Claims And Issues

WE WANT INFORMATION. WANT TO KNOW WHAT WE WANT? CALL!

The headline of this post essentially describes one insurance company's request for "certain underwriting information" to policyholders in Mills v. AAA Northern Cal., Nev. & Utah Ins. Exch., 3 Cal. App. 5th 528, 207 Cal. Rptr. 3d 626 (Cal. 3d DCA 2016).

With one crucial added insert in the envelope, so to speak, that determined the outcome in this case regardless of the words used by the California courts here.

The insurance company offered the policyholders a choice:  Exclude their son from coverage under their automobile insurance policy by filling out and returning the enclosed form, or add him to their policy by calling the carrier.  If the carrier did not get either the filled-out form or a call, the carrier announced in the letter that it would cancel the policy.

The parents-policyholders did not call the carrier.  The carrier cancelled the policy.  Then another child of the policyholders had an auto accident.  She made a claim for Uninsured Motorist benefits.  The auto carrier denied coverage because the policy was not in effect.  The injured daughter continued to claim coverage under the auto policy and sued.

The case dealt with statutory interpretation.  California Regs explain a California Statute which allows for early cancellation of an insurance policy so long as there is "a substantial increase in the hazard insured against."

The Regs classify a non-response by the insured as a substantial increase in the hazard, after 30 days have passed following a "reasonable written request to the insured, [for] information necessary to accurately underwrite or classify the risk."

Four judges in California said that the carrier's letter and enclosure in this case was a "reasonable request" before the carrier cancelled the policy early.  (This was the view of three judges on the DCA and one trial judge.)

The rulings on appeal and in the trial court in this case were so specific to the California Statute and Regs on early cancellation, that they may not affect the outcome of requests for information on an ordinary application for insurance in the first place.  On the other hand, it is not difficult to foresee future insurance applications in California and elsewhere in which the carrier includes a question following the rulings in this case:

We need further information from you in order to process your application. Want to know what we need from you?  Call us and we'll tell you.  Otherwise, we might issue the policy and then deny coverage because you didn't tell us what we want to know.

It can't happen here, right?  Maybe in California.  Maybe not.  But not anywhere else, right?

Please Read The Disclaimer.  ©2016 by Dennis J. Wall.  All Rights Reserved.

DELAWARE STATUTE: INTEREST ON CLAIMS RECEIVED, UNPAID WITHIN 30 DAYS.

 

Image by NASA.

In Clark v. State Farm Mut. Auto. Ins. Co., No. 167,2015, 2016 WL 125432 (Del. January 11, 2016), the Supreme Court of Delaware affirmed a lower court's refusal to certify a class of people whose motor vehicle insurance claims were not paid within 30 days and yet did not receive interest payments from their insurance carrier.

The named plaintiffs had both been paid interest although their motor vehicle insurance claims had been received but not paid within thirty days.

The Supreme Court refused to follow the plaintiffs' newer theory requesting that the Delaware statute be construed to require payment of motor vehicle insurance claims within thirty days, "or else."  The Court wrote that the Delaware Legislature left those decisions to itself, and not to the Delaware Judiciary.  In the statute at bar, the Legislature made its policy choice:  The consequence for not paying insurance claims within thirty days of receipt is the accumulation of interest.

Please Read The Disclaimer.  ©2016 by Dennis J. Wall, author of "Insurance Claims and Issues" (forthcoming Thomson Reuters 2016).  All rights reserved.

"INSURANCE CLAIMS AND ISSUES," THE BOOK: COMING IN 2016!

 

 Storm Clouds lined up over the Gulf of Mexico.  Photograph and text copyright 2015-2016 by Dennis J. Wall.

I am hard at work on an anthology of the best blogs from "Insurance Claims and Issues."  The anthology I submit to my publisher will keep all hyperlinks intact, including links to the Insurance Claims and Bad Faith Law blog.  When articles posted on Insurance Claims and Bad Faith Law blog are important to the anthology of "Insurance Claims and Issues," I am including them in the anthology too.

As each previously posted article is updated, the posted articles will remain just as available here as they always have been.  New articles will benefit from me being better informed and better equipped to discuss future insurance claims and issues.

I have contracted with Thomson Reuters (West Publishing Company to those fortunate to have the experience) to publish "Insurance Claims and Issues," the Book, in the late Spring or early Summer of 2016.  Best wishes to everyone for a joyous and Happy New Year!

Please Read The Disclaimer.  ©2016 by Dennis J. Wall, author of "Insurance Claims and Issues" (forthcoming Thomson Reuters 2016).  All rights reserved.

