Missouri Insurance Lawyer Blog

Missouri has adopted a law that allows employees of small Missouri businesses to continue coverage after their employment has ended under terms identical to COBRA. The notice issued by the Missouri Department of Insurance can be read here<.

Every contract has an implied covenant or promise of good faith and fair dealing. Insurance policies are merely contracts between the insurance company and the person who purchased the insurance and people who qualify for insurance benefits under the terms of the contract. Thus, every insurance policy in the United States has a promise imposed by law upon an insurance company to act fairly towards its policy holder and the beneficiaries in the performance of the contract. This is true whether or not such a clause is specifically include in the policy, because courts will read such covenant into the policy as a matter of contract law.
Insurance carriers must therefore meet the objective reasonable expectations of the policy holders and insurers must give equal consideration to the financial interest of its insurer as it does its own interest. Thus, when an insurance company does not have to put its interests behind that of its insured, it cannot protect itself while abandoning its policy holder.

In cases, commonly referred to as bad faith cases, the essential question is whether or not the insurance carrier met its duty of good faith and fair dealing in the situation presented by the performance of its contract obligations. Examples of bad faith include delaying payments, paying less than what is owned, denying benefits or coverage, or failing to settle claims within the policy limits. The insurance companies also have obligations imposed upon them including the duty to promptly investigate all claims, and where appropriate to defend their insured under the terms of the policy. Bad faith action insurance companies policies, practices, and customs will be at issue to show how the insurance company acted, to show its motive, intent, plan and knowledge concerning the particular facts of the case. It is not necessary to show that a insurer acted intentionally to cause harm. Bad faith is a state of mind and may be evidenced by both acts and circumstances on the part of the insurer, but amounts to more than a mistake.
Specific facts that may indicate bad faith on the part of the insurer include demand that the insurer contribute to the settlement, ignoring settlement advice, not disclosing policy limits to a claimant, failing to foresee probable excess verdicts, taking and employing hard line settlement tactics, and properly investigating a claim and properly evaluation a claim, failing to litigate a claim, failing to provide a proper defense, failing to consider settlement, ignoring setting advice, failing to communicate with the insured about the case, or failing to advice the insured about the potential of excess judgments, failing to advise the insured about the policy coverage, failing to advise the insured about existence of settlement offers, acting on behalf of one insured to the detriment of another insured.

It is clear that when people buy an insurance policy that they are seeking protection from the risks insured. If the insurer fails to satisfy their obligations to the policy holder, the policy holder will face the financial risks for which they had purchased protection, as well as the emotional distress as a result of the breach of the policy agreement. Policy holders and beneficiaries are obviously in a vulnerable position when they must rely on their insurance carrier to protect their interest, particularly if the insurance company does not share information, or take appropriate actions to protect the insured's interests, because an insurance company generally has superior knowledge concerning the facts and law, and in all cases where the insured is the wrongdoer, the insurance company is in control of the defense. Therefore, bad faith lawsuits promote not only compensation by injured policy holders and beneficiaries, but provide deterrence from insurance companies acting oppressively towards their customers.

Collision damage waiver (CDW) insurance covers the cost of damages to the rental car if you are involved in an accident. Technically, however, it is not insurance, it simply is a provision of the rental contract that addresses your liability for damages to the car. If you choose the collision damage waiver option and someone crashes into your car, you are not liable for the damage, nor or you liable for the lost profits the rental car company may claim they lost as a result of the car being out of service.

Whether or not you need this coverage depends upon your particular situation. To determine whether you need it, you should follow these guidelines. First, check with your own insurance company or read your auto policy before you rent a car. Many auto insurance policies will provide liability insurance if you injury someone else in an accident in a vehicle you have rented. However, rental cars that are damage may or may not be covered under your insurance policy depending upon the coverage you have selected. Many people believe they have full coverage, but this doesn't mean that you are in fact covered. You need to check the comprehensive and collision coverage portions of your auto policy to determine if the rental car will be covered. Furthermore, consider whether or not any damages the rental company would claim as a result of the vehicle being out of service.

