated

The California Department of Managed Health Care did a good thing. It brokered a deal with Health Net and Kaiser to reinstate health insurance policies to 1,200 people whose policies were rescinded by the insurance companies. The State is trying to reach a similar deal with PacifiCare, Blue Shield, and my favorite, Anthem Blue Cross. (By the way, adding Anthem to their name does not change the humor to the YouTube video.)

In a nutshell, these people had policies cancelled when they started to run up large medical bills. The insurance companies would dig through to find some technicality to use to cancel coverage. The DMHC determined this was not proper underwriting. Health Net, in fact, agreed to a fine, but admitted no wrongdoing. (For once, wouldn't it be nice for someone to actually admit wrong doing a la Charles Barkley.)

This is good news for people who have had policies cancelled.

Uninsured and in a collision: What happens?

What happens if you are in a collision and you have no insurance? Here is the story of how things happen.

Driver A (the other guy) turns a claim in to his insurance company. They pay for his damage. They then figure out you have no insurance. They turn the matter over to a collection agency. (Yes, they have an in house subrogation department, but they do not like dealing with people who have no insurance.) The collection agency starts to call you and harass you. They also tell you that your license can be suspended.

Pause in the story for this. Yes, your license can be suspended. DMV usually will not accept a SR-1 after 10 days. They may, but usually not. However, they do not need that to get your license suspended. If you have a judgment against you for a traffic collision and it is not paid, your license cna be suspended until such time as you pay the judgment - in full. That could be 30 days or 30 years.

Back to the story. If you do not agree to pay them, then they retain an attorney who will sue you. You will probably be sewer served. Check your county court regularly to see if you have been sued. If they win, you pay, file for BK or they suspend your license.

New York Times: Insurance Coverage Article

The New York Times wrote a great piece on car insurance for modified cars. (Look for the quote from me.) The introduction to the piece sums it up nicely:

Few drivers realize that aftermarket parts are generally not insured, so if you have an accident in your modified car, your insurer is not likely to reimburse you for the damaged add-ons. Even worse, in some cases insurers may deny the whole claim or cancel the policy.

The bottom line: if you have a car with modifications, check it once, check it twice and check it three times to make sure your insurance policy covers you. If you have any questions, ask your agent and get it in writing!