Related articles

Convincing Anyone Yet? Coverage, Contraception, and the Court.

CYBERINSURANCE:  MANY DATA-LESS RISKS TO UNDERWRITE & PREMIUMS TO CHARGE.

THE ALI RESTATEMENT PROJECT OF THE LAW OF LIABILITY INSURANCE.

Majority Holds No Negligence Cause of Action by Insured Against I.A.

Insurance Issues For the Ride-Selling, Room-Renting Economy.

There are an increasing number of reports raising questions about the extent of sellers' liability in the new ride-selling, room-renting economy.

Share these concerns?  In this climate, insurance issues are well worth a close examination given so many questions of liability in so many situations. A large top-tier law school is considering a symposium on the insurance issues shared by the potential liabilities of our new ride-selling, room-renting economy.  Let's leave it up to them to make their own announcement of who, when, and where.

Please Read The Disclaimer.  Copyright 2015 by Dennis J. Wall.  All rights reserved.

Related articles

What's in a Claim? A Defense, Possibly.

Zero to 29%: Different Rates, Different States, But Different Carriers?

               A blind study offering carriers an applicant for State-mandated auto liability insurance -- no frills, mind you -- produced huge premium differences.  The hypothetical auto insurance applicant in each case was a hypothetical widow with other personal factors that were held steady everywhere her application was submitted.

                Premium offerings varied not just depending on locale, but on which carrier offered the mandated auto liability insurance coverage.  One carrier never charged more to the same applicant in any place, while other carriers increased their premiums each according to its own reasons, from 3% more to 29% more.  Why?  We do not know.  The carriers apparently would not explain beyond offering untrue platitudes about the costs of insurance while treating everyone 'equally,' which is clearly not the case.

                And why does being a widow make such a big difference in her auto liability insurance premiums anyway?

                Questions that we can ask about the price of auto liability premiums are suggested by Ann Carrns, "Your Money Adviser / The Curious Factors That Shape Premiums," p. B5, col. 1 (New York Times Nat'l ed., "Personal Business" Section, Saturday, August 8, 2015). 

 

Please Read The Disclaimer.  ©2015 by Dennis J. Wall, author of "Lender Force-Placed Insurance Practices" (American Bar Association 2015).  All Rights Reserved.

UIM SETOFF AGAINST POLICY LIMITS, NOT AGAINST CATASTROPHIC DAMAGES.

            A Tortfeasor's Liability Policy Limits are a setoff against Underinsured Motorist Policy Limits.  This is the rule in Illinois, as in most U.S. jurisdictions.  They are not set off against the Policyholders' Catastrophic Damages.  Such is the holding in Download Wehrle v. Cincinnati Ins. Co. *2, *4  (N.D. Ill. Memorandum Opinion and Order Filed August 21, 2012).

             This rule was applied because the UIM Policy at issue in that case required that a Tortfeasor's Liability Limits be set off against the UIM Policy Limits.  That the UIM Statutes authorized the Policy provision determined the outcome.  See Download Wehrle v. Cincinnati Ins. Co. *2 (N.D. Ill. Memorandum Opinion and Order Filed August 21, 2012).

 

Please Read The Disclaimer.

Ask; They Won't Tell!

   In the United States, the "average" Insurance Premium per automobile for Liability, Comprehensive, and Collision Coverages is about $901.00.  Tara Siegel Bernard, "Your Money / Car Policy For Less, But Only if You Call" p. B1, col. 1 (New York Times Nat'l ed., "Business Day" Section, Saturday, February 4, 2012), citing National Association of Insurance Commissioners' statistics for the year 2009, the most recent available.

   The "average" Insurance Premium depends not only on where you and your clients live in this country, but also on which Insurance Company is offering the Coverages.

   Your Insurance Company probably will not tell you if you or your clients are paying too much in Premium.  They are generally not required to do that.  The Insurance Company will understandably be only to happy to collect the Premium, without notifying you whether you are overpaying it.  Shopping around is up to you.  Ask questions.

   And put your questions to your Insurance Company directly.  If for any reason you must go through your Agent, ask your Agent to ask the Insurance Company.  Go to the end of the horse that speaks, in other words, go to the horse's mouth.

   The questions to ask are simple and direct.  For starters, ask the Insurance Company:  "Is there a plan or policy offering the same Coverages at a lower Premium than what I am paying now?"  Ask other Insurance Companies the same questions.  Shop around.  Do your research.