Review your credit cards and member benefits from associations you belong to. Some credit cards and some associations provide benefits that will cover damages to a rental car in the event of a collision causing property damage to the vehicle. To be eligible under these programs you have to check the terms of the agreement with your credit card or the membership or association. Typically, you would decline the collision damage waiver as well as charge the full amount of the rental car on your credit card, or make your rental arrangement pursuant to your membership with the organization. Typically these memberships entitle you to a discount on the rental car in addition to any other services. Obviously, you must make sure that your credit card or member benefits provide this service. You should also fully investigate the exclusions under your credit card or membership agreement because sometimes they do not provide such services to any rental dealer, and may have limitations.

If you do not have appropriate coverage under a auto policy, or credit card or membership benefit, then you should strongly consider buying collision damage waiver insurance. Rental cars tend to be newer cars and the value of repair/replacement of the car could run into the tens of thousands of dollars. CDW damage pays for loss of use that is claimed by the rental car company. Most states do not cover loss of use under their auto insurance policies. In other words, your legislature and department of insurance do not force insurance companies to offer this coverage. There are a few states that are exceptions including Alaska, Connecticut, Louisiana, Minnesota, North Dakota, New York, Rhode Island and Texas. However, Missouri does not mandate loss of use under auto policy; therefore, it is likely that your policy does not provide it.

Think carefully if you are a Missouri resident before declining the collision damage waiver coverage.

Mr. Faiella is a member of the law firm of Tatlow, Gump, Faiella & Wheelan, LLC. If you are having problems with an insurance issue or injury you can contact him through his firms web site www.tgflaw.com.

The Missouri Department of Insurance regulates and monitors the health of state licensed insurance companies through the analysis of financial statements that insurance companies are required to file as well as on site examinations. Other states have there own departments of insurance which perform the same function for insurance companies in those States.
If a company is found to be in poor financial condition, the Department of Insurance can take various actions to try to save the company, and protect the policy holders. Unfortunately, just like bank failures the unthinkable really does happen and insurance companies fail. Fortunately, in the vast majority of cases in the property and casualty insurance industry, most claims are covered through the insurance guarantee fund.
The insurance guarantee fund system was created by lawmakers and the insurance industry more than 40 years ago and is designed to protect consumers to deal with association losses when insurance companies fail. The guarantee fund system in Missouri will pay the amount of coverage under the policy or $300,000.00, whichever is less. These caps are fixed by Missouri state law, and the guarantee fund plays no role in setting the coverage caps.
If you have suffered a personal injury or a loved one has suffered wrongful death and you have made a claim against the responsible party, and that party's insurance company has become insolvent you have a claim against the guarantee fund. Depending upon the residence of the insurer, your claim against the guarantee fund may be in the State of Missouri or in another state. If you have a claim against your own insurance company and they are insolvent, you have a claim against the guarantee fund as well. More information can be found at the Missouri Insurance State Guarantee Fund.

California's Real Death Panels: Insurers Deny 21% of Claims .

Another story about the high rate of insurance claims denial in health care. Further investigation is needed in to this high rate of denials and whether or not they are the product of bad faith insurance company practices or not.

How you may buy your insurance policy is changing in Missouri and national. Many insurance companies are placing a large emphasis towards online purchase of policies. In some of these ads the major point is a cheap price and insurance coverage is displayed as commodities that can simply be purchased like picking a cereal box off your grocery's shelf.
The problem of course is insurance policies are way more important than what cereal you choose. Obviously the price of anything is important, and consumers are naturally price sensitive, but the old adage, you get what pay for continues to be true. If you buy at rock bottom prices online you're getting paired down coverage that may leave you with many gaps.
Simply put, all coverage are not the same, and just because you have a coverage doesn't mean you are covered exactly the same way you would be if you had seen and agent and purchased a policy that cost a little more. My advice is see an insurance agent or two in person. Get advice on what the scope and price of coverage is and then choose which policy is best for your particular situation.
Let me give you an example of how two policies can differ greatly. An inexpensive underinsured motorist policy from a national online advertiser defines underinsured motorist coverage in a way that totally off sets the coverage by what the opposing driver has in liability coverage. A more traditional company that sells its policy through agents cost a little more, but it treats the same coverage as excess over the other driver's liability coverage. So if buyer one has $100,000.00 of underinsured coverage and is in a sever crash with another driver who has $100,000 of liability coverage and is badly injured he collects $100,000.00. The second buyer who paid a little more gets to collect $200,000.00. Obviously one of these policies offers much more protection than the other.
As I see it the problem with buying on line is that you don't get to ask questions face to face, and you really don't get an understanding of what is really covered. I recommend that you treat insurance like what it really is, a very important part of your financial risk management, even if some companies want to race to the bottom competing over price.

