Insurance Lawyer Blog

Our San Francisco insurance attorneys are always interested in developments in insurance laws around the country and in particular as they affect California. This week California Congressman John Garamendi introduced H.R. 4020 into the House of Representatives, called the Flood Insurance Farmers Act of 2012. The bill addresses the cost of insurance for farmers who grow crops and livestock on floodplains.

Many existing levees that protect agricultural land have recently been downgraded by a study of the Army Corps of Engineers and the Federal Emergency Management Agency (FEMA). Large amounts of US farmland are being designated as flood areas if the levees in those areas are not found to give 100 year protection. This would require property owners in these areas to purchase flood insurance, pay higher rates, and all new construction or improvements would have to meet stricter building requirements. In many of these areas, flood insurance is not available and farmers would not be able to improve or build new agricultural structures necessary to support or grow their business.

FEMA determined that California is the first state to have its floodplains and levees studied and mapped. Some affected California farmers are saying these restrictions on floodplains could make now productive agricultural communities disappear. The first new designations and maps released by FEMA put almost all of Sutter County in a “Special Flood Hazard Area.” Rural residents there say the level of flood insurance and certification required now is cost prohibitive and unattainable for most farmers. It could shut them down. They will be prohibited from making improvements worth more than 50 percent of the structure’s value. And anyone with a federally backed mortgage will automatically be required to purchase flood insurance, which will increase insurance costs for that property by four to six percent.

The bill introduced by Congressman Garamendi, who was California’s Insurance Commissioner from 1991 to 1995 and is also a lifelong rancher, proposes insurance subsidies for farmers in these areas, a study of the costs of insurance in these areas, (particularly in California where large premiums are required but little is paid out in return) and a provision to make sure flood insurance is available to property owners in these areas.

Congressman Garamendi notes that Californian farmers are particularly affected by the recent downgrades. He states that it has placed huge portions of California’s agricultural land at a disadvantage. The Congressman also notes that many of the levees in question have never been breached, and some have been in place for more than 100 years. He also notes that California is a net donor to the rest of the nation on flood insurance, because Californians have received only a 20 percent payoff from the floods that have occurred in California.

The Flood Insurance Farmers Act seems to have fairly wide bi-partisan support in the House, but it still has to go through the process and determinations must be made about the cost of the insurance and actuarial implications. Our California insurance lawyer knows this is a serious concern for many rural Californians, and we will be watching to see how the bill progresses.

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Help for California Homeowner’s Insurance Consumers

California Flood Made Worse By Tricky Insurance Companies

A story caught our eye this week that is the definition of shameful. Imagine our seniors, our parents and grandparents, being scammed out of benefits from long-term care insurance. Taking money from the elderly and infirm and denying them when they need the help they diligently paid for over the years. As San Francisco insurance attorneys we saw that Consumer Watchdog filed a class action lawsuit with the San Bernardino Superior Court earlier this week against the Senior Health Insurance Company of Pennsylvania (SHIP) including these allegations.

Long-term insurance claims typically involve in-home care services, mostly for caregivers that help elderly or infirm policyholders with tasks like bathing, dressing, eating, and chores around the house. The lawsuit alleges that SHIP told policyholders that in-home caregivers must be licensed, when that is not the case. SHIP also allegedly forced policyholders to produce extensive documentation and to undergo unnecessary medical exams by SHIP employed doctors. The documentation requirements were often absurd—requiring multiple forms with the same information, medical records, proof of caregiver certification, and detailed caregiver notes. The founder of Consumer Watchdog, Harvey Rosenfield, said that SHIP takes the senior’s premiums, but when a claim comes in, they inundate the policyholder with confusing correspondence, fake requirements, and endless demands for irrelevant information.

