California Personal Injury and Insurance Blog

Multiple Policies on 1 Car

This has come up a few times lately in my personal injury cases so I thought I would discuss it with you. Here is the scenario: Bob is driving his Aunt Sally's car. Bob is 25 and has an insurance policy. Sally is 43 and has an insurance policy as well. If Bob rear ends Paul, which policy pays for Paul's personal injury damages?

This is an interesting question and one which doesn't have an easy answer. (And one which most attorneys do not know the answer to!) The first answer is to read the policy. Most policies will have a provision explaining what happens when there is more than 1 policy in effect. The options are simple:

1. A policy may say that it is primary. This policy will pay first up to the policy limit.
2. A policy may say that it is excess. This policy will pay only after the other policy pays.
3. A policy may say that it shares on a pro-rata basis. This means that each policy pays based on its share of the limits. A few examples:

A. If each policy has a $100,000 policy limit, than each policy pays 50% of the claim.
B. If Bob's policy is $50,000 and Sally's policy is $100,000, then Bob's policy pays 1/3 of the claim and Sally's policy pays 2/3 of the claim.
C. If Bob's policy is $300,000 and Sally's policy is $100,000, then Bob's policy pays 75% and Sally's policy pays 25%.

When you are driving a friend's car, or a friend is driving your car, is pays to see which policy is going to pay for the damages if someone is involved in an accident.

What is used to determine your medical bills?

This is an important question. Why? Because your medical bills are part of the settlement of your case. When you are injured, you are entitled to recover your medical bills, both past and future, as well as your pain and suffering.

This should be relatively straightforward, right? After all, add up your medical bills and you have your number. At least, that is what most of us would do. But, in law, there is more to it.

Plaintiff's attorneys, people who represent the injured party, take the side that most of you take: it is the amount of the medical bills. Insurance companies believe that your medical bills are actually only the amount paid by your health insurance, Medi-cal or Medi-Care. In other words, the insurance companies want to pay as little as possible. Is anyone really surprised? Probably not!

If you are injured, you need to demand payment in full for your medical bills. Do not let them reduce the bills down to the amount paid. There is no authority in the law for them to do this, especially if you have private insurance. If they refuse, you should talk to an attorney.

What makes a trial lawyer?

This is always a fascinating argument. Here is the debate out of Memphis, TN from my friend James Ferrell.

This is simple from my perspective. First, if you want to call yourself a trial attorney, you need to try cases. That is what people think of when they think of trial attorneys. They think of an attorney who is in court.

Second, if you are looking to hire an attorney, you want a trial attorney. Why? Because that person will get more respect from the insurance companies. They know that an attorney who tries these cases will cost them more money. And they know they can, and often do, lose. Additionally, the insurance company knows that they do not have to make a fair offer to an attorney who does not try cases because there is no downside to them. They know he will settle the case at some point.

A trial attorney: someone who actually tries cases. And that is who you want on your side if you have been involved in a car accident.       

Police reports are not evidence

This is a topic that comes up often. In fact, I hear it not just from clients, but also from many insurance adjusters. They tell me that the police report is admissible evidence that my client did something wrong.

The simple fact is that the police report itself is not evidence. A jury will never see the police report. The jury can hear about the investigation. The jury can hear what the police officer saw or heard. But the jury will never see the report or hear the officer's conclusions.

Why? First, the police report is hearsay. It is an out of court statement. It is not admissible for that reason. But, beyond that, the California Evidence Code specifically excludes the police report. Therefore, the report never makes it to the jury and the jury never hears what the officer determined.

The question of fault is a question for the jury to decide. So, while important, the police report is not the final determination of who caused an accident.

Loss of Consortium

Sometimes people ask me about filing a loss of consortium claim. Well, that is not how they put it, but that is what it is called. They ask about a claim for the spouse of the injured person. And they want to know if they can make a claim and what is involved.

We can start easy. Can you make a claim? Yes, but only if you are married. If you are dating, engaged or "seeing each other," then you do not have a loss of consortium claim in California. California limits loss of consortium claims to a married couple.