   It may save you in the end.  See also Tara Siegel Bernard, New York Times, supra; and this free downloadable copyrighted pdf guide published by the National Association of Insurance Commissioners: Download A Consumer's Guide to Auto Insurance (NAIC 2011).

Please Read The Disclaimer.

NO AUTO LIABILITY INSURANCE COVERAGE FOR TEXTING WHILE DRIVING?

"We have an obligation to pay that claim, to protect that innocent bystander, even if you were stupid."  Ms. Loretta Worters, Vice President of the Insurance Information Institute ("III"), quoted by Ann Carrns, "Texting, Driving and Insurance" p. B4, col. 5 (New York Times Nat'l ed., "Business Day" Section / Bucks Blog, Saturday, January 14, 2012), edited and posted Online under the headline, "What if Insurers Didn't Pay for Crashes Caused by Texting?".

 

   Should Automobile Liability Insurance Coverage extend to cover texting while driving?

 

   Many standard Exclusions already exist for things like hazardous activity, but the hazardous activity excluded by these standard provisions is usually undertaken by large business organizations.  Specifically excluded hazardous activities are addressed by Pollution Exclusions, for example.

   Of course, there are currently also standard Exclusions in Automobile Liability Insurance Policies for risks which are ordinarily compensated by other types of Insurance such as Workers' Compensation, Employee Indemnification and Employer's Liability, and Fellow Employee Exclusions.

   There is also a standard Exclusion currently in effect which is written to address the risks associated with a type of dangerous driving which Insurers simply will not assume under Automobile Liability Insurance Policies:  Racing.  The standard Racing Exclusion applies to exclude all Automobile Liability Insurance Coverage, in brief, for (1) covered autos while they are being used in professional or organized racing contests, (2) practicing for them, and (3) while the auto in question is being prepared for a racing contest or activity.

   This seems arguably similar to any proposed Exclusion for the dangers or risks inherent in texting while driving the covered auto:  Such an Exclusion would presumably exclude all Automobile Liability Insurance Coverage for covered autos while they are being used simultaneously with the driver's texting.

   If an Exclusion seems inappropriate for any reason, perhaps that is because arguably the nub of the Coverage question is the position that there should never be Automobile Liability Insurance Coverage for any damages caused by the use of a covered auto which would not have occurred but for the driver texting.

   There is simply no good reason why Automobile Liability Insurance Policies should be made to respond to Cover damages resulting from texting activity, in the face of new, express Policy language appropriately written into the standard Automobile Liability Insurance Policy.

 

Please Read The Disclaimer.

Today is Dr. King's Birthday observed.  Remember the good and be well.

Insurance Exclusions Ambiguous, Unambiguous May All Apply.

   Florida's Supreme Court has upheld the standard so-called "Household Exclusion" in an Auto Liability Insurance Policy.  It is not ambiguous, the Court held, and so it can be applied to Exclude all Coverage for Bodily Injury Damages claimed by members of the Additional Insured's household.  State Farm Mutual Auto. Insurance Co. v. Menendez, 2011 WL 3715044 *1 (Fla. Case No. SC10-116, Opinion Filed August 25, 2011; STATED NONFINAL)(authorized password required to access Westlaw).

    Ambiguity in an Exclusion, however, does not necessarily mean that the Exclusion at issue in a given case does not apply.  An interpretation of ambiguity only means that the Insurance Policy provision will be interpreted strictly against the Insurance Company which drafted it.  It may still apply, as in the case of Download Certain Underwriters at Lloyd's, London v. Abundance Coal, Inc. (Ky. Ct. App. Case No. 2009.CA.001283, Order Reversing, Vacating and Remanding) PUBLIC ACCESS, also published as 2011 WL 2496203 *3 - *5 (Ky. Ct. App. June 24, 2011; case involved Commercial General Liability Insurance Policy's standard "Absolute Pollution Exclusion" in this regard)(authorized password required to access Westlaw).

 The 22nd Annual Bad Faith Litigation Conference of the American Conference Institute is being held in 2011 in Orlando, Florida.  The author will be speaking.  Here is a link to the American Conference Institute Website Page which features this Conference including registration, if you or someone you know would like to attend. 

Please Read The Disclaimer. 

Direct Action Allowed Based Only on Wisconsin "Business Operations" Coverage.