The lawsuit is on behalf of Dr. William Hall and other elderly victims of this bad faith insurance abuse. Dr. Hall is an 87 year old California resident and former US Army colonel—a wounded veteran from the Korean War. He is also the former Chief of Medicine at a California hospital. His son Eric said that Dr. Hall bought the SHIP long-term care policy to spare his family the expense of this type of care. Eric Hall says that because of SHIP the family has spent more money and more time on Dr. Hall’s care than if he had never bought the policy. Dr. Hall bought his long-term care policy in 1994 and paid premiums for sixteen years. When he needed care, SHIP delayed his benefits for eight months and then only provided him with 20 percent of the benefits to which he was entitled. Because of that, he has spent tens of thousands of dollars for caregivers, exhausting his personal resources. Dr. Hall has had to turn to his children for care, which is exactly what he was trying avoid when he purchased the insurance policy in ’94.

The suit asks for these bad practices to stop—the inundated correspondence, requests for unnecessary documentation and medical records, lengthy delays when responding to claims. The suit also requests that the company make the process more transparent and clear for policyholders to understand what their policy covers. It also seeks that policyholders be able to use their own doctor to determine their eligibility for benefits. Dr. Hall personally is also seeking damages for breach of contract, elder abuse and fraudulent business practices.

Our San Francisco bad faith insurance lawyers understand the plight of these affected California seniors. It is truly horrible that SHIP has treated their vulnerable customers in such a manner, especially when they are already frail and in need of care. An insurance lawsuit is often the only way to really make a big insurance company take notice and change its policies, as well as an opportunity for wronged consumers to get the money they deserve.

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$54 million Recovered for California Insurance Consumers in 2011

Blue Shield Settles Rescission Lawsuit

This week California joined six other states—Florida, Illinois, New Hampshire, North Dakota, Pennsylvania, and New Jersey—in signing a settlement with Prudential Insurance Co. of America, the country’s second largest life insurer. The settlement requires that the insurance company use enhanced researched techniques to find the beneficiaries of California life insurance policies where the dead policyholder’s benefits were never claimed. California Insurance Commissioner Dave Jones said that this is to ensure that when a life insurance holder dies, the intended beneficiaries get the owed benefits. A Prudential spokesperson asserted Prudential was not accused of any wrongdoing and that Prudential is happy to work with industry regulators on best practices and standards and is pleased to get out in front of the industry on this issue.

The agreement includes an expanded use of matching criteria when Prudential uses Social Security’s master list of deceased people (the so-called “Death Master” file) and the use of computer programs to find deaths that might have been overlooked in the past. This will help Prudential discover in a more timely fashion when a policyholder has died and ensure that policies do not go unpaid for years. If a Prudential policyholder dies, the agreement requires the company to conduct a thorough search for beneficiaries, using both their records and online search and locator tools. If no beneficiary can be located, Prudential is to turn over the proceeds from the policy to the state as required under California’s unclaimed property laws. Additionally, the settlement includes a $17 million payout by Prudential, which will be used to monitor compliance. California’s share has not been determined yet, but it is expected to exceed $1 million.

There is also a parallel agreement that Prudential reached with twenty states last month, with the company agreeing to review policies active between 1992 and 2010 and pay the beneficiaries it locates. Prudential told the Securities and Exchange Commission in a filing that it put aside $139 million for this task.

This most recent agreement requires twenty states to sign on before it becomes official, so thirteen more states need to sign on. The deadline is March 31, 2012 for the state to be eligible to receive part of the $17 million payout. Prudential is the first of half a dozen insurance companies that these seven states, including California, are targeting. Mr. Jones said he hopes that this Prudential settlement will pave the way for more productive negotiations and settlements with the other involved insurance companies.

Our San Francisco insurance claim lawyer knows that these targeted companies and negotiations stem from a three year audit by California State Controller John Chiang of life insurance companies. This turned up enough information to hold an investigative hearing last May on alleged delayed payouts of benefits by MetLife Inc.

