What Exactly does Insurance Cover? Maybe More than you Think

November 24th, 2010. By janem

Understanding the intricacies of vehicle insurance puts my brain into a fog. Fortunately, James Bedard, someone I recently interviewed regarding his legal malpractice complaint, shares some insight. “I wonder how many people suffer financially because they are not aware of what coverage they have,” says James, “and the insurance company sure isn’t telling them.” (Unfortunately, James lost his case but he isn’t giving up.)

James Bedard: Insurance can be very confusing and I think that most people do not understand what they do have in coverage.

Under many state laws, there are two types of insurance coverage.

• Uninsured (UM) means the other party has no insurance so you have to carry that UM insurance yourself.
• Underinsured (UIM) means you don’t have enough insurance.

For instance, if someone hits me and they only have minimum insurance (that the state requires), but my injuries exceed that amount, I can claim my own coverage for the difference. In 2001, someone ran a red light and I was injured. He only had $50,000 coverage but I had $1 million coverage on my truck; I was able to collect $50,000 from his insurance company and my attorney filed a claim with my employer’s insurance company for $950,000.

UM and UIM Coverage

Most every state makes it mandatory for everyone to have UM and UIM coverage. So every driver is covered if they are in an accident caused by a driver who is either not insured or doesn’t have enough insurance.

As well, most states require that you have to have the minimum coverage of $25,000/50,000/10,000, which means $25,000 for injury to one person, $50,000 for two or more people and $10,000 for property damage, e.g., car, house, etc.

When you take out your coverage it is automatic that your coverage for uninsured (UM) and underinsured (UIM) is the same. So if a person who hits you has no insurance, you are covered for the $25,000/50,000/10,000.

Say your coverage is $100,000/300,000/100,000 and you are hit by a person who only has the 25,000/50,000/10,000; your car was totaled and it was worth 50,000 dollars. You could collect the $10,000 for property damage from the other party’s insurance and fall back on your insurance for up to $90,000, which is the difference. And your car would be totally covered.

On the other hand, say you had the same coverage as the party that caused the accident. All you would receive is their $10,000 because there is no difference from your insurance policy and their policy.

It seems complicated but it really is quite simple. Most States allow a person to reject the higher UM and UIM coverage and lower it to the minimum coverage.

For example, the 100,000/300,000/100,000 coverage I had meant that the UM and UIM coverage was the same. But you could save a few dollars and reject that coverage and reduce it to 25,000/50,000/10,000. So if you hit someone they would be covered for the higher amount but if they hit you and were not insured, you could only fall back on the 25,000/50,000/10,000.

Why anyone would want to insure themselves and their family for less then the general public makes no sense–because you don’t save that much.

Insurance Incidents

My friend asked me how she was going to get her car fixed, because the person who hit her had no insurance and did not have anything to sue for. I told her to call her agent and file a UM claim. She said her coverage was $25,000/50,000/10,000 and I told her the last figure of $10,000 was for property damage–the maximum she could recover for her car. She called me later and thanked me.

My son’s friend got his hand caught in another friend’s car door and he could not use his hand for work. He worried how he was going to pay his bills. I told him to call his agent and tell him he wanted to file a Personal Injury Protection (PIP) claim, which is mandatory in most states. He called me later and thanked me–he was getting $900

a month for lost wages and up to $4500 for medical expenses.

A little girl and her mother were recently in a car accident. She was worried that her personal insurance wouldn’t cover the accident and pay her bills. Again, I told her to contact her agent and file a liability claim for their injuries and the PIP for her lost wages. Her little girl would suffer permanent facial scars and I told her not to settle for less then her maximum coverage, which was $25,000. She received all of it.

Truck vs Automobile and State vs Federal Claim

Most states also have statutes that define the words used in the statutes. For example, Kansas statute 40-284 establishes what your ” Automobile Liability ” insurance will be for the UM and UIM

State statute 40-298 and statute 8-126(x) define an ” Automobile ” as a passenger vehicle designed primarily to carry 10 or fewer passengers, which is not used as a truck.

Statute 40-284 also mentions a ” Motor Vehicle ” State statute 40-276 defines ” Motor Vehicle ” as in statute 40-284 to mean a vehicle of a passenger or station wagon type, that is not used as a public livery conveyance for passengers, not rented to others and any four wheel motor vehicle with a load capacity of one thousand five hundred pounds (1,500) or less, which is not used in the occupation or business of the named insured.