Now, what is involved? That is more complex. In California, loss of consortium is the loss of spousal services. So, if your spouse cooks, cleans and does the laundry, you can recover for that. If your spouse cuts the grass, trims the bushes and fixes the car, you can recover for that. In general, you can recover for the loss of whatever your spouse normally did but cannot do as a result of the collision.

Talk to your attorney about a loss of consortium claim. These are tricky claims and require an experienced attorney to review and value.

Are you told to have spinal decompression? Be cautious

I have had a few clients lately who have been told that they need spinal decompression on a very expensive machine. The machine du jour is the DRX 9000. I am sure you have seen ads in your local newspaper about it. Here is a story from the San Jose Mercury News that should make you cautious about this procedure. (It is not often I post an entire article, but I cannot find a good link and this story has great information.)

Dale John Dorjath was willing to try just about anything to ease the debilitating back pain he had
suffered for years - even a machine recommended by his chiropractor that required strapping on Velcro girdles and being pulled in two directions.

"It sounded like it was well worth the money," Dorjath said. "But it didn't work. I had so much pain
afterwards, I literally couldn't walk."

Dorjath, a retired 64-year-old accountant from San Jose, said he was treated on a DRX 9000, one of the "spinal decompression" machines touted by some chiropractors as an alternative to surgery for
patients with herniated discs or other lower back problems.

While some patients report near-miraculous relief from the machines, the companies that make them and the chiropractors who buy them are coming under increasing scrutiny from local district attorneys and federal officials for fraudulent advertising and unproven claims of effectiveness.

Insurers won't cover the expensive treatment, also known as motorized traction, and mainstream medical experts say it isn't effective.

Last month, FBI agents raided Axiom Worldwide, the Tampa, Fla., maker of the DRX 9000. Also in March, a federal judge in Atlanta ordered Axiom to stop making false marketing claims.

In California, a number of district attorneys, including those in Santa Clara, Santa Cruz and
Monterey counties, are jointly investigating chiropractors' marketing of spinal decompression
machines including the DRX 9000. They expect to complete the investigation this summer. Penalties for local chiropractors could be harsh: Two Monterey County chiropractors were fined $25,000 each last year for deceptive advertising of the machines, although their fines were later reduced.

Company officials did not return repeated phone calls from the Mercury News. A Santa Cruz attorney for Axiom Worldwide, Paul Meltzer, said the issues were "under investigation" and declined to comment further. 

At least three South Bay chiropractors regularly advertise treatments on the machines in the Mercury News.

Intense competition

The spinal decompression industry is intensely competitive, with major players suing each other and their contractors over marketing claims and breaches of contract. The various machines look different but all purport to work by stretching the spine to increase the space between the spinal discs that act as shock absorbers between vertebrae.

At least 1,000 machines are in use in the United States under brand names such as DRX 9000, VAX-D, Accu-Spina and DRS, according to a trade publication called the Anesthesia & Pain Coders Pink Sheet, which has closely followed the industry. New machines can cost more than $140,000 while used machines - and $595 advertising kits - are easily found on eBay. Chiropractors have aggressively marketed treatment with the machines through newspaper ads and infomercials.

Some claims have gotten manufacturers and chiropractors in trouble. Ruling on a lawsuit filed by a competitor, the federal judge in Atlanta told Axiom to cease claims that the machine is based on NASA space research (it isn't) and that it's approved by the U.S. Food and Drug Administration (the machine was never evaluated for effectiveness, but grandfathered in because it's similar to existing medical devices).

Around the country, chiropractors also have been held accountable for making false claims and fraudulently billing Medicare and other insurers for the treatment. Last year, two Georgia chiropractors received near-three-year prison terms for fraudulently billing Blue Cross and Blue Shield of Georgia nearly $2 million for spinal decompression treatments on a VAX-D machine. Most insurers, including Medicare, do not cover the treatment. The chiropractors were accused of
falsifying the treatment provided to ensure payment.