San Francisco insurance attorneys realize that failure to search for beneficiaries has been a pervasive life insurance industry practice. After a loved one dies, there are often questions about whether the person had life insurance and how to deal with that. If you need legal help with that issue, there are experienced insurance lawyers in your area to help.

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$54 million Recovered for California Insurance Consumers in 2011

Good news for California Life and Disability Insurance Consumers

Our San Francisco insurance lawyer knows that far too many local community members have found themselves in the nightmare scenario of paying for insurance for years only to find out the benefits, for whatever reason, are not available when a disaster strikes. Often a consumer finds out he or she does not have sufficient coverage or that there is an exemption in their insurance policy for something only when the damage is already done. And insurance companies are frequently guilty of confusing business practices, i.e. hiding an exemption in tiny print or legalistic language, or outright intimidation of uninformed consumers.

Fortunately, new rules are in effect now to help California homeowner’s insurance consumers (http://www.brodfirm.com/lawyer-attorney-1844610.html) avoid these kinds of nightmarish scenarios. The California Department of Insurance has put in place the new rules to help homeowners be more informed about their policies and keep consumers from being underinsured. Insurance agents and brokers do not have to help consumers come up with a coverage figure, but under the new rules, if they do, the number must be based in reality. The brokers and agents cannot make up a number or give you a random estimate. If the broker or agent gives a homeowner a figure of how much coverage protection they need for their home, that figure must be made on a concrete calculation. In addition and in conjunction with this, the agents and brokers are required to have specific and ongoing training to teach them to do these calculations.

Some insurance brokers and agents have already been doing this voluntarily, but the insurance companies are not happy with these new rules mandating this procedure if a coverage amount is given to a consumer. Naturally, insurance companies do not want to be responsible for telling consumers what coverage is needed. The current system works to the companies’ advantage and helps their bottom line—which is to make more and more money for their coffers, not to assist consumers in times of trouble if they can avoid it. The companies are so concerned with these new rules that law suits have been filed to overturn the rules, but so far the rules are still in effect.

Our San Francisco insurance attorneys often remind consumers that California has other protections for homeowners’ insurance consumers, as well. Insurance brokers’ fees must be fully disclosed and agreed to by the consumer up front and brokers are not permitted to be an agent of the company providing the insurance coverage. Homeowner’s insurance companies are only officially allowed to cancel coverage for nonpayment of premiums, fraud, material misrepresentations or physical changes to the property that make hazardous accidents more likely. Insurance companies are also limited in the rates they charge. Each company calculates rates based factors such as location, choice of deductibles, local fire protection, and the age and condition of the home. Once determined, these rates are subject to approval by the Department of Insurance, which seeks to ensure that rates are competitive and fair.

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California Flood Made Worse By Tricky Insurance Companies

California Insurance Law Fraud Basics

Recently California’s 6th Court of Appeals ruled that when a car is sold, the previous insurance is released from liability even if all of the DMV documents have not been transferred yet. Our San Francisco insurance attorneys think auto insurance consumers should be aware of this important recent ruling when buying a new car and deciding what to do about insuring a new car- the timing could be critical.

This recent case, Thiel v. Mercury General Corporation. (http://www.leagle.com/xmlResult.aspx?xmldoc=In%20CACO%2020111227042.xml&docbase=CSLWAR3-2007-CURR), turns on the specific timing and facts as to when ownership of the car was transferred and therefore when the insurance policy ceased to cover the car. Daniel Thiel bought a 2001 BMW from the Benfords in 2008. He paid for the car both with cash and a check. He was told when his check cleared the Benfords would send him the car title. However, before any paperwork could be finalized, an uninsured drunk driver struck Mr. Thiel as he was driving his new car home the very day he bought it. Mr. Thiel was not at fault for the accident and suffered head, chest and leg injuries, requiring two surgeries on his leg and physical therapy.

