Wednesday, July 22, 2009

Auto Insurance Policy Limits - My Two Cents (Part 3)

OK, so in the past 2 entries, I've talked about the basic auto insurance coverages available, and my suggestions for those of modest means. Now, I'd like to discuss policy suggestions for those with more assets --- assets to lose!!

At the risk of sounding like a shill for insurance companies, my general rule of thumb is simply this -- you're much better having MORE coverage!!

I'm not suggesting you put yourself in the poor house over insurance premiums, but if you have assets to lose, and you don't have enough in the way of coverage limits, you might end up there anyway.

In my experience, insurance agents aren't the best guides for this. If you call and say "give me the minimum", that's what they'll do. If you ask, though, you will find that you can pump up those limits at a very reasonable price. Set aside some time to discuss premium pricing with your agent. It's worth it. You'd be surprised how little it costs to bump a $25k policy to $100k; or even $300k!! Ask - ask - ask!! Because every BI policy includes the insurer's cost of having to hire you an attorney, it is the first dollar of insurance coverage that is the most expensive. The insurance company has to pay for an attorney whether you have $25k in limits or $300k in limits. Ask, and then you can make an intelligent decision.

Frankly, $25k in insurance coverage isn't much these days. If you don't have much to lose (like those I was addressing in Part 2), no problem. But if you have six figures of equity in your home; or a couple of nice cars; or stocks and bonds; or a decent income (or incomes), you shouldn't be playing around with a $25k policy. You're inviting trouble.

In fact, while you're talking to your agent about the cost of higher limit BI coverage, ask about an umbrella policy, too. An umbrella policy is one that sits atop your BI coverage -- an extra layer of coverage. It's usually written at a minimum of $1 Million in extra coverage; and often more. And umbrella policies typically provide coverage for some acts not even covered by your basic BI policy. (And the same umbrella policy will usually also provide excess coverage for your homeowner's policy.)

I can't tell you how many times I've seen people sweating out lawsuits because they own way too much and yet are running around with measly coverage. Everyone figures "Not a problem. I'm a safe driver. It won't happen to me." Nonsense. That's why they call it an accident! Protect yourself!

In addition to BI limits, make sure your PD coverage is appropriate. If you are driving around in a $45,000 Suburban, make sure your limits will be enough if someone without insurance hits you and totals your car. How's your medical coverage? If its shaky, consider bumping up your PIP limits. And remember, there are a few 'add ons' you can stick on your policy. Most insurers offer separate rental and towing coverage. This is not for the situation where the other driver is at fault and is insured. Normally, their insurer will pick up your rental and towing bill. But if you are at fault, you'll need separate rental and towing coverage to pay for a replacement rental while your car is in the shop. Again, you'd be surprised how relatively inexpensive this coverage is.

So, simply, the bottom line is this. If you have assets to lose, protect them. Get yourself enough coverage so that you don't have to worry about losing your assets; and get yourself enough coverage so that you, yourself, are covered for damage to your car, medical bills, your own injuries (should the other driver not have coverage), and more.

Remember the old saying, "An ounce of prevention is worth a pound of cure."


Tuesday, July 21, 2009

Auto Insurance Policy Limits - My Two Cents (Part 2)

So for purposes of this discussion, let's assume you are buying insurance; the question will eventually come down to: How much? Well at the risk of sounding like a salesman for my favorite insurance company, under most circumstances, I suggest that 'more is better.'

So let me start with the exception to the rule. You don't need a lot of insurance if you don't have much. For example, let's say you are a 20-year old, out on your own, living in a studio apartment. You make $30k/year and drive an 8-year old Chevy with 95,000 miles on it. In Washington, you are required by law to carry a minimum of $25k in liability insurance. That's the amount that will be available to pay someone else if you are at fault for a car accident. So at the risk of sounding uncaring, if you hit someone and they are seriously injured, your insurance company will probably offer the $25k to settle the claim and obtain a release on your behalf. The injured person's attorney will want to check out your finances to see if they can collect anything from you. With no home, an old car, and a $30k/year job, they'll figure our pretty quickly that you are - essentially - judgment proof. They'll probably take the $25k and then seek additional monies from their own insurer under their own Underinsured Motorist Coverage. So you're off the hook with minimum policy limits.

What about the other coverages? Collision coverage? Comprehensaive coverage? I suppose this depends on the value of your car. The lower the value of your car, the lower the premiums will be for these coverages. However, at some point, you hit the point of no return. In other words, it doesn't make sense to spend $250/year to insure a $750 car with a $250 deductible. So ask your agent to provide you with various quotes; and then make the right $$ decision for you and your circumstances.

PIP and UIM coverages are something you definitely want. PIP provides medical and wage loss benefits - regardless of fault. If you don't have medical insurance, this is a no-brainer!! If you do have medical insurance, you may be able to get away without PIP coverage. But remember, PIP also covers the occupants of your car. Do they have medical insurance? And what will you do if you are injured, and can't work for 3 months? PIP will pay you $200/week during those 3 months. That might not sound like a ton; but when you're looking for money to pay your rent on that studio apartment; it might help a lot!! Your landlord won't excuse your rent payment just because you're hurt. Remember that PIP coverage will be on your policy unless you waive it in writing.

