Missouri Insurance Lawyer Blog

In a case handed down August 6, 2010 by the Missouri Court of Appeals, Southern District, the court found that the proposed lien of a health insurer was an invalid attempt to require assignment of the Participant's personal injury claim and, as such, it was contrary to longstanding Missouri public policy. Scroggins v. Red Lobster, No. SD 30214.

In 2007, Pamela Scroggins was seriously injured in a trip and fall accident at a restaurant. Ms. Scroggins' medical expenses were covered by an employee contributory self-funded health plan that provided benefit coverage to her under her employer provided health care plan. As a result of her injuries, Ms. Scroggins sued the restaurant and the lawsuit resulted in a settlement.

One of the health insurance plan provisions purported to grant the health insurer a lien upon the proceeds of the Participant's tort recovery, and a right to payment from any recovery, to the extent of the sum that the Insurer paid for injuries Ms. Scroggins suffered. This is not unusual. Insurers paying benefits to insureds as a result of injuries caused by third persons often claim an interest in recovering those costs if the insured obtains a settlement or collects upon a judgment against the third party. To that end, insurers have repeatedly attempted to draft policy provisions or establish other requirements for the purposes of seeking reimbursement from the insured in such situations.

Continue reading "HEALTH INSURER CANNOT ASSERT LIEN UPON THE PROCEEDS OF THE PARTICIPANT'S TORT RECOVERY" »

Insurance companies doing business in Missouri will soon face tighter oversight thanks to a new law that takes effect on August 28, 2010. The Missouri Department of Insurance explains that the new law will give the state's insurance regulators the power to step in sooner when an insurance company is in enough financial trouble that it may not be able to pay it's customers' claims. To read more about this new law, visit the Missouri Department of Insurance website press release.

On Tuesday, August 3, 2010, in a far-reaching decision, the Missouri Court of Appeals, Western District, handed down Robinson v. Hooker, Case No. WD71207, which applied the 2005 "strict construction" amendment to the Missouri Workers Compensation Act, and allowed lawsuits against negligent co-workers to proceed in civil court. It determined that co-worker liability is no longer protected under the shield of workers compensation.

Prior to 2005, Missouri statute 287.800 mandated that all provisions of the Workers' Compensation Act be liberally construed. Under this standard, courts broadly interpreted the Act to extend benefits to the largest possible class and resolved any doubts as to the right of compensation in favor of the employee.

Continue reading "Significant Missouri Workers Compensation Case Allows Claims Against Co-Employees to Proceed In Civil Court" »

Life insurance is a critical financial tool for many families in the United States. As a recent Missouri case illustrates, the failure of an insured to give true answers on a life insurance application can result in a loss of the insurance policy when it comes time to collect the life insurance. In the case of Adams v. Stonebridge Life Insurance Company, the 8th Circuit Court of Appeals held that where a man who purchased life insurance policy gave false and misleading answers on application in response to questions regarding whether or not he had a pre-existing mental disorders, the company could rescind the policy. The court noted that the insurance company justifiably relied on the man's application answers and therefore the claim for benefits to the beneficiaries after the applicant's death was proper.

This underscores two important points. First, that the application is very important in the process of obtaining life insurance and will be relied upon by the insurance company in determining whether or not to insure a person, and the amount of premium that will be paid if the application is accepted. Second, while subject to certain statutory limitations, an insurance company generally has the right to rescind the policy when the application answers were falsely made by the applicant. Most states, including Missouri have a non-contestability clause, under which after a certain period of time has passed answers will no longer form the basis for rescission. However, as no one ever knows when they will die, it is important practice to only provide correction information when applying for life insurance, so that the benefit will actually be there when it is needed.

If you're shopping for new insurance coverage, you should investigate the insurance companies you're considering before you decide to buy coverage from them. Missouri has an Insurance Complaint Index that shows you how insurance companies treat their policy holders and handle claims.

Each insurance company is given an index rating. Receiving a 100 is average. If a company receives a number lower than 100, they are below average on receiving complaints. For numbers above 100, they receive more than the average amount of complaints.

The Consumer Affairs Division (CAD) of the Missouri Department of Insurance mediates complaints. In 2009 the CAD returned a record $14 million to consumers who had been unfairly denied claims or overcharged on premiums.

