While you may not have experienced bad faith insurance issues first hand, you might have heard about it happening in the wake of natural disasters. After Hurricane Ivan destroyed property in Florida in 2004, several policyholders filed claims with their insurer, Citizens Property Insurance Corporation. Unbelievably, Citizens tried to avoid paying those claims. They based their refusal on the fact that the company was created by the state of Florida. According to Citizens, they should enjoy the same immunity from liability given to other government entities in similar situations. A bad faith insurance trial is now pending.

Similar situations arose in Louisiana after Hurricane Katrina. The difference was that rather than state-specific insurance companies refusing claims, it was large, well known, nationwide companies like State Farm. The rationale, at least in one case, was a tiny clause in a homeowner’s insurance policy. The policy covered wind damage, so the homeowner thought she would at least receive payment for the damages caused to her home by the hurricane-force winds. She was shocked when State Farm refused to pay, citing that little clause which stated that if the home was damaged by an earthquake, flood, or other disaster not covered by the policy, the wind damage portion of the policy became null and void.

The point is, if you pay for insurance, you expect it to pay you when you need it. You expect your insurance company to come through and live up to their end of the bargain. When an insurance company acts on bad faith, you must take action to protect yourself, and recover the losses you have suffered. Don’t let an insurance company take advantage of you. If you file a valid claim and your insurance company refuses to pay it, let Bachus & Schanker help you get what you’re entitled to.

For example, if a person is injured in a car accident, the person at fault may not have enough insurance coverage or money to fully pay for the injured party’s healthcare costs, attorney fees, and other expenses. In the past, the health insurance companies covering injured parties required that they be reimbursed for their up-front payments before the injured party received any sort of compensation outside of medical bills. They levied this requirement even if it meant there would be no injured party compensation at all.

The Make Whole bill — now a law — reverses the order of payment. Injured parties receive full payment, or are “made whole,” before any money is remanded to the health insurance company. This allows consumers to cover all the expenses and losses that can result from accidents resulting in injury before having to pay any money to their health insurance provider.

The bill was sponsored by Rep. Claire Levy, (D-Boulder) and Sen. Pat Steadman, (D-Denver). Health insurance companies vehemently opposed the bill, and it has many detractors, but those who support it see it as a triumph for Colorado residents and consumers. Thirty-six other states already have similar laws in place.

Bachus & Schanker, LLC, is proud to have supported the Make Whole bill.

While the insurance companies may want you to believe the strategies of “take or leave it”, “deny, delay, defend”, and “deny, delay, confuse and refuse” are to eliminate cases involving insurance fraud, these strategies, implemented in the mid 1990′s per recommendations from the consulting giant McKinsey & CO., are in reality, tactics to boost the insurance compaines profits at the expense of consumers.

In November of 2008, The American Association for Justice published their report Deny, Delay, Confuse and Refuse, which uncovered strategies that included consistently denying claims and delaying claims in some cases until the insured had died. Other tactics include confusing consumers with incomprehensible contracts, discriminating by credit score, canceling policies of those whose medical conditions become expensive to treat and canceling their policy when a policy holder files a claim.

So, when it comes to Insurance, its buyer beware. Your insurance company may not have your best interest in mind when it comes to settling your claim. Your best defense is to become an educated consumer.

In a newly released report from The American Association for Justice (AAJ), “Tricks of the Trade: How Insurance Companies Deny, Delay, Confuse and Refuse”, describes the ways in which insurance companies boost their profits at the expense of consumers. This is a follow up of the AAJ report “The Ten Worst Insurance Companies in America”.

The new report details six tactics the insurance companies employ to deny policyholders, the names of the insurance companies that are using these tactics and it explains what consumers can do to fight back and protect themselves from these devious tactics.

This first thing you can do to protect yourself is to educate yourself—read the report. And, don’t just assume you’re covered, read your policy and if you don’t understand some of the language, talk to your insurance representative. What you don’t know can hurt you later.

But not any more, thanks to a historic bill passed by the Colorado Congress and signed into law by Governor Bill Ritter. House Bill 1407 will, to cut through the legalese and put it simply, allow normal people to file a lawsuit when their insurance company delays, decreases, or denies a claim on an unreasonable basis. You and I, and every individual, are held to a “reasonable person” standard, and now that is the same standard that will apply to insurance companies when they make claim decisions.

This shouldn’t tread on any insurance company toes. If a claim is clearly excessive, it can be denied, so can a frivolous claim. All this means is that insurance companies must behave reasonably; they can’t delay a decision indefinitely, they can’t offer substantially less then a claim in the hopes that the injured person will take the lesser amount and just go away, and they can’t arbitrarily deny a valid claim. And if an insurance company does any of these things, if they fail to live up to the requirements of their insurance policies and contracts, then the law will help individuals to recover that which is owed to them. It even allows for increased damages and attorney’s fees, maximizing both the penalty to the insurer and easing any burden on the injured person.

