Accident & Injury Law in Texas

Archive for the ‘insurance’ Category

The Texas attorney general on Thursday ordered insurer the Travelers Cos. Inc. to stop running a television advertisement that he called deceptive.
In a news release announcing a cease and desist order, Attorney General Greg Abbott said that the Travelers ad improperly tells Texas homeowners that they should buy additional automobile insurance to prevent losing their homes.

“Texans are protected by robust homestead laws that insulate homeowners from the losses depicted in Travelers’ advertisements,” Abbott said in the release.

If Travelers continues to air the ad, the company will face legal action by the state, Abbott said.

Abbott’s action comes two days after Texas Watch, a consumer advocacy group, asked Abbott and Texas Insurance Commissioner Mike Geeslin to take action against the company.

A television commercial advertising insurer the Travelers Cos. Inc. is deceptive and should be stopped, a Texas consumer advocacy group said Tuesday.

Texas Watch Executive Director Alex Winslow has written to both Texas Attorney General Greg Abbott and Texas Insurance Commissioner Mike Geeslin, seeking a cease and-desist order to keep the ad off the air in Texas.

In the advertisement, titled “Driving Your House,” a man is seen driving through the desert in what appears to be a wall-less house on wheels. The man gets into an accident, which spreads the house’s contents across the desert roadside.

As the homeowner-driver flies through the air — along with furniture and a cat — a voiceover says: “Without the right auto insurance, a crash might impact more than your car. Make sure you’re properly covered, so when you’re driving your car, you’re not risking your house.”

The ad concludes with the tagline: “Travelers. Take the scary out of life.”

Winslow said the message implies that if homeowners don’t carry adequate automobile insurance, then they could lose their homes. But the Texas Constitution has homestead protections that prevent the forced sale of a home in most circumstances, Winslow said.

“What’s particularly troubling about this ad is that it is preying on the fears that many people have about losing their home in our current economic crisis,” Winslow said. “Insurance companies shouldn’t be allowed to deceive their customers into buying more overpriced insurance.”

The state insurance department and attorney general each have the authority to demand that a company stop running an ad.

In 2005, Abbott issued a cease and desist order to the Allstate Corp. after the company ran an ad that featured a family that lost its home and savings because it didn’t carry enough automobile insurance. In a letter, Abbott’s office told Allstate that the ad violated the state’s Deceptive Trade Practices-Consumer Protection Act and the state’s insurance code.

Allstate pulled the ad, so no lawsuit was necessary, Kelley said.

Source: Austin American-Statesman

I recently wrote about how, if your at fault in an accident, your more likely to be sued depending on which insurance company you are covered with.

Earlier this week the Dallas Morning News ran a story about the worst insurance companies in Texas from a complaint standpoint.

The companies with the most justified complaints against them (i.e. ten worst companies) were:

1. Loya Insurance, 3.76 times as many complaints as the typical insurance company
2. Old American County Mutual, 3.42 times as many complaints
3. Nationwide Mutual, 1.91 times as many
4. Southern County Mutual, 1.9 times
5. Home State County Mutual, 1.67 times
6. Colonial County Mutual, 1.55 times
7. ACCC Insurance, 1.38 times
8. Allstate County Mutual, 1.37 times
9. Allstate Fire and Casualty, 1.34 times
10. Consumers County Mutual, 1.26 times

Complaints from Texas drivers included such practices as delays in processing claims, unsatisfactory offers or settlements, denial of claims and liability disputes.

Click here for information on filing a complaint against an insurance company.

Ask any personal injury trial attorney in Austin (not necessarily those guys who advertise on T.V. but don’t actually file suit or try cases) and you’ll find that an overwhelming number of lawsuits are filed against two particular insurance companies.

When you buy auto insurance, you’re supposed to be buying peace of mind.  But, there’s a built-in problem—your goal is to have the insurance company settle and pay any accident claim in which you were at fault, but the insurance company’s goal is to take in as much money as possible while paying out as little as possible.  When someone is making a claim against your policy, you fall on the “pay out as little as possible” side of the business.

So what happens is the insurance company tries to negotiate a quick, low settlement with the claimant.  If the person making the claim is representing themselves or if they hire an attorney who is known to settle quickly and not fight for top dollar (believe it or not, I have had one of the TV lawyers tell me that one insurance company told him they didn’t believe his threats of filing a lawsuit because he had never filed one before—and that was after handling hundreds, if not thousands, of claims).

But if the person making the claim against you is smart enough to hire an experienced accident injury lawyer, you may be on the receiving end of a lawsuit if you don’t have the right insurance company.

What is the right insurance company? The right one is one who will settle the claim for a fair value without forcing you into litigation.  The wrong company will force you to be served with a suit (possibly at work), then they will chose an attorney for you (though your policy will almost always allow you to chose an attorney), the attorney and them will convince you that they are doing the right thing and to let them handle everything (though the judgment, if it goes to trial) will be on your record, force you to take a day off of work for you deposition to be taken, and force you to take several days off of work to go to a trial you know you will lose.