Mr. Thiel was also uninsured at the time, perhaps simply because had not made insurance arrangements for the car he bought just that day. Regardless, he filed a claim with Mercury Insurance, which had insured the car under the Benfords, but his claim was rejected because the Benfords filed an online Notice of Transfer and Release of Liability with the local DMV the day after the accident and therefore the coverage was terminated.

Mr. Thiel filed a lawsuit against Mercury and claimed, among other things, insurance bad faith. He cited a California statute stating that in order to be a “bona fide sale” and avoid liability when a car is delivered to the buyer, the seller must also either endorse and give the certificate of ownership or deliver the transfer and release of liability documentation to the DMV. Mr. Thiel said he had not received title and the paperwork had not been filed with the DMV at the time of the accident. The appellate court held that a bona fide sale occurred through the nature of the agreement between the buyer and seller which is not disturbed by mere paperwork delays. The court stated that by filing the online Notice within five days of the sale, the Benfords were released of all liability after the sale date, making the fact that the accident took place prior to the filing of the Notice irrelevant.

While this case has a specific fact pattern that lead to Mr. Thiel’s unfortunate dilemma, there are lessons for California auto insurance consumers. San Francisco Insurance lawyers know that auto insurance, like all insurance, can be tricky for consumers to understand. There are seemingly an endless array of clauses and particularities of when something is covered and when it is not. Perhaps when you buy a new car, you do not think of getting insurance ahead of time. Or maybe you are unaware of what happens to your previous insurance when you buy or sell a car. As always, the important thing is to know about your policy and understand the basics of the insurance laws before a problem arises. Anytime you have concerns about insurance issues, be sure to contact a San Francisco insurance lawyer to get experienced help.

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$54 million Recovered for California Insurance Consumers in 2011

California Insurance Law Fraud Basics

Good news for those interested in the fight to keep the insurance industry fair and honest in California. Commissioner Dave Jones announced on Tuesday that California’s Department of Insurance (CDI) recovered $54 million for consumers in 2011.

The Department has two branches, one to deal with consumer complaints and the other to investigate insurance companies through a thorough examination process (see further discussion of CDI here. The Consumer Services branch runs a consumer hotline that receives about 200,000 calls annually, as well as bureaus on health claims, claims services, and rating and underwriting services. Our San Francisco insurance lawyer was happy to read that the Consumer Services branch recovered over $49 million last year through investigations of the complaints filed. The other division, the Market Conduct Branch, which includes a field claims bureau and a field rating and underwriting bureau, ran 114 examinations of insurance companies last year and recovered an additional $5 million for California insurance consumers. Commissioner Jones stated that protecting consumers is the Department’s top priority and that, “Our consumer complaint services and market conduct exams are important tools that we employ to respond to the needs of consumers and proactively go after any activities that pose a threat to policyholders."

The 2011 numbers are actually down from 2010, when the Department of Insurance recovered $63.8 million for consumers. And the Department recovered $89.1 million in 2009, but that number was higher because the Department was still processing the high volume of claims after California’s devastating 2007-08 wildfires. These high recovery numbers year after year show that the Department of Insurance is needed to be a watchdog for nefarious insurance companies trying to use inappropriate tactics against honest, paying consumers.

Those of us who practice California insurance law should not be surprised by the size of the annual recovery numbers. It is common knowledge that some insurance companies act out of greed and for the sake of profits, trying every means available to pay out as little as possible to the policyholder. The Department of Insurance’s hotline is a good starting point if you are unhappy or feel cheated by your insurance provider, as CDI is tasked with things like ensuring consumers are being treated fairly and imposing penalties for legal violations. The number for the consumer hotline is 1-800-927-HELP (4357), and you can file a formal complaint.

But when the Department gets your complaint, it contacts your insurance company and informs them of the complaint and also asks for the company’s version of the event or issue. The Department does not adjudicate a dispute. The goal of the complaint process is more to find patterns from complaints and when there is a clear instance of an insurance company repeatedly acting in a certain inappropriate or illegal way. If you are in a dispute with your insurance company in our area to receive the benefits or damages that you deserve you might need personalized legal assistance from a qualified San Francisco insurance attorney.

