California Personal Injury and Insurance Blog

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!

FAQ: Where does 1/3 of the settlement go?

I have been asked lately about how a settlement breaks down. A lot of people seem to think that there is about 1/3 of the settlement that they never see. Let me see if I can help.

When you settle a case, there is a fee agreement with your attorney. Your attorney may take anywhere from 25 percent to 40 percent (some take more). Assume that your attorney takes thirty three percent (1/3) of the settlement. That leaves 67 percent (2/3) of the settlement. Then the attorney tells you that you get half of that, or 1/3 of the settlement. Where does that other 1/3 go?

Well, in most cases, your doctor or health insurance must be reimbursed. You received treatment for your injuries. The doctor may have treated you on a lien. In that case, the doctor gets paid back. Or, your health insurance may have paid for your treatment. In that case, it may need to be paid back.

In any event, you should ask your attorney for a breakdown of the settlement. He or she should show you where ever cent of your settlement goes.

Telemarketers and Collisions: YUCK!

Well, I was going to use a stronger word, but decided against it since this is a family blog. WOAI in San Antonio has a story on its website about telemarketers who call people who have been in collisions and try to get these people to sign up with attorneys.

Technically, the telemarketer tells the person to go see a clinic to be evaluated at. The clinic then refers the client to the attorney. However, same end result: someone who has been in a collision ends up being called by someone trying to get the collision victim to hire an attorney. It is absolutely disgusting.

This should be perfectly clear: you should make the call to the attorney - not the other way around. If an attorney, or anyone, calls you after a collision, you should not hire that person. It is that simple. You may need an attorney. You may not need an attorney. But, only you know that.

So, do not fall prey to these predators. This disgusting behavior should be outlawed in all 50 states. And every decent trial attorney should support that!

Health Insurance Reimbursement

There is always a question of whether you need to reimburse your health insurer after a collision. The basic scenario: you are struck by another driver. You go to the doctor. Your health insurer pays for your treatment. They then send you a notice saying they are entitled to be reimbursed.

The largest company that handles reimbursements for insurance companies is a company called Ingenix. Ingenix is now being investigated by the NY Attorney General. While the investigation is focusing on what a doctor is reimbursed, it will not surprise me to see a review of the subrogation practices of Ingenix and other health insurers.

I will continue to follow this for you.

Diminished Value of Your Car

Everyone knows the old saying that a car is worth less after a collision. (Notice I am not calling it an auto accident anymore. Why? An accident just happens. A collision is someone's fault. When two cars collide, it is someone's fault.)  The question is can you recover that lost value, and if so, how much is that claim worth?

The simple answer is that you can recover that lost value. The problem is that it becomes a cost/benefit analysis. Does the benefit of making a claim outweigh the cost? For example, if the lost value is $500 and the cost is $600, it does not make sense. If the lost value is $10,000 and it will cost $1,000, then it probably does make sense.

So, if you decide that it makes sense to pursue, how do you determine the lost value. The first step should be to consult this website, a free tool to determine the lost value, or diminished value, as they like to call it. Once you have an idea about the value, you may want to submit it to an insurance company and make the claim. If they deny it, you would then need to retain an expert and you can determine the cost/benefit at that point.

By the way, you may have to educate the adjuster about your ability to recover diminished value.   

Allstate turns over documents - well, some

I wrote a week ago about Allstate's refusal to turn over documents to Florida regulators and the subsequent banning of Allstate from writing policies. The ban lasted a day until Florida's Appeals Court overturned it.

Yesterday, Allstate turned over documents. Well, some documents. Allstate is apparently turning over the documents in "waves." I am not sure if Allstate's spokesperson sees the pun there. After all, it is Allstate. (Waves, as in, from the ocean, which damage many Florida properties during hurricane season.)

In the meantime, Florida is going to court to try to get the Appeals Court to overturn its last decision and uphold the ban. Allstate, meanwhile, is arguing that its license can never be suspended unless the safety and welfare of Floridians is at risk. Fascinating argument, but seems weak to me.

By the way, kudos to the Palm Beach Post and Randy Diamond for great coverage of this continuing story.

Farmers, Small Claims Court and SHEESH!

Farmers Insurance is at it again! Yep, good old Farmers. Farmers, apparently, "Gets you back where you belong." Well, maybe it should be "Gets in you the back all along." (Hmmm....anyone see a future career writing jingles?

I have a client who could not settle her case with Farmers. She filed a lawsuit against their insured in small claims court. The judge ruled in her favor and a judgment was mailed out. Simple enough. Thirty days elapsed and no reply from Farmers. I told her to wait a few more days to see if the check was in the mail.

Well, it turns out that Farmers left her a message thirty seven days after the judgment came down. Farmers decided, instead of paying her, to pay the court. (A defendant who loses can pay the court in small claims court.) It will cost them an extra $25. Not a big deal, right?

Well, the catch is that the court will hold the check for 30 days. Then, it will take 4 to 6 weeks to issue a new check to my client. The result: my client doesn't get her money for 90 to 120 days after the judgment.

Why does Farmers do this? Beats me. A few options: 1. Farmers is really desperate to keep its money and needs to earn interest for that extra 30 days. 2. Farmers really doesn't want to help people. 3. Farmers wants to try to discourage people from suing their insureds in small claims court.

SHEESH! Farmers deserves some award for bad service for this nonsense.

New Article on Filing a Claim

The Sacramento Bee wrote a story yesterday about the true price of filing an insurance claim. The story, which can be found here, quotes yours truly. The Bee had readers write in with questions about filing a homeowners insurance claim. I then provided answers to questions. While the theme was the recent storm damage in Sacramento, it really applies to anyone.

And if you have a homeowner's claim, you should request my free report on the 10 Biggest Pitfalls in Filing a Homeowners Claim. Just send me an email and the report is yours!

Auto Claim Tips

Just a quick hit here. United Policyholders, one of the best groups for policyholder rights, has just released its latest version of What's UP - its newsletter. It includes my article on auto claim tips.

Give it a quick read and let me know your thoughts.