My own personal survey of several of my peers and some mediators as well as reviews of the cases that I have filed suit on shows that if you have Allstate or Farmers insurance, you’re at a greater risk of being sued than with other insurance companies because they are the stingiest insurers.

I see ratings from time to time saying this insurance company or that is the best, but I’ve never seen ones for the worst.  Maybe I should start a survey to ask people who were at fault for an accident what insurance company they have and whether they were sued or it settled before suit was filed?

The Texas Department of Insurance officially proposed a rule Tuesday that would ban the use of certain policy clauses that make it easier for insurance companies to deny benefits to some policyholders.

The move is the first step in a potential ban on so-called discretionary clauses — which often exist in disability, life, accident and health policies.

Discretionary clauses give insurance companies the sole authority to interpret the terms of their policies. In other words, the clauses effectively give companies the authority to decide who gets paid and who doesn’t.

In a filing to propose the rule change, the Insurance Department said: “Discretionary clauses are unjust, encourage misrepresentation, and are de- ceptive because they mislead consumers regarding terms of the coverage.”

Deeia Beck, who represents consumers in insurance issues for the state, asked Insurance Commissioner Mike Geeslin to ban the clauses in October.

And in March, Geeslin made an informal posting of the pro posed rule change to gauge public sentiment. Now, he has taken the next step by formally proposing the change.

The deadline for written comments to the department is June 28, and there will be a public hearing on July 12.

“This is the next step in getting a permanent rule in place,” Beck said. “This is an excellent development to help rid the state of these unfair clauses.”

The insurance industry objected to the proposed change in March.
Jared Wolfe, head of the Texas Association of Health Plans, said the push for a ban is driven by plaintiffs’ lawyers – and shoddy evidence.

Almost two dozen other states have taken steps to reel in discretionary clauses.

Discretionary clauses, which are the subject of a recent public debate between insurers and consumer advocates, give insurance companies the authority to interpret the terms of their policies. They also provide the legal  cover to win most lawsuits in which policyholders sue over unpaid claims.

In other words, the clauses effectively give companies the authority to decide who gets paid and who doesn’t.

Insurers say the clauses are necessary to keep premiums low and to help them fight off frivolous lawsuits.

But Deeia Beck, the state’s public insurance counsel, has asked Insurance Commissioner Mike Geeslin to ban the clauses. Geeslin has solicited preliminary comments from the public and the insurance industry and will decide whether to formally recommend a rule change, which would trigger a formal public comment period before a decision is made.

“The use of these types of , clauses is inherently unfair. to consumers,” Beck said. “These clauses allow insurers to make patently unfair decisions, and consumers will have very little judicial recourse to have those decisions overturned.”

Beck has chosen to follow the lead of almost two dozen other states that have taken steps to reel in discretionary clauses, which are most comonly found in long-term disability policies, though Beck said some health care policies contain them, too. She said the new federal health care law would have no effect on discretionary clauses.

Not surprisingly, the insurance industry is fighting back.

Jared Wolfe, head of the Texas Association of Health Plans, said the push for a ban is driven by plaintiffs’ lawyers and shoddy evidence.

The insurance industry also has questioned the commissioner’s authority to ban the clauses.

Beck has responded to the industry’s claims of spiking premiums by pointing to a 2005 industry study, by Milliman Inc., a consulting and actuarial firm.

The study said that the prohibition of discretionary clauses would lead to a cost increase of 3 to 4 percent in disability policies, and that may be on the high side.

Beck added that the insurance industry has had several years to show that banning the clauses in other states has led to high premiums and increased litigation, but they haven’t produced any evidence to demonstrate their claims.

If Beck and other advocates manage to persuade Geeslin to make a policy change, it could take awhile before policies in Texas cease to contain discretionary clauses.

If other states’ experiences are any indication, the fight will end up in court.

Michigan and Montana, which have banned the clauses, were sued by insurance companies. Both states, however, eventually won appeals after lengthy court fights.

Even if a ban were to lead to a lawsuit, Beck said, pursuing it is still the right thing to do for the countless number of people negatively affected by discretionary clauses.

You can also read our Questions and Answers about discretionary clauses.

Which policies have discretionary clauses?

Discretionary clauses are most often found in long-term disability insurance polices. They are also contained in some health and life policies.

They exist mostly in group policies that a person takes out through his or her employer or employee organizations.

What is a consumer’s recourse after being denied a claim?

If the policy contains a discretionary clause, the consumer must prove the insurance company’s decision was ‘unreasonable,’ not just incorrect.

What gives insurance companies the right to include discretionary clauses?

The federal Employee Retirement Income Security Act, or more commonly ERISA, regulates the administration of private employee benefit plans.  You can learn more about how ERISA can screw you in an accident claim in our free guide for accident victims.

And in 1989, the U.S. Supreme Court decided in Firestone Tire and Rubber Co. v. Bruch that if policies contain discretionary clauses, then a court must defer to the insurance company’s discretion. Further, the insurance company’s decision cannot be reversed unless it can be proved that the company acted in an arbitrary and capricious manner.

