Author Archive

What’s the “Bad” in Bad Faith Insurance?

September 7th, 2010. By Kristine B

You’ve probably seen the commercials on tv: an actor—say Dennis Haysbert—walks around talking about how “his” insurance company (that would be Allstate) is his best friend…how it has his back in a bad situation…how it has bent over backwards to help him in his time of need…and, damn if he doesn’t sound so sincere! Or you’ve seen Flo–the Progressive Insurance girl–making it sound like no way no how would Progressive ever—EVER!—give you a lousy rate. No siree—Flo ensures us that buying insurance is as easy as ordering a Whopper with cheese, hold the pickles—thanks.

But, when it comes time to file an actual claim—when a real person needs real help from a real insurance company, all of a sudden it seems like there are a million reasons why the company won’t pay out a claim. Sometimes, that leads to claims of bad faith insurance—today’s Pleading Ignorance topic.

Before we get to that, though, the obligatory “not every denied claim is a legitimate claim” spiel. It’s true that insurance companies have to protect themselves from fraudsters and people out to make a quick buck off an accident. There are people who see an accident—real or faked—as a way to make easy money. This, of course, puts the honest people at a disadvantage. Why? Because they’re dealing with insurance companies that a) want to make as much profit as possible and b) have to unfortunately protect themselves from fraudsters who see the insurance companies as personal ATM’s.

The mix of profitability and self-protection can lead to claims of bad faith insurance.

So, what is bad faith insurance? You’ve probably heard of it before, because the companies that are accused of practicing it are often large insurance corporations—so it gets airtime in the news. Bad faith insurance occurs when an insurance company denies legitimate claims for illegitimate reasons.

Here’s the thing: When you buy an insurance policy to protect yourself or your family and you pay into it faithfully, with the full expectation that if you should ever need it, the policy will cover you, the insurance companies are required, by law, to pay out your legitimate claims.

Of course, it all looks good on paper—just like that insurance policy!—but when it comes down to it, some insurance companies use all sorts of tactics to avoid paying claims.

They might stall on the claim by forcing you to send in excessive amounts of paperwork—or they may claim to have found “mistakes” in the paperwork you’ve sent in. By stalling, they may push back the time your claim is received so that your claim is no longer valid. They might retroactively cancel your insurance policy—in effect waiting until you make a claim then deciding you shouldn’t have had the policy to begin with. They might find their own medical examiners who overrule your own doctor’s diagnosis. They might reclassify your illness or your claim and state that you should be able to work when you really cannot. Or they may classify a seemingly standard lab test as outpatient surgery requiring precertification that, of course, you did not get. The list of possibilities is endless.

Some insurance companies might target specific claims for denial; these claims might include anyone who claims Fibromyalgia or Chronic Fatigue Syndrome. People making those claims might automatically have their claims denied or may be required to send in additional paperwork to support their claim.

The bottom line is that “bad faith insurance” occurs any time that a legitmate claim that you’ve paid insurance premiums to be covered for is denied or delayed without sound reason. And, if you’ve found yourself in that position and have gone through the proper channels of contacting the insurance company and requesting that your claim be reprocessed or you’ve filed an appeal with the insurer to no avail, you may want to get some legal help.

Tags: Bad Faith Insurance, Denied Insurance, Insurance, Pleading Ignorance
Posted in Insurance, Pleading Ignorance | 2 Comments »

How do Eggs get Recalled for Salmonella?

August 30th, 2010. By Kristine B

If recent news about egg and meat recalls has you nervous about eating, well, anything, you might be interested in learning how a food recall is initiated. These food recalls are designed to keep consumers safe and healthy, although sometimes they cause panic in people who worry that the food supply system isn’t as safe as it should be. I’m not going to comment on how safe the food system is or isn’t. All I can do in this Pleading Ignorance post is explain how the meat and egg recall process works.

The Food Safety and Inspection Service (FSIS) operates within the US Department of Agriculture. Its job is to inspect and regulate meat, poultry and processed egg products that are produced in federally inspected plants. Basically, the job of the FSIS is to make sure that any meat, egg or processed egg products are safe and properly labeled. Foods that don’t fall into the meat, egg or processed egg product categories are regulated by the Food and Drug Administration (FDA).

A recall occurs when the product’s manufacturer or distributor voluntarily removes potentially hazardous food from the marketplace to protect the public’s health. All recalls are voluntary—even those initiated at the request of FSIS. If a company refuses to recall its products, the FSIS can seize the products.

Products can be recalled if they are believed to be hazardous to the public’s health (they can cause illness or death) or if they have been mislabeled (for example, if they contain ingredients not listed on the ingredients label).