   In Download Casper v. American International Southern Insurance Co. (Wis. Case Nos. 2006AP1229 et al, Opinion Filed July 19, 2011) PUBLIC ACCESS, also published as 2011 WL 2820530 (Wis. July 19, 2011) (authorized password required to access Westlaw), the opinion of the Wisconsin Supreme Court identified three issues for the Court's consideration.  We are concerned here with the second of those issues, which the Court's opinion identified in the following terms:

    ¶ 4 Second, can the Caspers maintain a direct action claim against National Union when its policy of insurance was neither delivered nor issued for delivery in Wisconsin but the insurance policy covers the insured's “business operations” conducted in this state? Relying on Kenison v. Wellington Insurance Co., 218 Wis.2d 700, 582 N.W.2d 69 (Ct.App.1998), the circuit court and court of appeals answered “no.” In this review, the Caspers contend that a plain reading of Wis. Stat. § 631.01(1), together with Wis. Stat. § 632.24, authorizes direct action against an insurer in any of four situations stated in the disjunctive in Wis. Stat. § 631.01(1). Only one of these four situations requires delivery of the policy in Wisconsin.

Casper v. American Southern International Insurance Co., 2011 WL 2820530 at *1 ¶ 4.

   The Supreme Court overruled previous intermediate appellate court case law and held that the answer to its own question is, in this case, a resounding "yes":

¶ 8 Second, a liability insurance policy need not be delivered or issued for delivery in this state in order to subject the insurer to a direct action under Wis. Stat. §§ 632.24 and 803.04(2). Kenison is accordingly overruled, and the decision of the court of appeals on this issue is reversed.

 Id. at *2 ¶ 8.  (Prosser, J., for the Supreme Court of Wisconsin).

   The Supreme Court's decision has far-reaching implications for direct actions under similarly worded statutes in other jurisdictions.  Insurers which have issued all kinds of Insurance Policies may find themselves defending lawsuits in places they never imagined going.  Until then, keep an eye on the Wisconsin Bar Website, among other sites, such as "Legislation:  Insurance Litigation & Regulatory Law Blog" (see in particular there, this post on August 10, 2010 by James Carlyle, "The California Supreme Court Reiterates Analysis for Determining Whether a Statutory Violation Confers a Private Cause of Action") to see what others have to say about the implications of this Wisconsin Supreme Court decision.

Please Read The Disclaimer.

 

Young Driver Savings Buying Auto Insurance: Shop Till You Drop!

   Are you a young driver, or do you or your clients have a young driver in the household who is in the market for buying Auto Insurance?  This timely newspaper article will take you through the whole process.  The bottom line?  Shop till you drop, and get the best Policy for your money that you can:  See Kathy M. Kristof, "Personal Finance / Auto Insurance Premiums for Young Drivers Vary Widely" (Los Angeles Times Online, posted May 22, 2011).

Please Read The Disclaimer.

Certified Question May Trigger Declaration of Nevada Insurance Coverage Law.

   A panel of the Ninth Circuit Court of Appeals was recently faced with what it called "an important, open question of Nevada law."  Progressive Gulf Insurance Co. v. Faehnrich, 2010 WL 4948507 *1 (9th Cir. December 7, 2010)(authorized password required to access Westlaw).

   The U.S. District Court granted Judgment to the Policyholders-Plaintiffs in that case.  It refused to apply a Family Member Exclusion as a matter of Nevada public policy.  However, the Insurance Contract before the Court was issued and delivered in Mississippi.  Mississippi Insurance Law reportedly upholds the Family Member Exclusion.

   On appeal, the Ninth Circuit neither affirmed nor reversed the District Court.  Instead, the Ninth Circuit certified this question to the Nevada Supreme Court:

   Does Nevada's public policy preclude giving effect to a choice-of-law provision in an insurance contract that was negotiated, executed, and delivered while the parties resided outside of Nevada, when that effect would deny any recovery under Nevada Revised Statutes section 485.3091 to Nevada residents who were injured in Nevada?

Progressive Gulf Insurance Co. v. Faehnrich, 2010 WL 4948507 at *3.

   In what may seem a roundabout way, Nevada Insurance Law may determine the outcome in this case after all.

Please Read The Disclaimer.

Pay-As-You-Drive Automobile Insurance: No Florida Track Record.

   Pay-as-you-drive Automobile Insurance predicates Premiums on how many miles you or your clients drive, mixed with driving history, geographical location, and other Premium Rating factors.  See Ivan Penn, "What is Pay-As-You-Drive Insurance?" (St. Petersburg Times Online, Friday, January 15, 2010).  The first Automobile Insurance Company to offer this type of Premium Rate in Florida will begin issuing Policies on April 1, 2010, it is reported.  Id.

