So on Tuesday, I railed about Blue Cross sending customers a bill so that they can get a bill. Sheesh. Well, it turns out Blue Cross probably was not rescinding policies correctly. Amazingly, they even rescinded at least one policy for an undisclosed prior condition that was disclosed on the application.
One might think it is amazing that this happens, but, alas, it is not. Interestingly, most insurance companies do not look at the policy or the application until a claim is filed. At that point, the application is pulled and the insurance company goes through the application to see if there is grounds to rescind the policy. Seems a bit backwards to me.
You can read more about this and some additional commentary at Injuryboard.
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Blue Cross At It Again
So on Tuesday, I railed about Blue Cross sending customers a bill so that they can get a bill. Sheesh. Well, it turns out Blue Cross probably was not rescinding policies correctly. Amazingly, they even rescinded at least one policy for an undisclosed prior condition that was disclosed on the application.
One might think it is amazing that this happens, but, alas, it is not. Interestingly, most insurance companies do not look at the policy or the application until a claim is filed. At that point, the application is pulled and the insurance company goes through the application to see if there is grounds to rescind the policy. Seems a bit backwards to me.
You can read more about this and some additional commentary at Injuryboard.
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One might think it is amazing that this happens, but, alas, it is not. Interestingly, most insurance companies do not look at the policy or the application until a claim is filed. At that point, the application is pulled and the insurance company goes through the application to see if there is grounds to rescind the policy. Seems a bit backwards to me.
You can read more about this and some additional commentary at Injuryboard.
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DOI Busts Contractors in Tahoe
The California Dept. of Insurance announced a bust of contractors in the South Lake Tahoe area after the Angora fire. People are still trying to figure out what to do, but the unlicensed contractors are flocking to the area. Here is the Press Release in its entirety:
SACRAMENTO - Today Insurance Commissioner Steve Poizner announced the results of the first undercover "sting" operation stemming from the Angora Fire in South Lake Tahoe. The operation took place at a residence in the disaster area that was damaged by fire, but not destroyed.
On July 4, the California Department of Insurance's Enforcement Branch partnered with investigators from the El Dorado County District Attorney's Office and the California Contractors State License Board to identify unlicensed public adjusters as well as unlicensed and uninsured contractors. The operation resulted in five arrests. The El Dorado County District Attorney's Office is prosecuting the cases.
"Preying on fire survivors is unconscionable," said Commissioner Poizner. "My department will continue to do everything possible to ensure residents aren't burned twice by contractors unwilling to protect their employees and customers from unnecessary liability."
None of those arrested possessed either a city/county business license (a misdemeanor) or a contractor's license (a misdemeanor enhanced to a felony since it occurred in a disaster area). Furthermore, two arrestees did not have workers' compensation insurance, a misdemeanor. Suspects arrested were:
• Steve Killion, 47, Marysville, CA, co-owner of Rossier Home Restoration
• Kurt Edward Kimm, 40, Placerville, CA, owner of Kurt Kim Trucking and Equipment
Troy Meadows, 37, Gardnerville, NV, co-owner of B&T Services
• Chase Rossier, 27, Yuba City, CA, co-owner of Rossier Home Restoration
• William Tanner, 33, Gardnerville, NV, co-owner of B&T Services
In recent days, investigators have also been providing residents of the disaster area with tips on spotting and reporting unlicensed and/or uninsured contractors and public adjusters. Furthermore, the investigators have been sweeping the disaster area to verify the license and insurance status of persons identifying themselves as public adjusters or contractors.
My moral for you: do not do business with anyone, sign any contracts, or enter in to any agreements with a contractor or independent adjuster until you have checked them out with the Department of Insurance or Contractors State License Board.
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SACRAMENTO - Today Insurance Commissioner Steve Poizner announced the results of the first undercover "sting" operation stemming from the Angora Fire in South Lake Tahoe. The operation took place at a residence in the disaster area that was damaged by fire, but not destroyed.