According to the FSIS website (fsis.usda.gov), FSIS usually learns about hazardous or improperly labeled products from the manufacturer or distributor, from test results obtained by FSIS during its sampling program, from FSIS field inspectors or program investigators or through data submitted by other agencies. Once FSIS learns about a hazardous or improperly labeled product, the agency begins a preliminary investigation to determine whether or not the product should be recalled.

There are three classes of recall based on the risk to the public’s health:

Class I: there is reasonable probability that eating the food will cause illness or death (for example, the food is contaminated with E. coli bacterium);

Class II: there is a remote probability of adverse health affects from eating the food (for example, if a product contains an ingredient not included on the ingredients list but that can cause an allergic reaction); or

Class III: there are no health consequences from eating the food (for example, a product contains excess water, not included on the ingredients list, but the water will not cause any health problems).

People who are concerned about the lack of food safety might be happy to hear that a food safety bill is scheduled for a Senate vote in September. The bill, called the FDA Food Safety Modernization Act, would give the FDA power to issue recalls and increase the frequency of factory inspections.

The USDA is not affected by the Food Safety Modernization Act; however, as of July 9, new rules gave the FDA power to inspect shell eggs once they leave the breaking facility (where they are broken and pasteurized).

Tags: Egg Recall, Food Poisoning, Pleading Ignorance, Salmonella
Posted in Pleading Ignorance | No Comments »

Understanding what’s Defective in Defective Products

August 25th, 2010. By Kristine B

It’s a phrase we hear thrown around all the time in relation to lawsuits, and it’s one that many people vaguely recognize but may not fully understand: defective product. This week, Pleading Ignorance examines defective products.

A defective product is one that doesn’t work as expected and puts the user at risk of unexpected danger. Defects can occur in how the product is designed, how it’s manufactured or how it’s marketed (if the advertising for a product gives unreasonable expectations for how safe the product is).

Defective products can be any product a person buys: medications, medical devices, furniture, food, toys, automobiles…you get the picture. Even if the consumer doesn’t purchase the specific component but purchases a product that involves the defective component (think here of defective automobile brakes, where the consumer purchases the car, which includes the brakes), the product is still defective. In such cases, the victim may be able to sue the manufacturer of the defective component part and the maker of the overall product (in this example, the maker of the brake and the vehicle manufacturer).

Now—and this is important—the product must be used in the manner it was designed for. Using the product in an unintended manner and hurting yourself doesn’t make the product defective. So, if you use a knife to pick a lock and cut yourself, that doesn’t mean the knife is defective. Likewise, if you buy something from, say, IKEA (see photo above) and think that you know better than their engineers and you go and toss the supplied instructions for a more aggressive (and truly) DIY approach, don’t go crying “defective product” later when whatever you’ve built doesn’t quite “work”.

Also, there are some products that are inherently dangerous (chainsaws, explosives and so on). People claiming that these are defective have to show that there was a lack of proper warning about the safety related to the product or they have to show that the product malfunctioned even though they followed all instructions. If an explosive works as intended, it’s going to explode. But, if there weren’t adequate safety warnings about how to safely set off the explosive, or if the explosive went off before it was meant to, through no fault of the user, then the explosive could be a defective product.

Products that do not carry adequate warnings about their use or the risks involved in their use may also be considered defective. This is where some drug liability lawsuits come in. A drug may work exactly as intended but if the drug causes serious side effects and users aren’t warned about those side effects, then the drug could be considered defective.

To protect yourself, always read the safety warnings and instructions with any product you purchase and be sure to use the product only in the manner it was intended to be used.

Tags: Defective Product, Pleading Ignorance
Posted in Defective Products, Pleading Ignorance | No Comments »

Good to Know: How Statute of Limitations is like Final Jeopardy

August 20th, 2010. By Kristine B

I’ll wager a bet. If every time you took a prescription drug you heard the “Final Jeopardy” theme song (aka, “Think Music”) in the background to alert you that time could be ticking away on your ability to recover any damages for side effects you may be having from the meds, well, you’d be mighty aware of the concept of statute of limitations. You’d also probably avoid hearing Alex Trebec say, “Oh, I’m sorry…time is up…” But alas, statutes of limitations have this way of lurking quietly in the background—unnoticed until it’s too late.

Lots of legal articles mention the statute of limitations, but many people don’t know what it actually means or how it affects them. They also don’t know how complex figuring out the statute of limitations can be. So this week, Pleading Ignorance examines the Statute of Limitations and the complex role it plays in prescription drug lawsuits. 

