California Personal Injury and Insurance Blog

Liability: How is it determined?

In yesterday's post, I wrote about the proper investigation of an insurance claim: coverage, liability, damages. I am going to expand more on liability today. (Coverage is a lot more complicated. Liability is a better starting point for lay readers.)

Liability is basically "Who is at fault?" The easiest case to examine is an automobile collision. Two cars hit and someone must be at fault. How do you determine fault?

A good starting point is the police report. Why is it a starting point and not the ending point? Because a police report, in California, is not admissible evidence. A jury does not get to see the police report. Furthermore, the police report may be based on incomplete evidence, missing statements or may be inconclusive. But, it helps to start with the police report.

After reading the police report, the insurance company should talk to its insured. As an insured who has a claim made against your policy, you must cooperate with the insurance company. In other words, give them a statement about what happened. Answer the adjusters questions and give your side of the story.

After the insurance adjuster has talked to its insured, the adjuster should next try to talk to the other party. I recommend that if you are the "other party," you do not give a statement to the insurance company. It is not required. However, the adjuster will want to talk to you about the case. If no one is injured, you can talk to the adjuster. If there is an injury, DO NOT talk to the adjuster.

The adjuster should then talk to any independent witnesses. Someone's brother who was in the car is not an independent witness. An independent witness is someone who is not related to the parties, does not know the parties and saw what happened. Seeing the aftermath of a collision does not make a person a witness to what happened in the collision.

Finally, the adjuster should visit the scene of the collision. It is important to see where the collision happened, look for debris in the roadway or other signs. In the case of a disputed light, where each party says they had a green light, it is important for the adjuster to see the light and time the sequence of the light.

There, in a nutshell, is the proper method of conducting a liability investigation. Interestingly, a law firm should also speak to the parties, look at the scene and talk to witnesses.

In future posts, we will discuss liability and damages. Remember, if you have questions on an insurance claim email me.

Insurance Claims: An Overview of the Investigation

I get a lot of people who have questions about an insurance claim and do not understand why the claim is handled in a certain manner. Sometimes, the potential client has misunderstood. Sometimes, the adjuster has made a mistake. Sometimes, no one knows what is supposed to happen so no one has any idea what is actually going on. So, here is an overview of how a claim should be handled.

A claim is called in to an 800 number. (Some insurance companies take reports only from agents. Some insurance companies take reports online. Most have an 800 number to call.) A representative takes the basic information: name of the insured, policy number, time and date of the occurrence, etc.... The claim is then assigned a number and an adjuster. The caller should get this information on the phone.

When the adjuster gets a claim, the adjuster is supposed to handle the investigation in three steps:

1. Coverage. Is the claim covered? In other words, does the insurance policy have some exclusion that makes it so the event is not covered by the insurance policy. This could be an arson on a homeowners policy or a racing incident on an automobile policy. (Racing in your car on a track is not covered by your auto policy.) The adjuster will go through and determine if there is some reason the policy does not apply to the claim. If the claim is covered, the adjuster goes to step 2. If it is not covered, a denial letter is sent to the insured explaining why the claim is not covered.
2. Liability. Is the insured responsible for the damages? On an auto liability policy, the investigation means whether the insured caused the collision. On a homeowners liability claim, ie a slip and fall, the investigation is similar: did the insured do something to cause the incident or fail to do something to prevent it from happening? If the insured is liable, or partially liable, the adjuster goes to step 3. If the insured is not liable, a letter denying liability is sent to the other party.
3. Damages. What amount is owed by the policy? In a comprehensive or collision auto claim, the adjuster determines the repair cost, or if the repair cost is 80% or more of the replacement cost, then the replacement cost. In a liability claim for property damage, the adjuster makes the same analysis. In a bodily injury claim, the adjuster has to determine the extent of the injuries and the amount that would compensate the injured party for the injuries. This is where most arguments occur. What is a fair amount? How is it determined?

The short version: coverage, liability damages. Repeat. That is the proper method to handling an insurance claim. If you have an adjuster who wants to talk damages without knowing if the claim is covered, be afraid, be very afraid!

In future posts, I will go into detail on these issues and explain in more detail what should be done. 

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.

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.

Copies of Insurance Policies

This is a fascinating topic for me. It came up in the course of an interview I gave to a reporter on a topic. (I will leave that for another time, after the article is published.) We discussed how you get a copy of an insurance policy.