On July 4, the California Department of Insurance's Enforcement Branch partnered with investigators from the El Dorado County District Attorney's Office and the California Contractors State License Board to identify unlicensed public adjusters as well as unlicensed and uninsured contractors. The operation resulted in five arrests. The El Dorado County District Attorney's Office is prosecuting the cases.
"Preying on fire survivors is unconscionable," said Commissioner Poizner. "My department will continue to do everything possible to ensure residents aren't burned twice by contractors unwilling to protect their employees and customers from unnecessary liability."
None of those arrested possessed either a city/county business license (a misdemeanor) or a contractor's license (a misdemeanor enhanced to a felony since it occurred in a disaster area). Furthermore, two arrestees did not have workers' compensation insurance, a misdemeanor. Suspects arrested were:
• Steve Killion, 47, Marysville, CA, co-owner of Rossier Home Restoration
• Kurt Edward Kimm, 40, Placerville, CA, owner of Kurt Kim Trucking and Equipment
Troy Meadows, 37, Gardnerville, NV, co-owner of B&T Services
• Chase Rossier, 27, Yuba City, CA, co-owner of Rossier Home Restoration
• William Tanner, 33, Gardnerville, NV, co-owner of B&T Services
In recent days, investigators have also been providing residents of the disaster area with tips on spotting and reporting unlicensed and/or uninsured contractors and public adjusters. Furthermore, the investigators have been sweeping the disaster area to verify the license and insurance status of persons identifying themselves as public adjusters or contractors.
My moral for you: do not do business with anyone, sign any contracts, or enter in to any agreements with a contractor or independent adjuster until you have checked them out with the Department of Insurance or Contractors State License Board.
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Higher Auto Insurance Rates?
Based on a recent California Supreme Court refusal to hear a case, higher rates may be coming. The Auto Club charges fees to insureds for paying in installments. There is a debate over whether these fees are premium or added fees
The moral of the story: when you are going to pay your insurance in payments, ask about any fees. Not all carriers charge these fees.
The moral of the story: when you are going to pay your insurance in payments, ask about any fees. Not all carriers charge these fees.
Low Cost Auto Insurance Program To Expand
From the Department of Insurance, some good news.
Insurance Commissioner Steve Poizner to Expand Low Cost Automobile Insurance Program to Nine Additional Counties
Commissioner Poizner announced his final determination of need for the program in: Solano, Marin, Santa Cruz, Madera, Napa, Yolo, Mendocino, Kings and Lake Counties
SACRAMENTO - Insurance Commissioner Steve Poizner today announced his final determination of need for the California Low Cost Automobile Insurance program in Solano, Marin, Santa Cruz, Madera, Napa, Yolo, Mendocino, Kings and Lake Counties. The program is expected to go into effect in early September, once rates are set in each of the newly added counties.
Commissioner Poizner's announcement follows a series of community town hall meetings in each of the nine counties to examine the need for the program. Based on those meetings and a determination of need analysis conducted by the California Department of Insurance (CDI), the Commissioner determined that the program should be expanded to include these nine additional counties.
"Driving without insurance is illegal, and nearly 100,000 motorists in these nine counties are uninsured," said Commissioner Poizner. "Many drivers simply cannot afford insurance, but uninsured drivers put all travelers at risk. The expansion of this program in nine additional counties will better enable Californians to comply with the law and protect all motorists from potential losses."
Motorists driving without insurance can have their vehicle registrations suspended as part of SB 1500, a new law designed to reduce the risk of economic losses sustained as the result of collisions involving uninsured motorists
The low cost auto insurance program provides eligible low-income good drivers with auto liability coverage for under $400 a year and as little as under $300 a year in many counties.