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Blue Shield Settles Rescission Lawsuit

California Insurance Law Fraud Basics

Among the new laws passed in 2011 is a new California insurance law, SB 946, which aims to complement existing law that requires equal coverage of mental health conditions and medical conditions. The Mental Health Parity Law and a settlement agreement reached by insurance companies and the California Department of Managed Health Care provide for insurance coverage of mental health conditions, including the full spectrum of autism. Insurance companies must provide equal mental health coverage and maximum lifetime benefits at the same rates as medical coverage.

Existing regulations required that all treatment be provided by licensed professionals, such as psychologists, registered nurses, and social workers. However, this language excluded certified providers of “applied behavior analysis” (ABA,) a prevalent strategy meant to improve behavior and quality of life for families with autistic children. The distinction between a licensed profession and a certified one is made by how the profession is regulated. Licensed professions are regulated by the state while certified professions are regulated by non-governmental entities.

The new law has a great impact on families with autistic children attempting to obtain health insurance and make claims to pay for behavioral treatments. It requires insurance companies to cover mental health treatment such as applied behavior analysis as long as it is prescribed by a licensed professional. The mental health treatment itself may be carried out by professionals who are not regulated specifically by the State of California.

The California Association of Health Plans opposed the bill, stating an industry study that the bill would effectively raise insurance costs by $850 million. A similar study carried out by the California Health Review found that it would raise insurance costs by about $93 million and lower the costs of special education and social services, paid for by the taxpayer, by about $140 million.

Families affected by the bill should take some exceptions to coverage into consideration. Insurance plans provided by federal and state governments, such as ERISA, CalPERS, Medicare, and Medi-Cal, are excluded from the law’s requirements. Those plans have their own requirements regarding mental healthcare. Also, plans that are considered “self-funded” or paid for by an employer who did not purchase a fully funded plan from a third party are excepted from the bill’s regulations. It is difficult for insured employees to tell the difference and should call their employer’s human resources department to inquire.

Moreover, the bill is effective July 1, 2012, but it sunsets on July 1, 2014 only two years later. The federal healthcare plan is set to take effect at that time and SB 946 will have to be re-evaluated to comply with federal law. Therefore, families should look closely for deadlines and news updates to determine future pay outs for mental healthcare. In the meantime, Autism Speaks, a prominent autism advocacy organization, recommends that persons harmed by insurance companies violating this or other insurance laws contact an attorney to see if legal action is appropriate.

Besides the laws already mentioned, insurance companies doing business in California must adhere to the California Insurance Code. Insurance companies may not engage in tactics meant to delay payment or offer to pay out low amounts on claims in bad faith. Additionally, they must communicate promptly with the insured regarding their claims. The insurance company must tell you why they denied your claim.

Continue reading "New California Insurance Law Seeks to Broaden Parameters of Insurance Coverage for Autism" »

An annual California Employer Health Benefits Survey came out this week with bleak news for California insurance consumers. It polled 770 benefit managers at private companies in the state from July to October 2011. The bottom line of the survey was that fewer companies offered health insurance in 2011 and those that did charged more for it. Those of us who practice insurance law in California are naturally concerned about these newly released statistics and what further impact the numbers could have as the health insurance market feels pressure from the economic downturn.

In California, 63 percent of workers have employer-sponsored health insurance, down from 73 percent two years ago. And premiums for these health plans rose by an astonishing 153.5 percent since 2002, more than five times California’s inflation rate for the same period. About 25 percent of employers either reduced benefits or raised costs on employees in 2011. A large part of this is due to the economic downturn of the last few years coupled with steadily rising costs. And there is no end to this trend in 2012 as 36 percent of California employers stated they are either somewhat or very likely to increase the amount employees pay this year. This upward trend in costs has been present for several decades, but the dramatic upturn in the numbers in this most recent survey are still striking even to experienced San Francisco insurance lawyers.