I called the California Department of Insurance. I asked for a policy. After all, they keep them all there. The answer: The DOI does not give you copies of policies. Why? Because they don't know which policy, if any, you would get from a specific insurer.

So, I called some local agents. These were agents for some of the major insurance companies. I asked for a specimen policy. I was told that I could not get a specimen (sample) policy.

It is fascinating to me that insurance companies sell a product but they will not let you see the product before you buy it. Imagine buying a car without test driving it. Or buying a house sight unseen. You would never do that, but insurance companies won't let you see what you buy until after you buy it. Amazing! 

Driving Don'ts

While driving around over the last few days, I have seen some really bad driving. And by bad, I mean really, really bad driving that should have people's licenses taken away. So, with that in mind, I am going to give you my "Top 10 Driving Don'ts" from just this last week:

1. Do not eat soup out of a bowl with a spoon while driving. How, exactly, do you hold the bowl, the spoon, and steer at the same time?
2. Along those same lines, do not eat that hot fudge sundae until you get home!
3. Do not turn left from the far right lane. You can always turn right, then make a u-turn and go straight to get to the same point - and it is safer.
4. Do not tailgate the big rig. As his mudflaps say, if you can't see his mirrors, he cannot see you.
5. Do not drive at night with your lights off. How is anyone supposed to see you, Mr. Black Sports Car?
6. The curved freeway on ramp with 1 lane has 1 lane for a reason. Do not pass someone in the shoulder.
7. The police officer who is following the speed limit will pull you over when you pass him going more than 10 mph faster than he is going.
8. This is a special one for the ladies - do not put on your eye makeup while driving. Please?
9. For the guys - do not comb your hair with both hands.
10. Knees were meant for moving your legs, not driving!

If you have any driving don'ts, please share them. I am anxious to hear what you are seeing.

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.

Allstate Barred in Florida

WOW! Okay, I get that businesses make business decisions based on what they think will happen in the future. (Exhibit A: Ford and the Pinto) But, Allstate has taken bad business decisions to a whole new level.

First, it refused to turn over documents in a case despite a court order. (For the record, a court order is just that - an order. It is not a request, a suggestion or the court asking. It is an order.)

Now, the Florida Department of Insurance has barred Allstate for doing business in Florida because Allstate, wait for it.............................failed to turn over documents. Even the Florida Governor is telling Allstate customers to go find new insurance.

Of course, Allstate was surprised at this decision. (Are they ever not surprised? They constantly seem to be surprised.)

So, a quick recap, Allstate refuses to comply with a subpoena, is barred from doing business and is surprised at this result? Here is a tip for everyone. If you don't comply with a subpoena or a court order, you can lose your business license, be suspended or worse. Allstate, as much as this is going to come as a surprise to them, is no different than the Mom-and-pop dry cleaner or any other business.

I agree with Gov. Crist: Allstate policyholders should move their insurance. You are, clearly, not in good hands!   

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!

Adjusters and their new (old) tactic

Amazing new tactic from the insurance industry. Okay, it is not new, but it was dead for a while. So, amazing revival tactic from the insurance industry: talking you out of an attorney. Here is how it works.

You are in a collision. The insurance company calls you and you say "I am going to hire an attorney." In some cases, you have retained an attorney and the adjuster tells you he/she is not aware of that fact. What happens?

The insurance adjuster will explain to you why you don't need an attorney. The adjuster tells you that the claim settles faster without an attorney, sometimes in weeks, not months. The adjuster then tells you how the attorney is just taking money out of your pocket because the settlement does not increase with an attorney. And the adjuster starts to tell you how evil plaintiff's attorneys are.

Well, the adjuster is wrong, wrong and wrong.

Cases do not settle faster without an attorney. In fact, some insurance companies are known to delay a claim until the statute of limitations expires, or is about to expire, before even making an offer. Once the statute of limitations expires, your claim expires too! Furthermore, a claim cannot resolve until you are recovered. The adjuster's desire to pay you before you recover from your injuries should be a sign that the adjuster is out to screw you.

Settlements do increase with an attorney. You do not know what your case is worth. The adjuster, in theory, does. The adjuster will never offer you full value and will have one hundred excuses why your case is not worth what you think it is or why the adjuster is right. It takes experience to figure out what a case is worth.

Trial lawyers are not evil. In fact, we level the playing field. We make sure someone is looking out for your best interest. It sure is not the insurance company doing that.

Be careful when you see this tactic. It should warn you that the adjuster is being less than honest and is trying to hide something. At the very least, you should get a free consultation before you talk to the adjuster.