   Between now and April Fool's Day, we need to know more about Pay-As-You-Drive Automobile Insurance than how to define it.  It has no track record in Florida.  However, drivers in other States and jurisdictions may have greater experience with it.  Here in Florida, the wise thing to do is to learn more about it before we consider spending our money on it.

Please Read The Disclaimer.

Links to Tips For Saving Outlays on Automobile Insurance.

   In this report by Ivan Penn, "Daily Q&A:  How Can I Save Money on Car Insurance?" (St. Petersburg Times Online, Friday, January 8, 2010), some tips are given to do just as the article's headline suggests, including potential savings arising from:

   Your age.

   Your credit history.

   Vehicle Type.

   Agent's Commission.

There is also a link in this report to SmartMoney Magazine for reportedly more tips:  www.smartmoney.com/spending/autos/10-Things-Your-Auto-Insurer-Wont-Tell-You/.

Please Read The Disclaimer. 

Automobile Insurance Company Group Lists Cars by Safety.

   In an annual event, the Automobile Insurance Industry has again issued a list of automobiles in rankings according to the cars' various safety records.  There is a useful link to a November 19, 2009 post on driveon.usatoday.com, in which the newspaper has also included links to web sites of the various automobiles in question.

Please Read The Disclaimer.

No EOB Deadline, No Private or Implied Statutory Cause of Action.

   In a newly released Florida Appellate Court decision, the Court confronted two issues involving Florida Statute Section 627.736(4)(2004), which was and is a subsection of Florida's Personal Injury Protection or "PIP" Statute.  The first issue was whether the Florida Statute establishes "a firm deadline" for providing a Policyholder with an Explanation of Benefits ("EOB") under Florida's Motor Vehicle No Fault Law.

   The Florida Appellate Court held that it does not.  Download United Automobile Insurance Co. v. A 1st Choice Healthcare Sys's, Inc. (Fla. 3d DCA Opinion Filed November 4, 2009), attached Official Slipsheet Opinion at 7-8.

   The second issue was whether the Florida Statute conveys a private or implied statutory cause of action in cases where it is allegedly breached.

   The Florida Appellate Court again held that it does not.  Download United Automobile Insurance Co. v. A 1st Choice Healthcare Sys's, Inc. (Fla. 3d DCA Opinion Filed November 4, 2009), at 8.

   "However, actions have consequences."   Download United Automobile Insurance Co. v. A 1st Choice Healthcare Sys's, Inc. (Fla. 3d DCA Opinion Filed November 4, 2009), at 6.  Consider what those consequences can include, in a further post yet to come, involving this interesting new decision under Florida Statute Section 627.736(4).

  TO BE CONTINUED ......

Please Read The Disclaimer.

Link to Advice Source on Purchasing Automobile Insurance Coverage.

   Insurance Coverage in Automobile Liability Insurance Policies is at the heart of this useful newspaper report, with many sources mentioned in it for you to follow up, containing helpful advice on purchasing Automobile Liability Insurance Policies generally:  Julie Patel, "News to Use/Top 10:  Tips for Getting the Best Price, Coverage for Auto Insurance" (South Florida Sun-Sentinel (Ft. Lauderdale), Wednesday, October 21, 2009).

Please Read The Disclaimer.

Automobile Insurance: Driving Down, Premiums Up.

     Why have Automobile Insurance Premiums gone up while driving has gone down?  Insurance Companies report that although it is a fact that drivers in this country drive fewer miles now than they did in the past, the reduction in driving has not affected the number of reported accidents at this time.  In addition, the Insurance Companies point to many factors that increase the cost of Claims, and thus cause an increase in Automobile Insurance Premiums:

            1.  Inflation;

            2.  Commodities price increases including in the prices of materials to repair vehicles;

            3.  Medical Expenses, and

            4.  Legal fees and costs.

    Automobile Insurance Companies also point out a fifth factor, possibly of greater significance than these four so far:

            5.  An anticipated rise in car crashes if the current driving reduction is due to the economy, which is the most accepted usual suspect as the cause for reducing vehicular collisions.  After the oil embargo in 1973 and 1974, vehicular collisions declined while the embargo lasted, then picked right back up after the embargo was over.   In anticipation of the same thing happening now -- and assuming that the current economic conditions "return to normal" -- rising Automobile Insurance Premiums are a hedge against history.

    All of these events are reported by Mary Williams Walsh, "Driving is Down, But Auto Insurance Rates Are Rising" (New York Times Online, Saturday, August 23, 2008).