We previously posted about the statute of limitations. Basically, the statute of limitations sets out how long a potential plaintiff has to file a lawsuit following an alleged wrong. So, for example: if the statute of limitations in a personal injury case is two years and you’re in a car accident on Feb 1, 2010, you have until Feb 1, 2012 to file a lawsuit. 

Now, you may ask, why even have a statute of limitations? After all, if someone wronged someone else it shouldn’t matter how long it takes to file the lawsuit–wrong is wrong, right? Well, wrong. Let’s take a look at some simple examples. Think about the car accident above. Say it’s now five or eight years later. And say that now the victim has some new physical maladies—like maybe joint pain that limits movement—and the victim is blaming it on the accident. Oh, but by the way, osteoporosis and arthritis run in the victim’s family. Hmm. Now we’re in muddy waters and can’t really figure out just what’s attributable to the accident.

And think of it another way—say part of a tree—yourtree—falls on your neighbors house, and damages a window. The neighbor drags their heels on doing any repairs. Fast-forward a bit and now the neighbor comes after you with a lawsuit claiming there is water damage caused by a leak from that branch falling eons ago. What’s your reaction? I’ll tell you: “Hell no it ain’t from that branch!” So there are reasons why time limits are put on someone’s ability to file a lawsuit.

Sounds simple so far, right? Not so fast. The statute of limitations varies by state and by type of wrong. So in one state there may be a two-year statute of limitations on personal injury cases but a six-year statute of limitations on property damage.  Another state may have a three-year statute of limitations for personal injury. 

Even in relatively straight-forward cases, the statute of limitations can make things complex, but when you enter the murky world of pharmaceutical litigation, things get downright tricky. 

Because different states have different statutes of limitations and because the plaintiff may be in a different state than the defendant, it becomes critical to determine where the lawsuit will be tried. 

Furthermore, the statute of limitations starts running when the harm has occurred or when the victim becomes aware of the harm (or should have been aware of the harm). But for patients, determining when the harm occurred, or when the harm was linked to the medication, can be tricky. 

Some patients suffer side effects from medications for years without realizing the medication is linked to their health problems. Even if there is a warning from the FDA about a drug, if the patient isn’t diagnosed by a doctor, he may have no reason to suspect a drug is causing him harm. For many drugs, the statute of limitations runs once the FDA has issued a warning or announced a new black box label on a drug, but not all patients link their health problems to the medication at this point.

That’s an important part of this that’s worth repeating: …the statute of limitations runs once the FDA has issued a warning or announced a new black box label on a drug. Unfortunately, many patients who become aware that a side effect is specifically related to a drug find themselves outside of the statute of limitations for litigation for that drug—that is, they connect the dots too late to really do anything about it. And that’s why sites like LawyersAndSettlements.com, and law firms and consumer advocate groups, share the “need to file by” dates with consumers—see our Heparin and Avandia post on statute of limitations.  

The bottom line? If you think you’ve been harmed by a medication, the sooner you speak to a lawyer the better. The last thing you want to hear is that you could have had a case against the drug company, but you let too much time pass before talking to a lawyer. 

And, don’t leave it until the statute of limitations is almost up. After all, the lawyer still has to collect evidence before a lawsuit can be filed. Collecting evidence takes time, too.

Tags: Pleading Ignorance, Statute of Limitations
Posted in Pleading Ignorance | 3 Comments »

How New Overdraft Protection Rules Don’t Protect You

August 16th, 2010. By Kristine B

So as of August 15, new banking regulations went into effect for overdraft protection—meaning you are no longer automatically opted-in for overdraft protection. That’s good news, because it could save you some money. The bad news is that the protection doesn’t extend to ALL overdraft transactions. Making matters worse, some banks (okay, many banks) are trying to convince customers to sign up for overdraft protection. Because this is the first week for the new overdraft protection regulations, this week’s Pleading Ignorance looks at the new regulations, how they affect you and why banks still want you to sign up.

First, though, what is overdraft protection? Overdraft protection is a way of allowing a customer’s transaction to proceed even if the customer doesn’t have enough money in his account for that transaction. If you buy a $10 lunch but only have $5 in your account, without overdraft protection that transaction will be denied. But if you have overdraft protection, the bank will authorize the payment.

The catch, though, is that overdraft protection can be expensive—up to $35 per transaction. So, that $10 lunch winds up costing you $45. Worse, you may not realize you were enrolled in overdraft protection. Some banks automatically enroll customers in the program. So you might have expected that the transaction would be denied (hopefully, you have a back-up plan for payment) but it was approved—complete with fees.

Making matters worse is that the banks have been accused of reordering Read the rest of this entry »

Tags: Excessive Overdraft Fees, Pleading Ignorance
Posted in Consumer Fraud, Pleading Ignorance | 1 Comment »