WellPoint, United Healthcare accused of illegal actions -- latimes.com.

Amnother interesting story regrading health insurance company behavior.

In Missouri, if you get in a car crash and are seriously injured you need a Missouri car accident lawyer to help you. These lawyers are generally called personal injury lawyers. Personal injury lawyers have experience in dealing with injury and insurance law. If your case must be decided by a jury, then a personal injury lawyer knows how to present your case to the jury to maximize the value of your case. Car accident cases are decided by determining two things: fault and cause. To collect money damages the person you are suing must have been at fault and must have caused damages. Whether they are at fault is determined by the law of negligence. Negligence is a person while driving fails to act like a very careful person would act under the same circumstances.
Car accident negligence is usually a result of improper attention to rules, regulations and/or safety. This breach of the rules must also directly cause the crash and resulting injuries. Sometimes the injuries are clear such as a death from trauma, at other times the injuries may be less clear because of other aliments or conditions in the injured person's medical history.
A car accident lawyer also has the ability to help you value your case depending on the severity of your injuries, and the disruption to your life and occupation. In most cases although you were injured by a negligent motorist, your real opponent will be an insurance company who will be insuring the opposing driver or the driver and his employer. If the opposing driver is uninsured or underinsured you may have to fight your own insurance company to get paid. Insurance companies know the law, and have an incentive to minimize the value of your claim, and to delay or avoid payment. If you want to learn more visit the car accident lawyers of Tatlow, Gump, Faiella, and Wheelan, LLC.

Insurers Contributed $35.7 Million To Members of Congress Since 2005 - Consumer Watchdog.

Wonder who has your representative's ear? Consumer watch dog reports in this story that insurance companies are spending big, but not on personal injury, or health care claims.

Despite the hundreds of millions of dollars insurance companies spend on advertising to make us believe that insurance comapnies will do the right thing, their actions speak louder than words. So I will be posting stories and verdicts of insurance company fraud, insurance company bad faith, unfair claims denials so that personal injury victims, and consumers can check the fact from the fiction.
For a start read about Allstate's Bad Faith, or about HMO claims denials.

HMO claims-rejection rates trigger state investigation -- latimes.com.

Here is an interesting story from the LA times. That means 20% of all claims made are denied, despite a diagnosis and a doctor's orders.

Given all the attention of the media and public on insurance related matters, I think this story is worthy of revisiting. A Missouri Appellate Court did not believe Allstate Insurance company's assertion that its failure to settle the claims of two car accident victims in a timely manner was not bad faith. Despite its slick commercials and claims of customer service Allstate's conduct spoke volumes about the way it handles claims. Allstate has long been viewed by Missouri personal injury lawyers as one of the worst when it comes to timely and fair claims payment.

The Allstate lawsuit stemmed from a car accident that occurred in March of 2000, when a truck driven by an intoxicated Wayne Davis Jr. collided with the subcompact car carrying Edward Johnson and his wife, Virginia. Both the Johnson's survived, but their medical bills came to at least $320,000.

The Johnson's initially agreed to settle for Davis' minimal insurance policy limits of $50,000, but Allstate did not respond until six months later. That was after the statutory 60-day limit for accepting had expired.

The Johnson's were forced to sue Davis, and he agreed to a judgment in excess of $5 million. However, the Johnson's also agreed not to collect on that judgment in return for Davis assigning to them of most of his claim against Allstate for its refusal to settle. The couple and Davis then sued Allstate in Jackson County Circuit Court, alleging the insurer had acted in bad faith when it did not respond in a timely fashion to the Johnsons' initial settlement offer.