Please Read The Disclaimer.

"Fay, You Are No Hurricane": But Claims are Coming in.

    There are a significant number of Claims and more to come from the passage of Tropical Storm Fay over Florida, as reported by Julie Patel, "13,847 Claims Filed After Fay" (South Florida Sun-Sentinel.com, Wed., August 27, 2008), Claims are coming in even though Fay is no longer stationary over Florida.  To date, there are reportedly:

            11,678 Homeowner's Insurance Claims;

              1,404 Automobile insurance Claims; and

                756 Flood Insurance Claims.

Hurricanes can cause Catastrophic damage.  Fay has proven beyond any doubt that Tropical Storms can cause Catastrophe Claims, too.

Please Read The Disclaimer.

California Contemplates Car Coverage For Miles.

     A new plan to base Automobile Insurance Premium Rates on the number of miles a Policyholder actually drives is being gassed up by a combination which includes some Insurance Companies, environmentalists, and California State legislators.  Here is how it would reportedly work.  Policyholders would agree to pay Premiums for their Auto Insurance based on how many miles they drive.    Pilot programs are reportedly posted by Progressive Corporation in Michigan, Minnesota and Oregon.  GMAC also offers the so-called pay-as-you-drive Automobile Insurance Premiums to a reported 30,000 willing Policyholders across the nation where such plans are authorized at this time.  Marc Lifsher, "State Considers Pay-As-You-Drive Auto Insurance" (Los Angeles Times, Tuesday, July 15, 2008).

     The catches include reported privacy concerns and business failure.  First, the business failure concerns.  The pay-as-you-drive Auto Insurance Premium system was attempted in the United Kingdom two years ago by Britian's largest Auto Insurance Company, Norwich Union.  Last month, Norwich Union cancelled the program because so few people wanted it.

     Second, the privacy concerns.  Implementation of the pay-as-you-drive system apparently requires that a device be hardwired to your car to monitor the actual number of miles you drive.  (Estimates of how much you will drive not being dependable enough, apparently.)  The mechanical monitors also record your location and it is unknown to the general public what if any other things about you they record, whether or not you know it.

     For every try at lowering Insurance Premiums, there is a tradeoff of one kind or another.

Please Read The Disclaimer.

Florida Court Upholds Allstate New Business Suspension Until Documents Produced.

    Florida's First District Court of Appeal issued its Opinion on Friday, April 4, 2008 upholding an Order suspending Allstate's authority to transact new business in Florida:  Download Allstate_v. Office of Insurance Regulation (Fla. 1st DCA Case No. 01D08.0275, Opinion Filed 04.04.08).pdf.  See the posts in this space through January 24, 2008 to understand the leadup to this event.  In basic and simple terms, the saga began in the Fall of 2007 with subpoenas by the State of Florida Office of Insurance Regulation, Allstate's refusal to produce the requested materials at an O.I.R. Hearing in January, 2008, and the O.I.R.'s immediately resulting Order suspending Allstate's authority to conduct new Insurance business in Florida.

    The Order was issued by the Florida Department of Insurance or Office of Insurance Regulation.  The Order, termed an Immediate Final Order or IFO, "immediately suspended Allstate's Certificates of Authority to transact new insurance business in Florida.  The suspension would terminate upon Allstate producing documents OIR previously subpoenaed in an investigation of Allstate's insurance practices."

    The Florida Appellate Court held that OIR was within its rights to issue this narrowly tailored Order to enforce its own subpoenas.  Allstate v. Office of Insurance Regulation, attached official Opinion of the Court, at 2.  The OIR Order is narrowly tailored because it "was limited in scope."  Id. at 13.  The OIR could have issued an Order suspending any Allstate business, the First District appellate panel unanimously wrote.  "In limiting the scope to suspension of new business, OIR's action mitigates the  potential harm from Allstate's alleged insurance practices while still allowing Allstate to service existing policies."  Id.

    The documentation Allstate refused to produce -- and all 30,000 documents Allstate did produce were each and every one labeled "Trade Secret" -- were in response to subpoenas "in connection with OIR's investigation of Allstate's relationship with risk modeling companies, insurance rating organizations, trade associations and compliance" with legislation concerning Premium Rate Increases passed at the 2007 Special Session of the Florida Legislature.  Id. at 2-3.

    The Order in question was issued by the OIR in response to Allstate's refusal to produce almost all of the documents actually requested by the OIR and "Allstate's 51 pages" of objections.  Id. at 6.