The California Low Cost Automobile Insurance Program initially begun in 1999 as a pilot program in Los Angeles and San Francisco. A new law, SB 20, also authorized the Commissioner to launch the program throughout the state upon his determination of need in each county. Beginning in April 2006, the department began expanding the program statewide. The program is now available in Los Angeles, San Francisco, Alameda, Fresno, Orange, Riverside, San Bernardino, San Diego, Contra Costa, Imperial, Kern, Sacramento, San Joaquin, San Mateo, Santa Clara, Stanislaus, Merced, Monterey, Santa Barbara, Sonoma, Tulare, and Ventura Counties. With the inclusion of Solano, Marin, Santa Cruz, Madera, Napa, Yolo, Mendocino, Kings and Lake Counties, the Low Cost Auto Insurance Program will be available in 31 California counties.
Since its inception, over 33,000 policies have been issued. Program policies are issued by California licensed insurers and the program is administered by the California Automobile Assigned Risk Plan. Rates are set in each county so that premiums are sufficient to cover losses and expenses in each county to ensure the program is self-sustaining.
To be eligible for the program, an applicant must be a "good driver" - no more than one at-fault property damage only accident, or one point for a moving violation in the past three years; and no at-fault accident involving bodily injury or death in the past three years; and no felony or misdemeanor conviction for a violation of the Vehicle Code.
Additionally, family income cannot exceed 250 percent of the federal poverty level ($25,525 for a single person, $34,225 for two persons and $51,625 for a family of four). The value of an insured vehicle must not exceed $20,000. For more information about the program, call 1-866-60-AUTO-1 (1-866-602-8861)
Now, my caveat: if you can afford a different policy, get it. This policy does not provide a lot of protection for you, but it is better than not having insurance at all!
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Insurance Commissioner Steve Poizner to Expand Low Cost Automobile Insurance Program to Nine Additional Counties
Commissioner Poizner announced his final determination of need for the program in: Solano, Marin, Santa Cruz, Madera, Napa, Yolo, Mendocino, Kings and Lake Counties
SACRAMENTO - Insurance Commissioner Steve Poizner today announced his final determination of need for the California Low Cost Automobile Insurance program in Solano, Marin, Santa Cruz, Madera, Napa, Yolo, Mendocino, Kings and Lake Counties. The program is expected to go into effect in early September, once rates are set in each of the newly added counties.
Commissioner Poizner's announcement follows a series of community town hall meetings in each of the nine counties to examine the need for the program. Based on those meetings and a determination of need analysis conducted by the California Department of Insurance (CDI), the Commissioner determined that the program should be expanded to include these nine additional counties.
"Driving without insurance is illegal, and nearly 100,000 motorists in these nine counties are uninsured," said Commissioner Poizner. "Many drivers simply cannot afford insurance, but uninsured drivers put all travelers at risk. The expansion of this program in nine additional counties will better enable Californians to comply with the law and protect all motorists from potential losses."
Motorists driving without insurance can have their vehicle registrations suspended as part of SB 1500, a new law designed to reduce the risk of economic losses sustained as the result of collisions involving uninsured motorists
The low cost auto insurance program provides eligible low-income good drivers with auto liability coverage for under $400 a year and as little as under $300 a year in many counties.
The California Low Cost Automobile Insurance Program initially begun in 1999 as a pilot program in Los Angeles and San Francisco. A new law, SB 20, also authorized the Commissioner to launch the program throughout the state upon his determination of need in each county. Beginning in April 2006, the department began expanding the program statewide. The program is now available in Los Angeles, San Francisco, Alameda, Fresno, Orange, Riverside, San Bernardino, San Diego, Contra Costa, Imperial, Kern, Sacramento, San Joaquin, San Mateo, Santa Clara, Stanislaus, Merced, Monterey, Santa Barbara, Sonoma, Tulare, and Ventura Counties. With the inclusion of Solano, Marin, Santa Cruz, Madera, Napa, Yolo, Mendocino, Kings and Lake Counties, the Low Cost Auto Insurance Program will be available in 31 California counties.
Since its inception, over 33,000 policies have been issued. Program policies are issued by California licensed insurers and the program is administered by the California Automobile Assigned Risk Plan. Rates are set in each county so that premiums are sufficient to cover losses and expenses in each county to ensure the program is self-sustaining.