All in all, this new law will serve as a powerful tool for helping injured people, and the only people that it will harm are those insurance companies who are attempting to put the screws to their customers.

Nathan T. Swanson
Summer Intern
JD Candidate, 2009
University of Denver

However, I am wondering, will it really decrease the rates. And will everyone be able to get covered? The real question is whether any other insurance companies will follow suit. If they do, basic economics tells us that the rates will go up. The less companies offering insurance to homeowners in that area, the less supply. People are unlikely to move at any significant number away from the area so demand will not substantially change. This will drive up the price. Also, if less companies are offering the insurance, the more risk they are taking on to pay out, so naturally the price would increase that homeowners pay for insurance. The fear of flooding without insurance coverage is well deserved for homeowners after Katrina, and with the recent developments up north in the Midwest.

Iowa, among several other Midwest states are suffering terrible flood damage due to heavy rains and levees, bridges, and dams breaking under the raising water levels. The flooding is moving south and breaking levees along the Mississippi. Flooding is all over the news, and if you are in the Midwest, it is everywhere.

This is especially vivid to me since I went to undergraduate at Coe College in Cedar Rapids, IA. It can be hard to really understand the devastation that occurs because flooding if you are not linked to the area. I remember the shock I felt seeing the aftermath of Katrina and the stories of the people affected. However, when Cedar Rapids came on CNN the first days of the flooding, I was in complete awe. Streets I had walked down and hung out at only a year ago were under water. Buildings I drove by daily were submerged to rooftops.

So many of my friends still live in Cedar Rapids, Iowa City, and Des Moines; I called so many people and stared at pictures they sent me. It is really surreal to see where you called home under water. Luckily, Cedar Rapids, like many other towns and cities, had begun earlier evacuations – many they felt were just for precaution but unlikely necessary – that helped reduce the death toll. Unfortunately, there were still deaths in the Midwest and homes and businesses were destroyed and/or damaged.

Erica Baasten
Summer Intern 2008
J.D. Candidate 2010
University of Colorado

The Allstate Foundation developed a teen safe driving program in 2005. The program consists of creating teen-informed approaches to raise awareness of the issue. The Allstate Foundation is an independent, charitable organization made possible by subsidiaries of The Allstate Corporation.

The Allstate Safe Teen Driving Campaign focuses on four components:

1. Keep the Drive – a national teen-led driving movement which educates teens about smart driving.

2. Community Outreach – promoting smart driving through key teen influencers, including parents.

3. Thought Leadership and Advocacy – informing public-policy decision-makers about safe teen driving.

4. Public Awareness – creating social marketing and public relations campaigns to raise awareness of teen driving as a public health issue.

The Allstate Safe Teen Driving Program kicks off nationally this week.
For more information about this program, go to www.KeeptheDrive.com

The attorneys at Bachus & Schanker understand the importance of protecting and informing teenagers about the safety of driving. We have long supported the safety of driving and are here to help.

For more information about Car Accidents and how we can help, please click here.

Under Colorado law, insurance companies are entitled to what’s known as a “set-off.” This means that insurance companies who issue Colorado policies can set-off the amount paid to you under the at-fault driver’s insurance policy from your own UM/UIM coverages.

So going back to the previous example, since you recovered the $25,000 from the at fault drivers’ policy and your own UM/UIM limits are $25,000 you recover NOTHING from your own UM/UIM policy. This means that the higher premiums you’ve paid throughout the years for your liability and UM/UIM coverage has gone to waste, you are precluded from getting any money under your own insurance policy despite the fact you have at least $20,000.00 in damages due to no fault of your own.

Senate Bill 256 will change this pro-insurance company loophole. If enacted, this bill expressly provides that insurers will not be entitled to a set-off. Meaning, in this example, you would be able to recover your total amount of damages, i.e. the $25,000 from the at fault driver plus an additional $20,000.00 to cover all of your damages. Just think of it as getting what you paid for. Embrace the idea that you’ll continue to faithfully pay your premiums and if you ever have to make a claim, you will actually receive the benefit you’ve paid for.

To determine how much home insurance you need, consider the following factors:

• The structure of your home.
• Your personal possessions.
• The cost of additional living expenses if your home is damaged and you have to live elsewhere during repairs.
• Your liability to others.

It is important to make a realistic list using these factors when determining how much coverage you need. Check out the Insurance Information Institute’s discussion of these factors. To donate or help those families hit hardest by the tornado, click here.