    The First District's decision was to affirm and immediately lift its earlier stay of the OIR Order.  Allstate in its many manifestations which are parties to the appeal -- e.g., Allstate Floridian, Allstate Indemnity, Allstate Property & Casualty, Allstate Insurance, etc. -- has time if so advised to file a Motion for Rehearing and possibly to seek appellate review in the Supreme Court of Florida.

Please Read The Disclaimer.

Auto Lines Line Up Profit Hikes.

   Many Auto Insurance Companies reportedly have been seeking to raise Premiums in 20 States or more.  In the $160 Billion Automobile Insurance Industry, the 4 largest Automobile Insurance Companies ranked by Premiums charged are currently State Farm Mutual Automobile Insurance Co., Allstate Corp., Progressive Corp. and GEICO Corporation.  Safeco, another familiar Auto Insurance Company name, is ranked 13th by the total amount of Auto Insurance Premiums it charges.

   There are two reasons given for the Premium increase, and the two reasons given relate to Property Damage Insurance and to Bodily Injury Coverage:  Increasing costs for Auto Repair and for Medicalcare.  Erik Holm, "Auto Insurers Boost Premiums on Injury, Crash Costs (Update1)" (Bloomberg.com, Fri., Feb. 8, 2008).

Please Read The Disclaimer.

Make a Buck for Citizens in Florida: Auto Insurance Too?

    At least one concerned Florida citizen has written a letter to the editor regarding what that citizen perceives as attempts by various Insurance Companies to circumvent legal requirements put in place in 2007.  That year, in a Special Session of the Florida Legislature, Insurance Companies were mandated to, among other things, make Homeowner's and other Property Insurance Policies available in Florida if the same Insurance Companies or their parents offer (the much more lucrative) Auto Insurance Policies in Florida.

    The letter writer suggests that Insurance Companies are evading the 'offer one, then offer two' rule and suggests a solution:  Allow Citizens Property Insurance Corporation, a public corporation owned by Florida Taxpayers, to issue not just Homeowner's and other Property Insurance Policies that private Insurers do not want to touch, but also allow Citizens to issue Auto Insurance Policies, too:  "Citizens, Consider Adding Auto Insurance" by Samuel Z. Kobran ([Ft. Lauderdale] Sun-Sentinel .com, Friday, March 28, 2008).

Please Read The Disclaimer.

California Commissioner Cuts Allstate Auto Premiums.

   In a move echoed in other areas such as Florida, the California Insurance Commissioner reportedly has ordered Allstate to cut Premiums on Automobile Insurance by 15.9%.  That would reduce Premiums by about $133.00 a car and it would be twice the reduction that Allstate offered its Automobile Insurance Policyholders.   Marc Lifsher, "Allstate Must Cut California Auto Insurance Rates 15.9%" (Los Angeles Times Online, Wed., March 19, 2008).

   It is also reported that the next front on the Premiums battleground in California will come in the area of Homeowner's Insurance.

Please Read The Disclaimer.

Premiums Increase More Because Road Safety, or Traffic? True, False?

                                                      True!

    A study published by the American Automobile Association provides evidence that "roadway safety," i.e., accidents, cost much more than traffic congestion.  The cost of accidents, says the AAA study, is 250 percent greater than the cost of "traffic tie-ups".  Angela Greiling Keane, "U.S. Road Safety Needs Focus Over Traffic, AAA Says (Update 2)" (Bloomberg.com, Wed., March 5, 2008).

    On the strength of these results, it appears to be pretty clear that to help keep Automobile Insurance Premiums under control -- and to help keep more people in our country alive and healthy -- public monies would be well spent in the direction of preventing accidents and not just building more roads capable of delivering more traffic and more accidents.

    Please Read The Disclaimer.

Scouting for Automobile Insurance Companies.

    Here is a list with contact information of many Automobile Insurance Companies operating in the broad area surrounding Boston, Massachusetts.  The source is given as the Massachusetts Insurance Department.

    What a lengthy list of potentially valuable resources.  If you or those you represent are in the market for an Automobile Insurance Policy, see if these companies are in areas of interest to you.  Then, you can use this contact information to obtain and compare their responses to see which Automobile Insurance is best for you.

Please Read The Disclaimer.

"Diminished Value" Automobile Insurance Coverage Claims.

   "Diminished value" Automobile Insurance Claims are claims for Insurance Coverage for the diminished value of an auto that has been in accident and has had to be repaired.  They are discussed as the cutting edge of a new wave of Insurance Coverage Claims in Gregory Karp, The (Allentown) Morning Call, reprinted as "Insurer Pay You Enough After Accident?" p. G1, col. 6 "Your Money" Section (Orlando Sentinel, Sunday, March 2, 2008).