What do discretionary clauses look like?

Here is a sample:
“We have complete discretionary authority, subject to Texas and Federal law, to review all denied claims for benefits under this policy. This includes, but is not limited to, the denial of certifica tion of the medical necessity of hospital or medical treatment. In performing this review, we shall have the discretionary authority to determine whether and to what extent [employees] and beneficiaries are entitled to benefits; and construe any, disputed or doubtful terms of this policy.”

Here’s an excellent article I came across today about buying auto insurance:

http://articles.moneycentral.msn.com/Insurance/InsureYourCar/10-things-your-auto-insurer-wont-tell-you.aspx?Gt1=33004

Check it out and let me know what you think.

Andrew

Big 5 insurers’ profits up 56% in 2009

As the nation struggled last, year with rising health care costs and a recession, the five largest health insurance companies had combined profits of $12.2 billion — up 56 percent over 2008, according to a new report by liberal health care activists.

Based on company financial reports for 2009 filed with the Securities and Exchange Commission, the report said insurers WellPoint Inc., UnitedHealth Group, Cigna Corp., Aetna and Humana Inc. covered 2.7 million fewer people than they did the year before.

The report Thursday also said three of the five insurers cut the proportion of premiums they spent on their customers’ medical care, committing relatively more to salaries, administrative expenses and profits.

Prepared by Heath Care for America Now, a coalition of liberal advocacy groups and labor unions, the report was aimed at bolstering the drive by Democrats to complete work on a health care overhaul, which, insurers have vigorously opposed.

Industry representatives Thursday criticized the reports approach, pointing out that 2008 was a bad year financially across many industries, skewing the 2009 comparison.
“It is disingenuous to look at the profits at one company today compared to where it was in the depth of a recession,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, the industry’s Washington-based lobbying arm.

The 2009 company profits are nonetheless intensifying pressure on an industry already under attack for raising premiums and denying coverage to millions of Americans.

“That’s why we need health insurance reform today in this country and why we are going to continue in the Congress to work on this until we see it through,” said Rep. Rosa DeLauro, D-Conn., a leading advocate of the health legislation being pushed by Democrats on Capitol Hill.

In California, Anthem Blue Cross, a subsidiary of WellPoint, is facing growing scrutiny over its decision to raise premiums for individual health insurance policies by as much as 39 percent this year for some consumers.

Thursday, WellPoint defended the rate increase in a letter to U.S. Health and Human Services Secretary Kathleen Sebelius, saying that the rising rates reflect soaring medical costs and will average closer to 20 percent for most customers.

WellPoint also said Anthem’s individual business in California lost money in 2009, as the weak economy prompted many customers to switch to lower-cost options. The company did not, say how much Anthem lost.

Indianapolis-based Well-Point as a whole posted a profit, recording net income of more than $4.7 billion in 2009.

WellPoint’s profit margin, at 7.3 percent, was the highest of the five big insurers. Margins at the other four ranged from 3.4 percent for Louisville, Ky., based Humana to 7.1 percent for Philadelphia based Cigna.

The companies were achieving better results at the same time they lost customers.

WellPoint shed nearly 1.4 million customers, a 3.9 percent drop over 2008, according to its filings. And Cigna lost 5.5 percent of its customers, or 639,000 people.

Only Aetna, which also was the only company whose profits decreased from 2008, gained customers, picking up an additional 1.2 Million people, an increase of 6.9 percent.

The shrinking customer base — which reflects increasing unemployment and the growing number of companies that are dropping coverage— was offset slightly by growth in the companies’ public sector business through Medicare and Medicaid.

We’ve all seen the Geico gecko and All State’s Dennis Haysbert on TV. They say we can save money on car insurance and maybe we can. It depends.
Prices are determined by factors such as your credit score, one of the top three factors in pricing, along with where you drive, how much you drive, your age and your gender. Your driving record is among the top ten factors calculated in the price but unless it’s terrible, it’s not as important as the others.

It pays to get five or six quotes. In some cases, you could save money buying over the Internet, but allow plenty of time to fill out a lengthy application with all sorts of questions. If you are an ultimate winner in the Web application process, you could save 15 percent over the price of buying from an agent, but not always.

Internet sellers include Geico Direct, Amica, Ameriprise, USAA and 21st Century.

In addition to your credit score, the price may also be influenced by your insurance score. Reed Elsevier sells the Choice Point Attract auto insurance score. It ranges from 200 to 997 and costs $12.95.

If you have been insured by a company for five years or more, you might get a better deal because of the loyalty discount. Having a home insured by the same company brings the multiline discount. Accident-free brings a nice discount as well.

If you have a teen driver, you will pay a high price, but could get discounts for driver training and good school grades.

Service is an important matter to consider. That is, if your agent is located a short distance away, you could get faster service for a car accident than you would from an Internet insurance provider who is a thousand miles away.