This makes it very clear that statute 40-284(c), which is used to reject and reduce the UM and UIM coverage, is not meant for trucks or any vehicle or truck used in the occupation or business of the person, who is insured. This statute is for cars driven by the citizens of the State of Kansas.

But insurance companies use this statute to reject and reduce the coverage on large trucks, used in the business of the named insured. As you can clearly read, that is not allowed. The definitions I have given you above are the exact definition of those statutes and every State has a similar statute.

You would not believe how many cases are lost to the insurance companies, simply because attorneys do not know the regulations/laws of the FMCSA and the PHMSA.

In my research I found a case where a driver had his little girl with him and a pickup caused the truck to crash. The little girl had injuries over $200,000 and their attorney filed a State UIM claim because the pickup did not have enough insurance coverage.

When they filed on the truck insurance, the insurance company came up with a rejection to the coverage and reducing it to $50,000. So they got nothing.

I researched the case and could find no rejection besides the form the insurance company submitted. I also found that the little girl was covered under the public liability of the truck. I even confirmed it with the Federal Motor Carrier Safety Administration (FMCSA). So she should have been covered for up to $1million coverage.

But because their attorney did not know the FMCSA regulations that the truck was under and then filed a State UIM claim (it should have been a federal claim), they lost the case. Unfortunately, when I checked it out, the statute of limitations had run out on their case. So it was all over, insurance company wins.

What You Can Do

Clearly, it is up to you, the insurer, to be pro-active. Not all insurance companies are created equally and not all insurance companies act in your best interest. It’s worth the time to study your insurance coverage and get good legal advice before you file a claim. And please take James’s advice: ” Always ask your attorney why he does or doesn’t do this or that…”

Happy Thanksgiving Unum

November 24th, 2010. By janem

During more than six years at LawyersandSettlements I have interviewed close to a thousand people who have suffered an injury or injustice, from bad drugs and medical devices to labor law violations. Many people I talked with brought tears to my eyes and sometimes we cried together. Among the saddest cases I heard were  those people whose lives were ruined because they were denied disability benefits from Unum insurance company, also known as First Unum and UnumProvident. Our conversations left me feeling frustrated and angry, and useless. All I could do was tell their story.

As for the name changes, the company now calls itself Unum, in an effort to make the public forget Unum Provident’s past bad faith practices. But the rebranding ain’t working for Unum’s policyholders, although it might be working for Unum: according to the Associated Press, the company’s revenue increased approximately 1 percent from last year to $2.53 billion. So why can’t the biggest insurance provider share some its wealth with those who are entitled to it?

Unum also posted an operating income of $204.7 million, up four percent from last year. To me, that translates to a lot of employees taking home fat paychecks, thanks to the company denying policyholders disability benefits.

One interview I remember that took place about four years ago still upsets me. Gladys was about 60 years old; her husband had recently passed away, the kids were long gone and she had become disabled. Because Unum refused her long term disability benefits, Gladys’s home went into foreclosure and she was counting on social security benefits, but they hadn’t kicked in.  I interviewed her from a Motel 6, where she was living a day-to-day existence, not knowing where she would stay tomorrow.

Sadly, there a lot of victims like Gladys; people who worked hard all their lives, they or their employers paid their insurance premiums for years and when tragedy strikes, they are left out in the cold. More often than not, their former employers have no knowledge of Unum denying them. Certainly Unum isn’t going to tell its clients that they haven’t acted in good faith.  (One man I interviewed actually notified his former employer, Coca-Cola, and he was able to win an appeal, but I think Jimmy’s case is rare. )

It’s ironic that Unum was recently recognized for donating millions of dollars and volunteer hours to schools, food banks, education, the arts, as well as health and wellness projects, while at the same time it is still employing underhanded tactics to deny, deny.

I guess their marketers figure that’s the way to attract more business and sell more policies. It certainly isn’t the way to keep more policy holders. Happy Thanksgiving, Unum. May you choke on your turkey wishbone.

Gift Cards a Real Gift for VISA…Cha Ching

November 24th, 2010. By LucyC

So—just when you think that banks and credit card companies cannot—could not—would not?—come up with or instigate any further deceptive business practices, they have. Are you sitting down?

A man and a woman in Illinois have filed a class action this week against VISA, Services Credit Union and 1st MidAmerica Credit Union alleging that the companies failed to disclose administrative fees for gift cards. Now, before you blow this off because it doesn’t sound like a big deal—let me tell you, it stinks.

Short version—Karen Rhodes bought her father-in-law, Gene Rhodes, a gift card with a stated value of $50 valid through several months. However, by the time her father-in-law went to use the gift card it was only worth $2! Why? Undisclosed fees charged against the gift card.