Please Read The Disclaimer.

Allstate and the Florida Office of Insurance Regulation.

    Here is a summary and the status of Allstate's appeal from an order of the Florida Office of Insurance Regulation which sanctioned Allstate for failing to produce documents subpoenaed by the OIR for a Hearing in January:

     On Jan. 17, Kevin M. McCarty, the state's insurance commissioner, banned Allstate and its affiliates from selling new insurance policies in the state after the company failed to turn over records to state officials investigating insurance pricing.  A state appeals court blocked the order pending Allstate's appeal.

Joe Follick & Kirk Semple, "Florida Insurers Defend Increases in Home Rates" p. A19, col. 5 (New York Times Nat'l Ed., Tuesday, February 5, 2008).

    Here is the opinion of one person that the Florida State Government is on the right track in pursuing the subpoenaed documents:  Robert Trigaux, St. Petersburg Times Business Editor, "It's Time for Florida to be a  Heavyweight on Insurance" (sptimes.com, Sunday, January 20, 2008).

Please Read The Disclaimer.

Allstate Provides some Documents to Florida.

            Slow Drip, Drip, Drip of Documents Planned While Appeal is Decided.

     The so-called McKinsey Report on insurance behavior in handling claims and increasing profits was among many, many documents subpoenaed by the State of Florida from Allstate.  History helps to understand.  See previous posts here as well as the brief summary below.

     With at least 60 days to respond to subpoenas served on it by the Florida Office of Insurance Regulation, Allstate on January 15 announced its decision not to provide documents.  Instead, Allstate filed 51 pages of objections that day.

     On January 16, the OIR suspended Allstate's certificate to do business by issuing any new Automobile Insurance Policies until it complied with the OIR subpoena.  On January 17, the OIR apparently entered a further order suspending Allstate's certificate for all new Insurance Premium business of any kind in Florida until Allstate complied with the supoenas.  That meant that Allstate could not collect new Premium money while its certificate was suspended.

     Allstate appealed this decision on January 17.

     On January 18, a Florida appellate court stayed the OIR order until the appeal was done.

    The latest development for now occurred on January 23, 2008.  It is now reported that one of Allstate's 51 pages of objections was that the McKinsey Report addressed  how to maximize profits for Allstate from handling Automobile Insurance claims rather than any other kinds of claims for losses such as Homeowner's and other Property Insurance claims.

    On Wednesday, January 23, 2008, Allstate produced some documents in response to the Florida subpoena even as Allstate pursues its appeal.  Allstate's limited production includes the seeming distraction of the McKinsey Report.  According to the news article, Allstate apparently plans to produce more documents in phases as it hopes for a favorable ruling on appeal.  See Anika Myers Palm, "Allstate Provides Documents to State" p. C1, col. 5 (Orlando Sentinel Central Florida Business Section, Thursday, January 24, 2008).  To be fair, the headline on this newspaper report should read, of course, "Allstate Provides Some Documents to State".

Please Read The Disclaimer.

The "McKinsey Report": Behind Allstate's Subpoena Behavior?

    A Bloomberg news report published online on Tuesday, January 22, 2008 adds insight into exactly why Allstate would adamantly refuse to produce documents in response to subpoenas from the Florida Office of Insurance Regulation.

    According to the Bloomberg article, Florida officials and others are "anxious to get hold of a report by New York's McKinsey & Co., a business consulting firm."  Although it is unclear from Bloomberg whether the so-called "McKinsey Report" has ever seen the light of day, it certainly has been seen by Allstate officials, according to the article.   McKinsey was paid by Allstate to come up with claims handling practices that would assist Allstate in denying and delaying the payment of claims, and thus save Allstate money, so the article reflects.  Allstate allegedly used the McKinsey Report as the basis for Allstate's own "Claims Core Process Redesign" by which Allstate intended to reduce paying Bodily Injury Claims by as much as 20%.  See Victoria Slind-Flor, "Allstate, Microsoft, Google:  Intellectual Property (Update 1)" (Bloomberg.com, Tuesday, January 22, 2008).

    If any of those things are true, any one of them would provide very strong motivation to Allstate to keep anything like the "McKinsey Report" under wraps  -- even if that meant the certainty of offending the Florida Office of Insurance Regulation and the chutzpah to run the related risk that the Florida OIR may not be able to do anything about it.

Please Read The Disclaimer.