Claims And Issues

Don't Know Much About Long-Term Care Insurance?

    I know just enough about long-term care insurance, frankly, to decide that I am going to avoid paying premiums for it.

    Most if not all of the ins-and-outs of long-term care insurance are layed out by Tara Siegel Bernard, "Your Money / Fine Print and Red Tape In Long-Term Care Policies" p. B1, col. 1 (New York Times Nat'l ed., "Business Day" Section, Saturday, June 8, 2013).  It can be profitable reading.

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$84,000 Attorney's Fees Award, $42,000 Breach of Insurance Contract.

   The case of Download Storfer v. Guarantee Trust LIfe Insurance Co. (S.D. Fla. Case No. 10.60400, Order Filed January 21, 2011) PUBLIC ACCESS, also published as 2011 WL 213461 (S.D. Fla. Order Filed January 21, 2011)(authorized password required to access Westlaw) presented issues surrounding a Plaintiff's Motion to Determine Attorneys' Fees Lodestar and Entitlement to a Multiplier.  This case involved questions of reasonable hourly rates for legal services in South Florida.  The Plaintiff was represented by Attorneys from South Florida and the Defendant's Counsel of record are from Atlanta, Georgia.

   This is an Insurance Coverage case.  The Plaintiff sued for Breach of Contract of a Long Term Care Insurance Policy.  Coverage was held to exist.  The Federal Court granted Plaintiff's Motion for Summary Judgment finding it undisputed, for example, that one "God's V.I.P." contracted to provide covered "custodial care" in an assisted living factility to Mr. Sheldon Storfer.  The Plaintiff is his wife and best friend, Mrs. Adele Storfer.

   The parties to the Insurance Coverage case stipulated that Damages were $42,000.00, "plus reasonable attorney's fees," in the event that Mrs. Storer prevailed.  Id. at *1.  After Mrs. Storfer prevailed, she presented her Motion to Determine Attorneys' Fees Lodestar and Entitlement to a Multiplier.

   The Federal Court held that her two Attorneys were entitled to two different hourly rates to determine an Attorneys' Fees Lodestar.  One had 25 years of legal experience, and the other 26.  Between them, the attorney "who has the record of being an expert in the area of log term care insurance litigation, thus justifying a higher rate" in this long term care insurance litigation, was held to a "reasonable hourly rate" in that case of $350.00 per hour.  The other attorney was held to a rate of $315.00 per hour.  Their Paralegal was held to a rate of $100.00 per hour.  Id. at *2 - *3, *5.

   Further, the Federal Court applied a multiplier of 1.5 in this case.  Id. at *5.  The net result was an Attorneys' Fees Award of $83,781.00.  Id. at *6.  Parenthetically, this amount is about $19,000.00 less than the amount originally sought by the Plaintiff as her opening demand for her Attorneys' Fees Award.

   It is also almost twice the amount of Mrs. Storfer's Insurance recovery.  This case is a recent example of a long-standing truth:  The amount of an Insurance recovery does not necessarily bear an exact relationship to the amount of an Attorneys' Fees Award in Court when the Insured has to hire Legal Counsel to represent her in a contested case which, like the Storfer case, "could only have been brought on a contingent basis," and where "success at the outset ... was approximately even".  See id. at *6.

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Beginning to Learn and Counsel About Long-Term Care Insurance.

       Happy Fourth of July!

    Here are some resources which offer potential value to those of us that counsel concerning Insurance Coverage and other Insurance issues, and to our clients.

    Counseling clients about Long-Term Care Insurance, or any other form of Insurance Coverage, can involve a large learning curve.  A good starting point is with this informative newspaper article by Walecia Konrad, "Patient Money/Getting Insurance For One's Frailest Years" p. B6, col. 1 (New York Times Nat'l ed., "Personal Business" Section, Saturday, June 27, 2009).

    A potentially helpful resource noted in the linked article is the Federal Web Site www.longtermcare.gov.