To be eligible for the program, an applicant must be a "good driver" - no more than one at-fault property damage only accident, or one point for a moving violation in the past three years; and no at-fault accident involving bodily injury or death in the past three years; and no felony or misdemeanor conviction for a violation of the Vehicle Code.
Additionally, family income cannot exceed 250 percent of the federal poverty level ($25,525 for a single person, $34,225 for two persons and $51,625 for a family of four). The value of an insured vehicle must not exceed $20,000. For more information about the program, call 1-866-60-AUTO-1 (1-866-602-8861)
Now, my caveat: if you can afford a different policy, get it. This policy does not provide a lot of protection for you, but it is better than not having insurance at all!
Go to main >>
What is a third party claim?
There seems to be confusion about what constitutes a third party claim. For example, if your vehicle is struck by someone else and you have damage to your car, a rental expense, an injury, wage loss, and medical bills, which of those is a claim?
The answer is to break it down by type of damage. Okay, so how do you do that? Fortunately, you do not have to do that. The other person's insurance company will do it for you, if the other person was at fault. But, let me explain what they consider a claim. (It is different with your own insurance, but we will discuss that another time.)
Property damage: this includes damage to your car and any rental expense incurred
Bodily injury: this includes the wage loss, medical expenses and "pain and suffering." These are not three separate claims, but rather one claim. Each person has their own claim. So, if you and Junior are involved in a collision, you have a bodily injury claim and your child has a separate bodily injury claim.
I hope this helps answer this question
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The answer is to break it down by type of damage. Okay, so how do you do that? Fortunately, you do not have to do that. The other person's insurance company will do it for you, if the other person was at fault. But, let me explain what they consider a claim. (It is different with your own insurance, but we will discuss that another time.)
Property damage: this includes damage to your car and any rental expense incurred
Bodily injury: this includes the wage loss, medical expenses and "pain and suffering." These are not three separate claims, but rather one claim. Each person has their own claim. So, if you and Junior are involved in a collision, you have a bodily injury claim and your child has a separate bodily injury claim.
I hope this helps answer this question
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Your Social Security Number
Have you ever wondered why the insurance company wants your social security number? It is not because they need to verify your ability to work in this country!
They need it, well, they want it because they want to track you. Think George Orwell's "1984." The insurance companies have databases with information on everyone who files a claim. The problem, however, is that there are a lot of people named "Jonathan Stein." Heck, there are a lot of attorneys named Jonathan Stein and a lot in California, even!
So, how do they know if it is me, the guy in the next city or the guy in San Diego? Easy. They use your social security number to track it. This is why it is imperative that you do NOT give them your social security number. They don't need it. They just want to be able to track you.
They need it, well, they want it because they want to track you. Think George Orwell's "1984." The insurance companies have databases with information on everyone who files a claim. The problem, however, is that there are a lot of people named "Jonathan Stein." Heck, there are a lot of attorneys named Jonathan Stein and a lot in California, even!
So, how do they know if it is me, the guy in the next city or the guy in San Diego? Easy. They use your social security number to track it. This is why it is imperative that you do NOT give them your social security number. They don't need it. They just want to be able to track you.
Reimbursement of your health insurer
Thankfully, we do not live in Texas. The Texas Supreme Court recently ruled that when a plaintiff sues a defendant, the plaintiff's health insurer gets reimbursed before the plaintiff. So, you pay those health insurance premiums in Texas, you use your benefits after a car crash, you sue for medical bills and "pain and suffering" and most of the money is going back to your health insurer, who you already paid for the coverage in the first place.
Thankfully, in California, the courts enforce the "make whole" doctrine. This basically says you have to be made whole before you have to pay back your health insurer. There is still some dispute about it, but you are much better off in California right now than you are in Texas. The Supreme Court there is doing a number on plaintiffs.
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Thankfully, in California, the courts enforce the "make whole" doctrine. This basically says you have to be made whole before you have to pay back your health insurer. There is still some dispute about it, but you are much better off in California right now than you are in Texas. The Supreme Court there is doing a number on plaintiffs.