The numbers are especially alarming considering consumers are getting fewer benefits for their money, as well. The insurance benefits decreased at the same time as co-pays, deductibles, and premiums rose dramatically in cost for the employee-consumers. And employers are paying more than average in California, as well. They contribute, on average, $5,000 per single employee and nearly $12,000 a year for family coverage.

With health insurance squeezed from all sides, Californians should take extra care in being aware of what benefits they are entitled to and informed about their health care policy and what choices they have. A San Francisco insurance attorney can help you understand your insurance and can be your most important resource if you are denied benefits from insurance companies trying to find even more ways to earn more money. As a representative of Consumer Watchdog, a non-profit, stated, the premiums have gone up five times more than inflation and the money is going somewhere. Even accounting for higher costs, the insurance companies’ greed is powerful. Insurance consumers need to be vigilant of their own interests, since the companies’ interest is profit, not your health.

Some of these spiraling costs should be ameliorated, according to industry expectations, in 2014 when the full implementation of President Obama’s healthcare law will go into effect. However, that is still two years away. Also, a measure in the California legislature to regulate health insurance rates failed last year, even though 35 other states have this ability. Remember for now that often being informed is your best option as a consumer in a difficult insurance market.

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Blue Shield Settles Rescission Lawsuit

Health insurance for Small Business Owners

As San Francisco insurance attorneys we were glad to see the latest news that Blue Shield of California and Blue Shield of California Life and Health Insurance Company, a major insurer, finally settled a multi-year lawsuit. It is encouraging to see even a small correction of a gross injustice done to the hardworking insurance consumers of California.

After three years of investigation, the lawsuit was filed in 2008 by then City Attorney Rocky Delgadillo on behalf of the city of Los Angeles, alleging that the insurance provider wrongly dropped policy holders after they became ill, duping consumers into buying insurance that would be rescinded, and other shady business practices. The city of Los Angeles was seeking $1 billion in damages and restitution. Blue Shield was accused of rescinding hundreds of policies of patients after they were hospitalized or required major medical procedures. The consumers had previously applied and were approved for insurance, only to be told once they needed health care benefits that they had made a mistake on their misleading or confusing application form, discovered from a retroactive investigation by the insurance company. Often these consumers had been paying for health insurance for years, only to find out at the critical moment that they paid for nothing. Thousands of cases were investigated. Since 2002, Blue Shield denied benefits to 850 people and delayed benefits to countless more.

A federal ban on these types of rescissions for unintentional mistakes on insurance applications went into effect in September 2010 because of the new healthcare legislation. Now Blue Shield has settled for $2 million, to be split between the city and Los Angeles County, and the company will also pay the legal costs of the lawsuit, but without admitting any fault in the matter.

Part of the settlement requires Blue Shield to submit a new and amended health insurance application form that complies with federal and California requirements in being intelligible to consumers. Blue Shield is limited on an application to asking for relevant, as in “reasonable and necessary”, medical information to calculate the risk of insurance benefits being requested. The settlement also bans Blue Shield from rescinding coverage unless it can prove that the policyholder committed fraud or misrepresented relevant health information on their insurance application. It also bans Blue Shield from giving insurance investigators commissions based on their number of rescissions.

The insurer’s spokesperson stated that Blue Shield settled the suit simply to avoid the costs and distractions of ongoing litigation. Blue Shield also claims it is committed to taking aggressive and proactive steps to provide better access to health care.

Even with this settlement, however, the individual policyholders who were wrongfully denied benefits did not gain any monetary restitution. The settlement may be good news overall, especially as a wake-up call to insurance companies that they must comply with federal legislation and behave in a fair and above-board manner with their customers. But for the many families struggling to cover medical expenses, it is perhaps cold comfort. This is why it is vital to speak to a California insurance lawyer if your insurance company is trying to give you the run around or to rescind your policy or benefits. In something that is so important to you and your family and the future, local families need an experienced San Francisco insurance attorney in your corner working specifically on your case.