Think about how hard it would be to recreate the contents of your home if you suffered a loss. It would be hard to sit down and think about everything you'd had and make an inventory. Many valuable items might be forgotten. It should be a little easier now. Missouri Department of Insurance Director James M. Huff has created a home inventory checklist to make inventorying your home's contents easier. The checklist is a simple fill in the blank document that you can print out once you're finished. The checklist takes you through one room at a time to insure you don't miss anything. Huff recommends keeping as many receipts of purchases in a fire- proof area. Consumers should update their inventory anytime a new purchase is made.

You can download the checklist at no charge from the Department of Insurance's website or request a hardcopy by mail by calling the Insurance Consumer Hotline at 1 800 726 7390.

The Missouri Department of Insurance recently announced that health insurance companies in Missouri are now required to cover dependant children up through age 26 under a parent's health insurance policy. The requirement takes effect for policy years beginning September 23rd or later. The age 26 requirement does not apply to adult children who have other health insurance available to them, such as through their own employer's policy. Coverage must include all the benefits of younger dependents and at the same price.

Some insurance companies are making this new policy available now including United Health Care, Anthem Blue Cross and Blue Shield, Aetna, Cigna, Blue Cross and Blue Shield of Kansas City, Coventry, and Humana. These companies cover almost 66 percent of licensed health insurance for covered Missourians.

Almost 20,000 more Missouri children will now have health insurance. The new policy will only apply to health insurance plans that offer dependent coverage, though most insurers and employer based plans do offer dependent coverage even though there is no requirement to do so.

You can read more about this new extension of coverage at the Missouri Department of Insurance website.

On July 6, 2010 Missouri Department of Insurance Director James M. Huff announced that $81 million in federal funding will be used on new health coverage for Missourians who have had trouble getting health insurance because of pre-existing conditions.. The idea was proposed by the Missouri Health Insurance Pool (MHIP) and was approved by the federal government. The program will also be funded by premiums that are paid by policy holders and will provide insurance coverage at competitive rates. Eligibility requirements state that you must be a Missouri resident with pre-existing medical conditions, and that you have been uninsured for at least six months. The federal and state high risk pools are available until 2014, then all applicants, regardless of health status, will be offered coverage at market rates because the new federal law will require it.

You can apply online at the MHIP website, or you can call (800)821-2231.

In a 7-0 decision written by Judge Richard B. Teitelman, the Supreme Court of Missouri confirms that an insurance company must promptly investigate a claim and its failure to do so is unreasonable and vexatious. D.R. Sherry Construction, Ltd. V. American Family Mutual Insurance Company, Case No. SC90442.

Sherry, a general contractor engaged in the business of building homes, filed suit against his commercial general liability insurer, American Family Mutual Insurance Company after the insurance company refused to investigate and pay a claim. Sherry made a claim on his insurance policy after a house that he built and sold, incurred structural damages caused by continuous and repeated exposure of the foundation to poor soil conditions.

Subsequent to the sale of the home, the new homeowners contacted Sherry and notified him that the foundation and drywall were cracking. Mr. Sherry inspected the house and confirmed the existence of the cracks. The homeowners threatened a lawsuit against the contractor. Mr. Sherry submitted a claim to his insurer, but American Family advised Sherry that it would not undertake further investigation of the claim until the homeowners actually filed a lawsuit. At that time, Sherry entered into an agreement with the homeowners to repurchase the home.

Sherry then filed this lawsuit against American Family asserting claims of breach of contract and vexatious refusal to pay. American Family claimed that that policy had expired at the time of making the claim, and that they did not owe anything under the policy.

The court found (1) that the damage to the house began during the policy period and was progressive from that point forward, and therefore was covered by the policy at issue; (2) the interpretation of an insurance contract is a question of law to be determined by the judge and only becomes a jury question when the court determines that the contract is ambiguous and there exists a genuine factual issue to be decided by the jury; and (3) American Family's delay and then refusal to investigate the contractor's claim was sufficient basis for concluding that the insurance company unreasonably and vexatiously refused to pay a valid claim for property damage.

Continue reading "MISSOURI SUPREME COURT CONFIRMS THAT AN INSURANCE COMPANY'S REFUSAL TO PROMPTLY INVESTIGATE A CLAIM IS VEXATIOUS" »

The National States Insurance Company of St. Louis has serious financial problems and they have been ordered to go through a state-mandated rehabilitation process.. They will be taken over by Missouri Department of Insurance director James M. Huff. Rehabilitation protects the policyholders by preserving the company's assests. Huff must protect Missouri consumers who have long term care, life and Medicare Supplement insurance coverage with National States.

You can read more about National States on the Missouri Department of Insurance website. Policyholders with questions can also call the Department of Insurance Hotline at (800)726-7390.