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Archive for July 2007
Insurance Blog
Insurance Blog Information on Tatal Insurance and Insurance News
Should Lawyers Buy Malpractice Insurance?
(July 3rd , 2007 by palado)
As insurance agents we are all required carry insurance agents E&O (professional liability insurance) by industry practice. Should those attorneys who choose not to carry attorneys’ malpractice (E&O or professional liability) insurance have to disclose this to their clients?
This question is the subject of intense debate right now in California. The State Bar of California has proposed a rule that would require attorneys to disclose to their ..[]
Read more >>
Federal Surplus Lines Bill
(July 6rd , 2007 by palado)
The new surplus lines bill, which was just passed in the US House, provides for simplified and consistent surplus lines placements for insurance agents around the country (see here & here). A companion Senate bill has been introduced and is awaiting action. A similar house version was passed last year 417-0.The bill works by defining national ..[]
Read more >>
Hurricane Regulation
(July 6rd , 2007 by palado)
The success or failure of the regulatory approaches utilized in Florida and Louisiana to ease the insurance crisis is critically important to the insurance industry, particularly insurance agents who bear the brunt of communicating the resulting market conditions to clients. We have followed the ..[]
Read more >>
Duty to Notify Insurer of Changes
(July 6rd , 2007 by palado)
Insurance agents may wonder whether an insured has a duty to notify an insurer of material changes in exposure other than through the normal application process. According to a recent appeals court decision (see here & here) an insured does not.The case involved a commercial
...[]
Read more >>
Insurance Blog Information on Tatal Insurance and Insurance News
Should Lawyers Buy Malpractice Insurance?
(July 3rd , 2007 by palado)
As insurance agents we are all required carry insurance agents E&O (professional liability insurance) by industry practice. Should those attorneys who choose not to carry attorneys’ malpractice (E&O or professional liability) insurance have to disclose this to their clients?
This question is the subject of intense debate right now in California. The State Bar of California has proposed a rule that would require attorneys to disclose to their ..[]
Read more >>
Federal Surplus Lines Bill
(July 6rd , 2007 by palado)
The new surplus lines bill, which was just passed in the US House, provides for simplified and consistent surplus lines placements for insurance agents around the country (see here & here). A companion Senate bill has been introduced and is awaiting action. A similar house version was passed last year 417-0.The bill works by defining national ..[]
Read more >>
Hurricane Regulation
(July 6rd , 2007 by palado)
The success or failure of the regulatory approaches utilized in Florida and Louisiana to ease the insurance crisis is critically important to the insurance industry, particularly insurance agents who bear the brunt of communicating the resulting market conditions to clients. We have followed the ..[]
Read more >>
Duty to Notify Insurer of Changes
(July 6rd , 2007 by palado)
Insurance agents may wonder whether an insured has a duty to notify an insurer of material changes in exposure other than through the normal application process. According to a recent appeals court decision (see here & here) an insured does not.The case involved a commercial
...[]
Read more >>
Federal Surplus Lines Bill
The new surplus lines bill, which was just passed in the US House, provides for simplified and consistent surplus lines placements for insurance agents around the country (see here & here). A companion Senate bill has been introduced and is awaiting action.
A similar house version was passed last year 417-0.
The bill works by defining national standards for how the surplus lines market is regulated by the states, and includes a uniform method for allocating and remitting surplus lines tax.
The bill works by defining national standards for how the surplus lines market is regulated by the states, and includes a uniform method for allocating and remitting surplus lines tax.
The one-state compliance for multi-state risks provision is an important aspect of the bill.
While many states have streamlined the surplus lines process, some have not. And inconsistencies between states’ surplus lines requirements can make it difficult for surplus lines brokers and insurance agents to effectively comply with state requirements.
While many states have streamlined the surplus lines process, some have not. And inconsistencies between states’ surplus lines requirements can make it difficult for surplus lines brokers and insurance agents to effectively comply with state requirements.