Allstate defended itself by claiming that it lost the letter proposing the offer and responded late because it did not receive the Johnsons' medical records. Allstate, in like so many companies making insurance denials asserted that it was unsure the crash had caused the Johnsons' injuries, even though the couple had to be cut out of the wreckage, were life flighted by helicopter to the hospital and received care in an intensive care unit (ICU).

At the circuit court level, the jury did not accept Allstate's defense, and in November 2006, it found that Allstate had acted in bad faith. The jury unanimously awarded compensatory damages of $5.8 million plus 9 percent interest since the date of the judgment to the Johnsons. By a vote of 10-2, it also hit Allstate with $10.5 million in punitive damages.

Allstate appealed, but on Tuesday a three-judge panel of the Missouri Court of Appeals held that the jury's verdict was justified.

"Allstate's failure to recognize the severity of the Johnsons' injuries and the probability that the claim would far exceed Davis's policy limits; its failure to investigate the claim and respond to the demand in accordance with insurance industry standards and its own good faith claim handling manual; and its failure to advise Davis of the demand, his likely exposure for an excess judgment, and his right to retain counsel, are all circumstances supporting a reasonable inference that Allstate's refusal to settle was in bad faith," Judge Paul Spinden wrote in the panel's decision.

UNH UnitedHealth Settles With New York Attorney General Over Database Unit.

UnitedHealth stacked the deck its own insureds in order to skimp on paying claims of the sick and injured. Insurance policies are contracts. Contracts are promises and insurance companies make a promise as a fiduciary when they take premium dollars for the performance of a promise to pay in the future. This story sheds some light on how private insurance companies game the system to cheat policyholders.

Missouri insurers report that more than 20,000 vehicle thefts were reported in the state last year, nearly half of them in St. Louis and Kansas City. Total losses are estimated at more than $140 million.

The five most commonly stolen vehicles in Missouri are the Dodge Intrepid, Ford Taurus, Pontiac Grand Prix, Dodge Stratus and Oldsmobile Cutlass.

The insurance group says vehicle owners can deter thieves by locking the doors, closing all windows, putting packages and valuables out of sight and parking in a residential garage. For vehicles parked outside, turning the wheels sharply to the right or left makes it difficult for thieves to tow.

The Business Week recently reported, Louisiana Insurance Commissioner Jim Donelon "said Monday that he'll support legislation to give the state's 'insurer of last resort' immunity against certain lawsuits, a proposal that could retroactively negate the firm's payout if it loses its appeal of a $95 million class-action. Donelon said he'll back such a bill in 2010 to protect Louisiana Citizens Property Insurance Corp. against lawsuits -- past and present -- that seek financial damages for failure to pay claims on time." Citizens "is appealing a ruling that the state-backed firm must pay $95 million to 18,573 policyholders because their Hurricane Katrina claims were not settled quickly enough." Donelon also intends to push for legislation "that would give the firm immunity against the requirement that a party post a bond while appealing a court's ruling."
Apparently, Donelon believes that insurance companies can break the rules, be held accountable in court and then should let of the hook for the "public good." Insurance companies that don not pay claims promptly, and fairly are in violation of industry standards and the law. Donelon should focus on forcing companies to pay legitimate claims timely and fairly. Instead he will insure there is an insurance company of last resort that does not have to follow the rules or pay claims fairly. Wow Jim great job!

Missouri has taken a stand against texting while driving as reported on the Missouri Injury Lawyers Blog story, entitled Missouri Legislature Moves to Curb Car Crashes Caused by Texting.
Now national legislation is being considered at the federal level. As reported in Insurance News Net Nationwide Insurance has announced that it will support this national effort. As reported by Insurance News Net,
"There is a growing body of research and evidence that suggests a ban on texting while driving will save lives and make our roads a safer place to drive, said Bill Windsor, Nationwide's Safety Officer."
Clearly a ban on texting while driving will prevent personal injuries and deaths. Can there be any doubt that a driver should not be driving down the road texting? Driver inattention is the largest single cause of crashes on our roads. Let's discourage people who believe that they can text and drive by making it illegal everywhere.