AMICUS PROJECT UPDATE
Judicial decisions define insurance consumers' rights and insurance companies' obligations, so they are critically important and have long-lasting impact. The purpose of UP's Amicus Project is to provide judges with a balanced perspective when they review cases involving insurance questions. Amicus briefs are the vehicle through which interested parties other than the parties in a case make points for reviewing judges to consider.
Insurers and their trade associations routinely deluge courts with briefs arguing their views. In the majority of cases, judges get no briefs at all that advance the perspective of insureds/insurance consumers. Predictably, the results often favor the insurance industry. UP is striving to change this imbalance through our Amicus Project.
The following are some of the recent activities of UP’s Amicus Project in California, New York, Massachusetts and Arizona.
CALIFORNIA
AICCO, Inc. v. INA
UP weighed in for policyholders before the California Court of Appeal in this case on the issue of whether an insurer can create a new offshore entity and transfer existing policies to that entity without their consent. Regulatory oversight, solvency protections and contract rights are all at issue. UP is being represented pro bono in the matter by Mark Chavez and Kim Card of the Mill Valley law firm of Chavez & Gertler. Chavez recently participated in oral argument in the case.
Patricia Patrick v. UNUM et al
UP submitted an amicus letter to the California Supreme Court requesting that it grant review in this case in light of the U.S. Supreme Court’s decision in Ward v. UNUM. This very important case involves ERISA preemption and whether insurers will be able to continue to misuse ERISA as a shield against immunity for bad faith practices in claims under employer-issued policies.
Blue Ridge v. Jacobsen
UP submitted an amicus letter to the California Supreme Court requesting that it sua sponte reconsider its decision to allow an insurer to recoup from its insured a settlement payment made to a third party over its insured’s objections.
ARIZONA
Carla Liristis et al v. American Family Mutual Ins. Co.
UP’s application to submit an amicus brief was granted by the Arizona Court of Appeals and a brief is being drafted and filed pro bono by the law firms of Treon, Strick, Lucia & Aguirre and Anderson, Kill & Olick, P.C. At issue is a trial court decision allowing an insurer to improperly apply an exclusion and deny coverage for remediating mold growths resulting from covered water damage under a homeowners policy. If allowed to stand, it would fundamentally alter the scope of protection afforded to Arizona policyholders, obliterate the contract rights of hundreds of thousands of policyholders, and result in a "staggering windfall of unearned profits" for insurers.
NEW YORK AND MASSACUSETTS
Berkshire/Guardian Merger
UP requested that New York and Massachusetts insurance regulators conduct a careful examination of the proposed pending merger between Berkshire Life Ins. Co. and the Guardian Life Ins. Co. to determine whether policyholders’ interests would be adequately protected, but the merger was approved in Massachusetts over our objections. Eugene Anderson of Anderson, Kill & Olick, P.C. represented UP in this matter pro bono.
We are increasingly serving as the voice for policyholders in cases all over the country where the rights of insureds are at stake. Unlike insurance companies, however, we do not have unlimited resources to pay attorneys to submit our amicus briefs. UP's Amicus Project is growing because of the generosity of a very small number of attorneys who are providing legal services free of charge. We need your help. We need to expand our base of pro bono counsel, and secure donations to cover our expenses. All policyholders benefit from this Project. All policyholders should support this Project.
October 2001: Ten Years Since Firestorm,
United Policyholders a Decade Old
United Policyholders, the North Hills Phoenix Association, the cities of Oakland and Berkeley, the University of California and other educational institutions are planning special events to commemorate the tenth anniversary of the 1991 Oakland/Berkeley hills firestorm. See page 2 for some of the planned activities.
UP Launches Website
We are proud to announce that www.unitedpolicyholders.org is up and running. The site features practical information such as Claim Tips on getting fair settlements, UP’s recent newsletters, information about our Amicus Project, and an easy-to-use online donation form.
Read our new Flood Claim Tips, co-authored by Joel Gumbiner, Esq. of the Walnut Creek policyholder law firm of Gumbiner & Eskridge, www.insuredlaw.com, and new Disability Claim Tips authored by Alice Wolfson, Esq. of the San Francisco policyholder law firm of Bourhis & Wolfson, www.bourhis-wolfson.com, policyholder Katherine Sanchez and UP staff. UP thanks all authors for their volunteer services.
Creation of the site was made possible by grants from the consumer rights law firm of Lieff Cabraser Heimann & Bernstein, LLP, www.lieffcabraser.com, and the California Consumer Protection Foundation. Content was primarily authored by Executive Director Amy Bach. The site was created by David Deutsch of Creative Resources, www.creares.com. Legal Services were provided pro bono by Frank Gilbert, Esq. of the San Francisco business law firm of Schwartz & Cera, www.schwartz-cera.com.