Small business owners have to be many things, from salesman to maintenance to human resources and more, to run a successful business. One of the many things small business owner should be well informed on is insurance coverage. The National Association of Insurance Commissioners (NAIC) makes this challenge a little easier by offering a website, Insure U for Small Business, that is full of helpful information designed to make the small business owner's quest for the right insurance coverages a little easier.

The NAIC is the organization of insurance regulators from the fifty states, District of Columbia and U.S. territories.

Umbrella liability insurance is so named because it acts like an umbrella, sitting on top of your auto and homeowners liability policies to provide extra liability protection for you and your family. Most Americans carry liability coverage on their cars and home that would provide insurance coverage that could be used to pay claims in the event that you or a member of your family negligently caused injury to another person. Umbrella coverage is designed to pay only after your other policies are exhausted.

Why do you need umbrella liability insurance? Accidents can happen to all of us. If we cause injury to another person, the law holds us responsible for the injury and damages caused to the other person. For instance, your inattention caused a serious automobile accident in which someone was seriously injured or killed; or you failed to property maintain the brakes on your farm truck and an employee was unable to stop in time to prevent a terrible accident. Often, we do not carry enough automobile insurance or homeowner's coverage to pay for the damages that we may cause.

Unfortunately, home owner's insurance or automobile coverage may not be enough to protect your assets in the event of a serious injury or death. If your negligence results in damages to another person in an amount that exceeds your insurance limits, how and where would you get the money to pay the debt? Your assets, including your home or your investments could be at risk. If you have accumulated even a modest amount of assets or if your travel habits or business pursuits put you at risk, you should consider purchasing umbrella liability coverage as part of your financial planning strategy.

Umbrella liability insurance is relatively affordable, and can be easily coordinated with your existing insurance policies. Usually, there is a substantial discount in the insurance premium if you purchase your umbrella liability coverage, homeowners and automobile policies from the same company.

Continue reading "Why Do I Need Umbrella Insurance Coverage?" »

Unfortunately, not all accidents are just minor fender benders. Should you find yourself in a serious accident, medical payments coverage pays for medical bills (and sometimes funeral bills) incurred by the driver and passengers injured in a motor vehicle accident regardless of who caused the accident. It also pays for you or your family members injured while riding in another's car or if struck by a car as a pedestrian.

Medical payment coverage is offered by most automobile insurance coverage and is usually sold in increments of $1000, $5000 or $10,000 per person.

Even if you have health insurance, there are often deductibles and co-payments that must be paid. If your health plan requires you to pay a deductible, medical payments coverage may help pay it. This coverage can also help pay for items not covered by your health plan, such as dental treatment, professional nursing services, prostheses, and funeral services.

In Missouri, medical payments coverage is not required. However, I recommend this coverage for most of my clients. If you decide this protection is appropriate for you, make sure you specifically request it from your insurance agent or representative. It is not always provided by simply requesting "full coverage" from your agent.

Continue reading "Do I Need Automobile Medical Payments Coverage?" »

Sooner or later, it may become necessary for someone else to drive your vehicle and you want to make sure that there is insurance if they are involved in an automobile accident.

Generally, insurance follows the vehicle, not the driver. If it is your car, then the insurance coverage you have purchased for your vehicle would provide primary coverage. Any insurance policy your friend has purchased would become secondary. Primary simply means that your insurance company should pay the claim first. Then if your liability limits are exhausted, your friend's insurance should pay additional amounts up to his limits.

Please understand that if your friend is involved in an accident with your car, your rates could go up. Also, in some circumstances, if you are aware that your friend is not a safe driver and you allow him or her to drive your car, you could be held personally liable if they cause an accident that seriously injures another person.

Continue reading "Does My Friend Have Insurance Coverage If She Drives My Car?" »

It is a common scenario that insurance companies who have sold you a disability policy attempt to terminate benefits claiming the disability is no longer present, or severe enough to prevent employment. This most commonly occurs between two to four years after receiving the benefits depending on the type of language in your contract. Most disability insurance policies include a time period ranging from two to four years after which the definition of total disability changes. The definition typically narrows which is generally bad for the policy holder. This change may take the form of either increasing the number of occupations which should be considered before determining if you are disabled, or narrowing the requirements to meet ongoing disability.

Furthermore, disability policies include the right of the insurance company to obtain your medical records, and to periodically have you examined for the purposes of determining if you are still disabled.

Continue reading "Disability Insurance Denials When Your Company Says You're No Longer Disabled" »