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Health Insurance for Small Business Owners

California Insurance Law Fraud Basics

Our San Francisco insurance claim attorney know that there are many ways nature can cause problems in a state as big and diverse as ours. Last week this blog talked about a flood (see here). This week another act of nature caught our eye- wind and wind damage. In early December, hurricane force winds pummeled areas of Southern California and left hundreds of thousands without power. Estimates say the storms may have caused $40 million in damage. The Santa Ana winds toppled countless trees, especially in the hard-hit Pasadena area.

When Californians are faced with these weather emergencies, it is a good wake up call to the rest of us to ensure we are as prepared as we can be for natural disasters. People often have specific insurance coverage for earthquakes or for floods, but do you know how wind storm damage will be handled by your insurance companies?

Most homeowner’s insurance policies will include some coverage for wind damage, such as a tree falling on a house. "So long as that tree has damaged something on your house or property, your homeowner's policy will typically have some amount available for tree removal," said Candysse Miller, executive director of the Insurance Information Network of California to the Pasadena Star-News earlier this month. Other less visible kinds of damage can be more difficult to deal with. Insurance companies often try to claim things like damaged or loosened tiles or shingles on your roof due to high winds is actually caused by normal age/ wear and tear. Roof problems can lead to other expensive home issues, such as water leakage, if the roof is not properly repaired. Insurance companies may also try to claim that only some tiles or shingles need replacing, but before you agree to that make sure you know the true extent of the damage to your roof and do not accept a partial fix to a much bigger problem. You pay for your homeowner’s insurance and you deserve the full benefits you need.

More problems may arise with your car insurance. California Insurance Commissioner Dave Jones pointed out that physical damage is not always covered, and you have to choose to include it in your insurance policy. A comprehensive policy should cover damage from wind storms, while the minimum auto insurance required- liability insurance- will not.

Wind damage is fairly common and occurs in big storms all over the United States. It is important to know what exactly is covered under your insurance policies before a disaster happens, so you are informed about what you are paying for and what benefits you can expect. A San Francisco insurance lawyer can help go through your policies and make sure you have the coverage you need and can watch out for any fine print or hidden clauses that could affect your benefits.

Even being informed sometimes cannot protect you from unscrupulous insurance companies trying to deny benefits. When you are faced with substantial damage from a natural disaster, it is always a good idea to consider talking to a San Francisco insurance claim attorney. Insurance companies may be more willing to negotiate or settle claims if the claimant has an experienced attorney on their side.

In closing this week, everyone here at the Brod Law Firm wishes our clients and friends a happy and safe holiday season!

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California Flood Made Worse By Tricky Insurance Companies

California Insurance Law Fraud Basics

Our California insurance attorneys know how difficult it can be to deal with insurance companies after an unexpected disaster. When something happens that severely disrupts your life, like a major illness, death, or natural disaster, the last thing you want to think about- worry about- is dealing with an insurance company employee asking you all kinds of questions. But what is worse is when you realize that all the money you paid over the years to the insurance company is no guarantee that the benefits you expect will be available when you need them.

Our San Francisco insurance attorneys noticed one striking recent example in a CBS News story this week. It involves a California town called Capitola, the site of devastating floods earlier this year. In March, a drainpipe in Capitola burst after an average rain storm. The very next day a larger storm hit the area and Capitola was not only already dealing with a problem, but there was no pipe to drain the water anymore. For the residents of Capitola, California, their problems were just beginning.

