Insurance Claims And Issues

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.

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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 ......

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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).

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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).

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"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.

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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.

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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.

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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).

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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).

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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.

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