This bill will be a welcome relief to most insurance practitioners.
Hurricane Regulation
The success or failure of the regulatory approaches utilized in Florida and Louisiana to ease the insurance crisis is critically important to the insurance industry, particularly insurance agents who bear the brunt of communicating the resulting market conditions to clients.
We have followed the varying situations in each of these key states with interest, and have noted that each state has taken quite a different path.
Last week we noted the shift of hurricane exposure to quasi-governmental entities (see here), and in February of this year noted that Louisiana had taken a different approach by encouraging the private market to provide the solution (see here).
An article today in the Shreveport Times (see here) provides a summary and update on the differences. Florida has taken an aggressive regulatory approach, resulting in the State assuming a substantial part of the catastrophic hurricane exposure.
Louisiana has attempted to support the private market and decrease the government’s role.
It is too early to determine which approach is the better one.
It is too early to determine which approach is the better one.
And the better one is not necessarily the approach that reduces short term insurance costs. Florida’s approach appears to have produced some price reductions already, or at least reduced increases, but the State has assumed enormous risk in the process and has shifted some of the burden to insureds with little or no hurricane exposure.
It is not clear whether Louisiana’s approach is having much impact yet, but the appearance of a positive approach is not driving away masses of insurers.
Duty to Notify Insurer of Changes
Insurance agents may wonder whether an insured has a duty to notify an insurer of material changes in exposure other than through the normal application process.
According to a recent appeals court decision (see here & here) an insured does not.
The case involved a commercial auto policy which was renewed for 9 years with no renewal application requested or provided.
The case involved a commercial auto policy which was renewed for 9 years with no renewal application requested or provided.
During this time the insured owner stopped conducting his business through the company and conducted the business personally.
He never notified the insurer, and said the agent never passed along any requests for information from the insurer.
An insured was involved in an accident in 2003, and the insurer sought to void coverage due to the failure to provide material information.
In this particular situation the court, on appeal, concluded that the insured does not have a duty to notify an insurer if not asked.
In this particular situation the court, on appeal, concluded that the insured does not have a duty to notify an insurer if not asked.
[U]nless a provision in the insurance policy or a renewal application requires the insured to notify the insurer of particular changes, the insured is under no duty to identify changes that are material and notify the insurer of such changes
This may explain the numerous questions and representations required on a professional liability application. And might the insurer try to hang this on the agent?
Should Lawyers Buy Malpractice Insurance?
As insurance agents we are all required carry insurance agents E&O (professional liability insurance) by industry practice.
Should those attorneys who choose not to carry attorneys’ malpractice (E&O or professional liability) insurance have to disclose this to their clients?
This question is the subject of intense debate right now in California. The State Bar of California has proposed a rule that would require attorneys to disclose to their clients when they do not have malpractice or professional liability insurance (see here).
Supporters claim that such disclosure would provide an incentive for all attorneys to maintain such insurance, and would protect clients. Critics, small law firms and sole practitioners, complain that the cost is prohibitive (see here & here).
Oregon is the only state requiring lawyers to maintain coverage, and a number of other states require disclosure when coverage is not purchased. The State Bar notes that 1 in 5 firms are not covered by professional liability coverage.
Go to main >>>
Should those attorneys who choose not to carry attorneys’ malpractice (E&O or professional liability) insurance have to disclose this to their clients?
This question is the subject of intense debate right now in California. The State Bar of California has proposed a rule that would require attorneys to disclose to their clients when they do not have malpractice or professional liability insurance (see here).
Supporters claim that such disclosure would provide an incentive for all attorneys to maintain such insurance, and would protect clients. Critics, small law firms and sole practitioners, complain that the cost is prohibitive (see here & here).
Oregon is the only state requiring lawyers to maintain coverage, and a number of other states require disclosure when coverage is not purchased. The State Bar notes that 1 in 5 firms are not covered by professional liability coverage.
Go to main >>>
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