    Another potentially helpful link is to the web site of the National Association of Insurance Commissioners at www.naic.org, where you can download and counsel others to download as well, a free booklet, "A Shopper's Guide to Long-Term Care Insurance".  While on that site, you and your clients can learn about "Long-Term Care Insurance, What You Should Know".

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Premiums Rise for Long-Term Insurance.

    John Hancock is reportedly joining Genworth in seeking Premium Rate Increases for some existing Long-Term Insurance Policies.  Kimberly Lankford, Kiplinger's Personal Finance, published as "Long-Term-Care Insurance Rates Are Set to Increase" at washingtonpost.com, Sunday, August 17, 2008.  Where the companies have filed their Rate Increase Requests is not reported in the linked newspaper article.

    For John Hancock, apparently this raise in rates for Long-Term Insurance is a first.  Recommendations and suggestions are provided in the linked newspaper report, including if you currently hold a Long-Term Insurance Policy you may wish to hold on to it regardless of Premium Rate Increases, because new Policyholders face higher Premiums anyway; switching Long-Term Insurance Companies at this time is not a very attractive option.

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"Review Insurance Policies Now" Says Orlando Newspaper.

   Good advice with related links in this newspaper article published in the Orlando Sentinel, February 22, 2008, by Greg Groeller, "Review Insurance Policies Now".  Every Policyholder and their Agents and Brokers holding every kind of Insurance Policy can benefit from following the good advice published by this linked newspaper article.

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Elder Law and Insurance Contracts.

 The law protects people who are at the beginning of life, in special ways.  In many situations, minors cannot make enforceable contracts.  The law protects them from their own vulnerability to other people who might prey, and those who would not affirmatively hurt children but who nonetheless would not lift a hand or a voice to shield them from their own folly such as entering into an agreement that does not really benefit them but benefits some other party that wants to enforce it.

     It is a concept worth the attention of the law, whether people who are at the ending of life should similarly be protected, in special ways.  In many situations, for their own good, elders should not be making enforceable contracts.  Should the law protect elders from their own vulnerability to other people who might prey?  From their vulnerability to those who would not affirmatively hurt elderly people, but who would nonetheless not lift a hand or a voice to shield them from entering into a harmful agreement that would benefit instead only some other contracting party that seeks to enforce it?

     The current president of the American Council of Life Insurers makes the point that if the law goes the length of incapacitating everyone over the age of 65, then elders will face obstacles in "buying homes or cars or country club memberships or insurance policies."  (Mr. Frank Keating, quoted by Charles Duhigg in "Fine Line:  Shielding Elders' Money, and Independence" p. A1, col. 1 (New York Times Nat'l Ed., Monday, December 24, 2007).  On this Christmas Eve, or at any other time in the rolling Year for that matter, it does not seem as important in the great scheme of things that elders might then have trouble buying country club memberships, as compared to the very real concerns that can arise when elders buy homes or cars or insurance policies.

     However, there is a spectrum of remedies available to consider, and declaring people automatically incapacitated at any age is at an extreme.  Somewhere along the way, the willingness of responsible adults to guarantee performance and to review benefits and obligations, as is the case in many situations with minors, is without doubt worth the attention of the law where elders are concerned.  The linked newspaper article, above, explores the situations faced by elders at which the law ought to look and in which, having looked, the law might decide to take a hand.

    Happy Holidays To All!

When is Living Long, Living Well?

     What is "long-term insurance," and is it right for your Mom or Dad -- or for you?  Take a step toward reviewing some available information by Jonathan Peterson, "Long-Term Insurance:  Worth Its Weight?/The Policies Work for Many, But Consumers Should Read the Fine Print.  And Premium Hikes Can Be Shocking." (Los Angeles Times.com, Sunday, November 4, 2007).

Postscript of Sunday, November 11, 2007:
Take another step toward reviewing similar available information by Michelle Singletary, "Take a Long Look at Nursing Care Insurance" (Published Online on Sunday, November 11, 2007 by the Boston Globe at www.boston.com/business/personalfinance).
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