Policyholder Protection Act Advances in California
A Policyholder Protection Act passed the California State Senate and is awaiting a hearing in the Assembly. SB 658, carried by Senator Martha Escutia, (D-Montelbello), contains seven key provisions to strengthen policyholder protections during the claims process. It requires insurers to inform insureds about their rights and the status of their claims. It requires insurers to provide insureds with copies of documents from their claim file. It establishes basic due process rights for insureds who are subjected to examinations under oath by insurers, and it allows insureds and insurers to decline requests for appraisal. Insurance industry lobbyists are doing their best to kill or neuter the bill.
Escutia is a strong ally of consumers and was the author of the new law that requires the California Department of Insurance to publish Market Conduct Exam reports on insurer’s claims practices. The law resulted from revelations of widespread bad faith by insurers after the 1994 Northridge Earthquake, cover-ups and deals by former Commissioner Quackenbush.
UP Co-founder Amy Bach is a principal drafter and proponent of the Policyholder Protection Act in her role as a consultant to Senator Escutia’s Subcommittee on Bad Faith Liability and Consumer Rights. Oakland firestorm survivors Betty Ann Bruno and Peter Dempsey, veterans of the 1994 Homeowners Bill of Rights campaign have re-enlisted and provided strong testimony in support of the bill at a recent hearing before the Senate Insurance Committee, which is chaired by Senator Jackie Speier (D-San Francisco/San Mateo). SB 658 contains many of the provisions that were in the 1994 bill, which was titled the "Homeowners Bill of Rights." Former Senator Art Torres carried the bill in 1994 and it passed both houses but was vetoed by then-Governor Pete Wilson.
UP and Firestorm Ten Year Anniversary Events
Thursday, October 18th
United Policyholders Reconnect Event
and 10th Birthday Party
Save the date! In addition to bringing people together, the event will be a fundraiser for UP's "Ambassador" program to send delegations and materials to communities that have experienced catastrophic events. It is based on UP's "buddy" program that linked hill area survivors with Point Reyes fire victims and on the delegation that traveled to New Mexico last year to support survivors of the Los Alamos fires.
Sunday, October 21
Siren/Bell Ringing Awareness Campaign
UP is working with the fire departments of Oakland and Berkeley to have sirens sounded simultaneously on the morn of October 21st as part of an education campaign for citizens to be vigilant in all aspects of preparedness.
Memorial 1 pm
Oakland is planning a memorial at the Rockridge Bart Station at the Fire Tile Wall to commemorate the 25 who died, the survivors and all the helpers including fire, police, public works, organizations and individuals.
Memorial Walk 5:30 pm
The North Hills Phoenix Association is planning a return of the Memorial Walk that was done to commemorate the first five anniversaries of the firestorm. A potluck dinner follows the walk on Grizzly Peak.
Un/Underinsured Motorist Coverage…Do You Have Enough?
by Shannon Haworth, Independent Insurance Agent, Martinez, CA
Most people are familiar with the concept behind Uninsured Motorist coverage in their personal auto policy. If you are involved in an accident where an Uninsured Motorist is found to be at fault, you may make a claim under Uninsured Motorist, ("UM"), coverage for your injuries. In that case, the amount of Uninsured Motorist coverage that you have, as little as $15,000/person and $30,000/accident, is the most that you could recover for your injuries. However, what happens when the at fault party does have insurance, but not enough?
In California when you purchase Uninsured Motorist coverage, that limit also represents your coverage for Underinsured Motorist, ("UIM"). The catch with UIM is that your carrier is only required to pay you the difference between what you recover from the at fault party’s insurance and your limits, so it is important to carry ample UM and UIM limits. Here’s why: Let’s say you’re in an accident and your bills total $30,000. The at-fault party only carries the legally required minimum limits of $15,000/person for bodily injury. Your UIM limits are the same. In that example, you would recover $15,000 from the at fault party, nothing from your own carrier, and have to pay the $15,000 balance from your pocket. This is because your limits in the example were the same as, not higher than, the at-fault party’s. The situation is only made worse when the accident involves multiple cars or multiple claimants from each car, as the at fault party’s total limit is quickly exhausted and injured people are often left with no coverage at all. Further, if you have to hire an attorney to recover from the at-fault party’s insurance company, the fees you pay that attorney are deducted from your recovery and from your UIM benefit payment.
If you are currently carrying high limits on your liability to protect your assets, but little or no Uninsured/Underinsured Motorist, it may be time to re-think your options. Get a quote for increasing your UM/UIM limits. The increase in your premium may be minimal in comparison to the amount of increased limits you will get in return for the extra cost.
Shannon Haworth is an independent insurance agent with Larson-Clark-Darnell-Haworth Ins. Assoc. in Martinez, CA. Shannon has volunteered her time over the past three years to provide invaluable technical assistance to UP.