Some residents had flood insurance, and they thought surely the hard earned money they paid to their insurance company would allow them to rebuild. But those residents discovered that when they called about their flood insurance, their insurance company told them that the situation did not count as a flood. The company claimed it was a broken pipe and directed the policyholders to their liability insurance. But they were then told by the liability insurance handlers that it was a flood, so the liability insurance does not cover the damage. This ridiculous dilemma caused not only many people to worry about their homes, but also severely affected small local businesses trying to stay afloat in a recession economy.

One insurer of a small gallery denied the claim because it stated that the damage was done by “surface water”, which is not covered under the policy. Of course, the reason there was surface water was the broken pipe and broken pipe damage should be covered. When the gallery tried to make this argument, the insurance company denied them again by claiming a clause that limits coverage 10 days before or after a flood, which is exactly when most of the damage occurs. This is just another example of insurance company trickery and using obscure clauses and fine print to cheat the policyholder out of benefits he or she has diligently paid for over the years.

For the residents of Capitola, it seems no rational argument will change the insurance companies’ minds. The only option many residents and small business owners are left with is to sue the companies to try to reclaim the damages owed to them. And Capitola residents are not alone. Situations like this with insurance companies occur all the time all across California and the United States. CBS News pointed out that if you find yourself in this type of insurance trouble, it is important to contact an insurance attorney for assistance. The Brod Firm could not agree more, and encourages anyone feeling tricked or abused by their insurance company in our area to talk to an experienced San Francisco insurance attorney without delay.

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California Insurance Law Fraud Basics

Helping Residents with California Insurance Law Issues

Our San Francisco insurance attorneys know how to deal with insurance companies who are wrongfully trying to deny consumer’s the benefits they paid for. We know how frightening it is to hear that an insurance claim is denied when you were counting on that money for critical expenses. But 2012 holds promise for a more fair insurance litigation environment when a company improperly denies a life insurance or disability claim thanks to a new law- California Insurance Code Section 10110.6. It is important to note this new law relates only to life insurance and disability insurance, and not other types of insurance. It was sponsored by Senator Ron Calderon with the support of California Insurance Commissioner Dave Jones, unanimously passed the Legislature and was signed by Governor Jerry Brown in October. A similar bill was vetoed by Governor Schwarzenegger in 2010.

As of January 1, insurance companies in California will no longer be able to reserve discretionary authority to the themselves to determine or interpret a policy and decide if a policyholder is entitled to benefits. It applies to all life and disability insurance policies that are issued, delivered, or renewed to a California resident starting in January. This gives discretion in these matters to judges, which is as it should be. Judges know the law and are impartial observers. It is common sense that it is unfair to have a party to the dispute- one who stands to earn money depending on the outcome- be the final arbitrator of that dispute. Insurance Commissioner Jones likened it to a “fox guarding a henhouse.” But that is exactly how these scenarios worked until the passing of this new law. Insurance companies used these discretionary clauses as a shield from liability for valid claims and therefore nullified bargained for benefits. Suing the insurance companies over inappropriately denied benefits was often useless. If the policy included a discretionary clause, the judge’s hands were tied and he or she had to assume the insurance companies acted correctly unless the policyholder could prove that the company’s denial of benefits was arbitrary or capricious. Even if a judge believed the policyholder should have received the denied benefits, unless the company was arbitrary or capricious the judge could offer no remedy to the policyholder, who was left disabled or grieving for a loved one often in dire financial straits.

As San Francisco insurance denial attorneys, we are thankful the new law addresses this obvious inequity and helps level the playing field for consumers. It stops the practice of biased insurance companies ignoring or overriding a doctor’s opinion about whether a policyholder qualifies for disability benefits based on their own greedy concerns for their profit margins.

Even with this new legal advancement, if you believe you were unfairly denied benefits by your insurance company you should contact an experienced San Francisco insurance lawyer in your area to discuss your case. These new laws and protections will not be useful to your situation if you do not have a legal representative in your corner to help you navigate the law and with the experience to see through insurance companies’ endless bag of tricks.

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California Insurance Law Fraud Basics

Helping Residents with California Insurance Law Issues