Insurance Issues

             When dealing with insurance companies, it is important to understand a few of their secrets so that you can get the settlement you deserve: 

• Insurers make money in part by denying you benefits. They may try to discourage you from seeking medical treatment (especially from chiropractors), or they may tell you that rental car coverage is limited to a set number of days. In most cases, this is not true, and, if you are not at fault, you are entitled to have all of your reasonable damages and expenses covered.

• Insurance companies track every claim you make. When dealing with an insurance company, assume that it knows the history of every claim you have ever made, even if a claim was with a different company. 

• The adjustor is not your friend. Despite his protests, he is not there to help you—he is there to reduce the insurance company’s payment as much as possible. You are also not required to give an adjustor a recorded statement or a medical authorization. If you feel you are not being treated fairly, it may be time to get an attorney involved.

I’ve written a number of posts on insurance subrogation and how our government is protecting the insurance companies at the expense of innocent victims.  The tragedy of insurance subrogation is that if a person is injured as a result of the negligence of another person (such as through an auto accident or medical malpractice) and the victim brings suit against the person who caused the injury, then the victim’s health insurance company sweeps in to snatch up the money received from any settlement or verdict.  If the health insurance company falls under the Federal Government’s definition of an ERISA plan (which most do), Federal law says that the health insurance company is entitled to a full reimbursement of any money that it paid out for the victim’s medical treatment — Even if this means that the victim is left with nothing.  Of course, the health insurance company does not pay the victim back for the thousands of dollars that the victim paid the health insurance company in premiums!  The link below is for a news video detailing a case in which a widower was the victim of ERISA subrogation.  The news story gives an excellent portrayal of how insurance subrogation applies to the detriment of innocent victims.  I highly recommend this video:

 News Cast on ERISA Subrogation Victim

I frequently have potential clients who contact me with questions about who is responsible for their medical bills following a car wreck.  These individuals are often under the impression that they should not use their Health Insurance to cover medical bills for treatment of the injuries that were caused by the automobile accident.  They also frequently believe that the at fault driver’s Automobile Insurance will pay for their medical bills directly.  Unfortunately, it is extremely rare (in fact, almost unheard of) for the at fault driver’s Auto Insurance Company to pay for the injured person’s medical bills directly or quickly reimburse the injury victim for these expenses.

Auto Insurance Companies are in business to make money and, as a result, their objective is to pay injury victims as little as possible for their injuries.  Unfortunately, most Insurance Companies will not reimburse an injured person for medical expenses until the injured person has fully completed all of his or her medical treatment and has agreed upon a settlement amount to cover ALL of the injured person’s losses due to the injury (such as lost wages, medical expenses, and any future lost wages).  This approach creates a tremendous problem for people who do not have Health Insurance.  Often the individual cannot afford the necessary health care.  The Insurance Companies see this as a great windfall for them, because if the injury victim cannot afford to get the necessary health care, then the Insurance Company does not have to repay the injury victim for those medical expenses!  It is a terrible scam that Insurance Companies use to take advantage of innocent victims, but unfortunately in Texas it is legal.

After an auto accident, treatment of your injuries should be your number one priority.  If you have Health Insurance, by all means use it!  If you do not have Health Insurance, there are other options that you can explore.  First, you should check to determine whether you have Personal Injury Protection (PIP) under your own Automobile Insurance.  This type of coverage is intended to be more accessable and can be used to cover the costs of your medical care.  Some health care providers will bill directly against your Personal Injury Protection policy, although it is advisable to speak with an attorney before giving your medical providers your PIP policy information.  PIP policies typically provide between $2,500 and $10,000 in coverage (with $2,500 being the most common), which frequently is not enough in the event of a serious injury.  If you do not have Health Insurance or Personal Injury Protection, it is advisable to contact an attorney to discuss other possible options.  Some health care providers will accept a Letter of Protection from your attorney, which essentially is a promise to the health care provider that you will pay the health care provider for your medical expenses when your injury case is resolved.

If you are injured in an accident and you use your Health Insurance to cover your medical expenses, you can expect your Health Insurance Company to later contact you by mail, asking if your medical treatments are the result of an injury.  This is the first step that Health Insurance Companies take toward asserting their right to subrogation. (Subrogation is an issue that is discussed further in other posts.)  If you receive a letter from your Health Insurance Company asking if you have been injured in a car accident or other type of accident, contact your attorney for advice before making any response.  Do not perceive this as a reason to avoid using your Health Insurance to cover the expense of your medical treatments . . . as I said before, your medical care is priority one after a car wreck or any other type of accident and using your Health Insurance is the best way to make certain that your medical treatment is not delayed. 

Can you believe it?!  Allstate has announced it’s intention to raise the rates charged to its policyholders despite Insurance Commissioner Mike Geeslin’s rejection of Allstate’s 5.9% rate hike earlier this week.  Beginning today, every homeowner insured by Allstate will see at least a 5.9% increase when they renew their homeowner’s policy.  Policy holders living along the coastline will see even steeper increases.  This comes amid national media attention about Allstate’s abusive claims handling practices and after years of overcharges by the insurance industry in Texas.

The greedy insurance companies just can’t seem to give it a rest.  After reporting one of its most profitable years of the decade, Allstate announced plans this past June to increase its rates for Texas Homeowners by 6.9%.  Thankfully, that rate increase was rejected by the Texas Department of Insurance.  Then, just weeks later, Allstate volleyed back by announcing it’s intent to raise Texas Homeowner rates by 5.9%.  — And they call them the “good hands people” . . . maybe for picking your pockets! 

Thanks to public outcry from Texas citizens and pressure from Texas Watch activists,  Insurance Commissioner Mike Geeslin recently rejected Allstate’s proposed 5.9% rate increase.  The commissioner also ordered the company to submit any further rate changes to the Texas Department of Insurance before they could take effect.  This is good news for Texans . . . but I’m sure the battle isn’t over.  It doesn’t take a crystal ball to see a 4.9% proposed rate increase in Allstate’s near future.  Help keep the pressure on by contacting Mike Geeslin and letting him know where you stand on this issue.  The above link makes contacting Insurance Commissioner Mike Geeslin quick and easy, giving you a voice on this issue while taking only a few seconds of your time!

A Comprehensive Loss Underwriting Exchange (CLUE) report contains information on insurance claims that you have made, as well as the loss history for a particular property, such as your home or car.  This allows the insurance companies to not only find out what claims you have filed in the past, but also identify claims that may have been filed by the previous owner of your home — claims that you may not even know about!

Insurance companies use CLUE reports much like credit reports when setting your insurance rates or determining whether to even offer coverage.  Information gathered from your CLUE report may also be used by the insurance companies as a weapon against injury victims — they do this by asserting that the victim’s injury is related to a previous accident or injury (which the insurance company discovered from the injury victim’s CLUE report).

 Just as it is important to review your credit report for errors, it is also important to check your CLUE report.  Finding out what the insurance companies are reporting and accessing on your CLUE report can bring you one step closer to evening the playing field when you are pursuing a claim for injuries or shopping for insurance.