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The Powers That Be in Sacramento |
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| Assembly Insurance Committee Chair Honorable Thomas Calderon (916) 319-2086 thomas.calderon@assem.ca.gov |
Senate Insurance Committee Chair Honorable Jackie Speier (916) 445-0503 senator.speier@sen.ca.gov |
KEMNITZER, ANDERSON,
BARRON & OGILVIE, LLP GIVES MAJOR AWARD TO UP
The leading consumer rights law firm of Kemnitzer, Anderson, Barron & Ogilvie, LLP recently provided a very important and urgently needed award of $75,000 to United Policyholders. Principal attorneys Mark Anderson and Bryan Kemnitzer were responsible for securing the award and have our most heartfelt gratitude. The funds will be used to secure and build existing activities and cover our modest operating expenses.
The firm specializes in consumer class actions, including "lemon law" cases, and frequently represents policyholders.
Attorneys in the firm have established precedents in several landmark cases published in the reports of the California Court of Appeal. They have testified in the California Legislative for improvements in the law and have appeared on local television and radio stations on the subject of the lemon law. The firm’s web address is www.kabolaw.com.
NEW MOM WEIGHS IN ON CEA
When the Assembly Insurance Committee asked UP to testify at a hearing on the controversial California Earthquake Authority, Executive Director Amy Bach promised to do her best. On February 28, 2001, Bach testified on behalf of policyholders at a Sacramento hearing with two week old son Jordan and Grandma Ginny Bach in tow.
Bach presented suggestions for meeting the Authority’s biggest challenges, which are a poor product and questionable resources to pay claims after a major quake. An industry representative was overheard remarking that Bach and Consumers Union’s Norma Garcia were "the only witnesses who knew what they were talking about".
How Do Insurers Settle Cases?
UP's Shirley Roberson recently interviewed Clinton Miller, author of a popular textbook titled "How Insurance Companies Settle Cases". Miller says he wrote the book because he wanted to reveal the philosophy and psychology insurance companies use to settle claims. Miller is an insurance consultant and expert witness who owned an independent insurance adjusting firm. He has trained adjusters and written claims manuals.
"It's all about money," says Mr. Miller. "Insurance policies are similar throughout the industry, so financial success depends upon the underwriting and claims departments and to some extent, on marketing. The lower the claims payments, the higher the profits."
Miller decries the lack of training for adjusters in the last 10-15 years. "You could have two adjusters sitting side by side dealing with identical claims and get two different settlements." Insurers cause problems for themselves, he says, by cutting field adjusters to reduce overhead. This has led to a sharp increase in fraudulent auto claims, Miller says. In Miller's view, it takes about five years for an adjuster to get a really good feel for people and their claims. According to Miller, Life insurance companies are the exception in that they tend to have long term employees who do a better job because of their experience and longevity.
Miller describes the trend toward computer and statistical data driven claim settlements. Companies now feed your personal data into computer programs to analyze you and your case and determine the value of your claim.
The book was written for policyholder attorneys and independent adjusters so they can better represent the interests of their clients with insurance companies, but Miller has some tips for the lay person:
Clint Miller's Tips for Laypeople
- Save your insurance claims for the "biggies" to avoid increased premiums or being non-renewed.
- Reduce your premiums by increasing the deductible to the maximum you can handle;
- Get an attorney if you have a disability income policy claim;
- Be aware that the reputation of your doctor or attorney can affect the value of your claim;
- Always remember that the insurance adjuster works for the company.
Clint Miller’s book costs $99 and is available through www.jamespublishing.com,
or by calling 1(800) 440-4780.
UP v. UNUM/Provident Suit Draws National Attention
The matter has been resolved.
Individual policyholders all over the country are suing UNUM/Provident over the denial of their disability claims with strikingly similar fact patterns. UP welcomes any and all information regarding these claims.
Please contact us at info@unitedpolicyholders.org,
or PMB 262, 110 Pacific Ave., San Francisco, CA. 94111.
UP CONTRIBUTES TO QUAKE GUIDE
Information on and from United Policyholders is featured in a recently published book by geo-scientist Ronald Yates titled "Living With Earthquakes in California: A Survivor's Guide". The book combines current research with practical safety information. It provides scientific but reader friendly information on the major California faults, the state of earthquake forecasting and the risks of tsunamis and soil liquefaction. It presents useful preparedness tips on retrofitting your house, designing earthquake plans for families, houses and schools and earthquake insurance. UP's Amy Bach contributed to and edited the chapter on insurance.
Yeats writes: "Even though we can't say when or where the next big California earthquake will strike, we can say where the dangerous places are to build, and we can design a building that will ride out an earthquake without its occupants getting killed. We can do this now, today. We can do a lot about earthquakes, individually and collectively. But first we must become informed." Amply illustrated with maps and photographs, this paperback book is priced at $21.95 and is available in bookstores or by calling 1-800-426-3797. A complete table of contents can be viewed at http://osu.orst.edu/dept/press/EarthquakeCA.html.
NY Community Trust AWARDS Grant to UP
The New York Community Trust recently awarded a $500 grant to UP to support our ongoing work. The grant was secured through the work of Amicus Project Director Eugene Anderson. Anderson continues to provide vital support and assistance to our organization.