Five months after his first spinal decompression treatment, Dorjath said, he still experiences random pain and tingling from his toes to his thighs. His rehabilitation physician believes the machine irritated the nerves around his spine and caused a disc to protrude from his spine, Dorjath said.

When Dorjath was considering the treatment in November, the $6,000 cost for 20 sessions on the
machine seemed expensive, but he was desperate. His already bad back worsened after an encounter with a flying golf ball. Dorjath had received steroid injections from his family doctor, but they weren't working anymore. And his toes were starting to tingle uncomfortably.

Dorjath liked his chiropractor's bedside manner and the fact that he really seemed to care about his pain. Brad Pluckhan, who has offices in Campbell and Gilroy, told Dorjath that the worst that could happen was that he wouldn't get better, Dorjath said.

When he felt pain after two weeks of sessions on the machine, he stopped treatment and Pluckhan refunded his money, Dorjath said.

But for weeks afterward, Dorjath said, he found it difficult to walk, play golf, get out of a chair and
turn over in bed. The two are now in arbitration over whether Pluckhan should make other reparations.

`Great addition'

Pluckhan told the Mercury News that the machines have been a "great addition" to his practice. The
chiropractor declined to comment on Dorjath's experience, citing patient confidentiality. But he
said that clients who have experienced problems with the treatment have not followed strict recommendations such as avoiding exercise, bending, twisting or pushing during the first two weeks of treatment.

That said, Pluckhan acknowledged, "We absolutely agree that this is not a one-hit wonder. It's not going to work on every patient."

Other patients of Pluckhan's, however, sing the machine's praises.

"After the third treatment, I could see a big difference," said Debbie Cino, 54, of San Jose. Cino
said an extra vertebra in her back made it difficult for her to sit or stand for long periods, and the
treatment helped. "I think it's wonderful," she said.

Doctors say that patients like Cino may have been helped by the machine, but it's also possible that the treatment provides a powerful placebo effect that relieves pain, they say. Some patients' back pain also resolves on its own, but patients may credit their spinal decompression instead, doctors say.

Ideally, medical studies would help answer those questions, but solid research on spinal decompression machines is skimpy at best.

Axiom's marketing materials have claimed that scientific studies proved the machines work to relieve back pain by up to 86 percent. But any studies showing a positive effect were either sponsored by other machines' manufacturers or were poorly designed. There is no published research on the DRX 9000.

Even a literature review co-written by Dr. Alex Macario, a Stanford University anesthesiologist and
researcher, and funded by Axiom Worldwide, concluded that the effectiveness of these types of machines for chronic low-back pain is "unproven."

Dr. Harley Goldberg, a Kaiser Permanente physician who oversees the health-maintenance organization's spine care services in Northern California, goes further and condemns the machines. Spinal decompression machines merely offer a new, mechanized twist on old-fashioned
traction for back pain - which rigorous medical studies have shown doesn't work, he said.

"My skin crawls when I see the ads, because they take advantage of people in pain," he said. "If spinal
decompression actually worked, we would all use it."

5 Totally Unsafe Car Moves

Parents magazine has a list in its July, 2008 edition with "5 Totally Unsafe Car Moves." Their top 5:

1. Climbing into the backseat, while the car is moving;
2. Picking up your baby while the car is moving;
3. Traveling with pets loose in the car;
4. Packing the car to the gills; (My car doesn't have gills, does yours?)
5. Forgetting to double-check the car seat.

I have to tell you, other than #3 and maybe #4, none of these ever come up. After three kids, I can not count any times when anyone climbed into the backseat to be with the kids. The idea never even cross our minds. Nor did #2 or #5. I have traveled with an old dog to the vet with him sitting next to me. And once in a while, we put a lot of luggage in the car for a road trip. (Although, with gas prices being so high, the road trips are done for a while.)

Here are my 5 totally unsafe car moves:

1. Putting on makeup while driving;
2. Shaving while driving;
3. Text messaging while driving;
4. Changing your clothes while driving;
5. Passing things between cars while driving.

Share your totally unsafe car moves with me. 

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. 

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.