The complaint states: “Defendants placed the valid thru date conspicuously on the front of the GiftCard with the intent that plaintiff and all those similarly situated will rely on the valid thru date when, in fact, defendants knew that, due to defendants’ application of Administration Fees, the GiftCard would not retain its stated value through the valid thru date.”

And “On information and belief, and unknown to Ms. Rhodes, at the time of her purchase of the GiftCard, the actual cash value of the GiftCard was only $35.00, due to the Defendants’ application of administrative fees of $2.50 per month prior to the date of purchase.”

In other words the ‘undisclosed fees’ are deducted from the value of the gift card on a monthly Read the rest of this entry »

Man vs. Jar Lid became Man v. Del Monte and Kroger

November 23rd, 2010. By LucyC

Well, after trying the usual tactics of running the lid under hot water and then hitting it with a rubber handled tool, a man in Michigan lost his battle with a fruit jar lid. He was apparently knocked unconscious when the lid exploded off a jar of Orchard Select mixed fruit and hit him in the face. Gotta watch those plums. 

“It happened so fast. I just had no time to react… I staggered, lost consciousness and fell to the floor. I eventually screamed for my wife,” 56-year old Darryl Alexander said when interviewed during a deposition.

The poor guy ended up in hospital with eye damage and subsequently sued Del Monte Read the rest of this entry »

Attorneys Want to Give Back More and More at Equal Justice Works

November 23rd, 2010. By BrendaC

This new column at LawyersandSettlements.com looks at a side of lawyers you don’t hear too much about—the side that gives back…pays it forward..and shares the love. We’ve found quite a number of attorneys who log non-billable hours helping others—simply because they believe it’s the right thing to do. Their stories are inspiring, and hey, who knew lawyers were so…good? If you’ve got a story to share about an attorney who’s doing the right thing, let us know—we’d love to let others know, too. Today, we talk with David Stern, Executive Director for Equal Justice Works…

Attorney David Stern: “[We] were able to keep more than 1,000 families in their homes.”

There are thousands of Americans who can’t afford the high cost of justice. But since 1986, Equal Justice Works has worked to ensure that everyone has access to legal representation by engaging young lawyers through a variety of programs and putting some of America’s best legal talent where it is needed most.

“I think the reason we have been so successful is the impact our programs have on communities and individuals,” says Executive Director David Stern, who has been working with Equal Justice for 18 years. “Just looking at the foreclosure crisis, from August 2009 to September 2010, our AmeriCorps Fellows were able to keep more than 1,000 families in their homes.”

Although graduating lawyers can easily step into large firms and starting salaries of $150,000 a year, there is a growing interest in working in the public justice system. “The personal and professional satisfaction of doing public service in the legal field is well known,” says Stern. “They’re having a more direct impact, they’re trying cases earlier in their career; they’re doing work that young attorneys in large firms have to wait a long time to do.”

In fact, there is so much interest in doing public service work that Equal Justice Works has more applicants for fellowships every year than the organization can supply. “For 2010 fellowship positions we had a record number of applicants, which led to the problem of finding funding for applicants and sadly not being able to fund every project that was applied for,” says Stern.

Over the last decade the organization’s budget has grown from roughly $1.5 million to $8 million and the number of postgraduate fellowships has grown from roughly 20 to more than 100.

“We just recently held our Conference & Career Fair which attracted more law students than ever before,” Stern adds. “We had a record number of 1,300 attend the conference and career fair in October to have the chance to learn more about public interest law and to speak with public interest law employers from across the country—and that tells you a lot about how much interest there is.”

Starting salary in the world of public service world for lawyers is about $40,000 a year. Aware that many young lawyers graduate with large debts, Stern points out that there is a way for lawyers to go where their heart leads them and still manage to dispose of their student loans. “The good news for these graduates is that there is a recent law, the College Cost Reduction and Access Act (CCRAA), that allows people to pay back their debts as a percentage of income,” says Stern. “The less you make, the less you pay.”

“And the real kicker is that if a graduate stays in public service for 10 years, their federal loans are forgiven. That’s like winning the lottery,” says Stern.

David Stern is the Executive Director for Equal Justice Works. He is a graduate of the Georgetown University Law Center (1985). Prior to joining Equal Justice Works in 1992, Stern worked for a public interest law firm that represented whistleblowers in government and private industry as well as individuals in sex, race, sexual orientation or age discrimination cases.