The same is true for UIM coverage. It must be waived in writing or it will exist on your policy. Normally, UIM coverage is written at the same level as your liability (BI) coverage. So if you have a $25k liability limit, the insurance company will automatically give you a $25k UIM limit. If you can afford it, I would suggest asking for a higher UIM limit. Remember, I'm not talking about the money your insurer will pay to someone else if an accident is your fault; I'm referring to money your insurer will pay you if you are hurt because of someone else, and that person doesn't have insurance -- or doesn't have enough insurance. If you are seriously hurt, it would be nice to know that you will be covered for all of your injuries!

So here's the bottom line for those in this financial realm: you're probably OK keeping lower limits on third-party coverage; and probably OK with lower (or no) coverage for your own car; but make sure you have good limits on UIM and, if appropriate, PIP. Talk it out with your agent. Ask for a quote for each type of coverage. A good agent can break it down for you; coverage-by-coverage type. You'd be surprised how little it costs -- for example -- to bump your UIM coverage from $25k to $100k.

Next entry, I'll discuss the same coverage issues for those with more to lose.


Auto Insurance Policy Limits - My Two Cents (Part 1)

Insurance -- unquestionably a necessary evil.

In Washington -- and I dare say in most if not all states -- auto insurance is required. This is going to be a 3-part blog entry. This first part will discuss the basic types of typical auto insurance coverages. Of course, I can't discuss all the details; so feel free to call or contact us if you have specific questions. But I will try to cover the basics. In Part 2, I'll talk about some suggestions for insurance if you're a low wage earner; and in Part 3, I'll make suggestions for those whose income and assets are moving in the right direction (i.e., up!).

The coverage that the State cares about is referred to as "Liability" coverage. This is the insurance that will hire you an attorney and pay a settlement or judgment to someone you have hurt or damaged. Bottom line: you're in an accident that's your fault; the other driver is injured; they sue you. Your insurer hires an attorney for you, and eventually pays the other driver to settle the case - or if the case goes to trial, pays the judgment. Washington requires that drivers carry a minimum of $25,000 in liability coverage (often referred to as BI coverage). That means that if you have the minimum, your insurer will pay up to $25k to resolve your case. If your accident has caused someone to incur more damage than $25k, you can be 'stuck' for anything above the $25k. Your insurer won't pay more than the limits you've purchased. You can, of course, purchase more than the $25k limits. You can purchase limits into the hundreds of thousands -- and as I'll discuss in Part 3 of topic, into the millions!!

Some policies also provide a separate level of coverage limits for damage to the other driver's car. Typically, if you have a $25k BI limits, you may also have a $25k limit for damage to the other driver's car (often referred to as PD coverage).

The two coverages above (BI and PD) are referred to as "third-party" coverage. This means that they are designed to provide monies to 'third-parties' (i.e., other people). The other type of coverage is "first-party" coverage. First-party coverage is designed to provide monies to you - the actual insured.

Personal Injury Protection coverage is referred to as PIP coverage. PIP pays your medical expenses for accident-related medical treatment. Generally, PIP provides up to $10k in benefits for up to a year following an accident. This, too, can be increased. Some PIP policies will pay up to $30k for 3 years following an accident. When referring to PIP coverage, most insurers also include coverage for lost wages, assistance, and (in the case of a death) funeral expenses. Wage benefits are typically limited to 1-year at $200/week. Policies usually provide that wage benefits don't begin until after 2-weeks of missed work. Other portions of PIP may provide for assistance at home. For example, let's say you're laid up at home alone, and you need someone to clean and cook. Your PIP policy may provide benefits to pay for someone to do that for you until you can do it, again, on your own. Now here's a sneaky thing about PIP. If you don't want PIP, your insurer must have you waive the coverage in writing. If they don't, you get it with your policy --- even if you didn't pay for it!

Collision Coverage is much like PD coverage; except it pays you for the damage to your car. It will almost always carry with it a deductible. The lower the deductible on your collision coverage, the higher your premium will be. But if your car is damaged or totalled, regardless of who is at fault for the accident, your Collision coverage will pay for the repairs or pay you the fair market value of your totaled car.

Comprehensive Coverage also carries a deductible with it. This is coverage that applies to protect your vehicle investment when it is damaged by something other than a collision. For example, if someone smashes your window, breaks into your car and steals your stereo; or a tree falls over on top of your car during a storm; Comprehesive coverage takes care of it.

The last major type of coverage is Underinsured Motorist Coverage - generally abbreviated as UM or UIM coverage. This is coverage that pays you if you are hurt in a collision caused by someone else; and that other person either doesn't have insurance, or doesn't have enough.
So those are the primary types of auto insurance coverages. In Parts 2 and 3, I'll discuss suggestions and strategies for the types and amount of coverages you should consider.


Wednesday, July 15, 2009

If You're Hurt - Get Checked Out!

Here's one of the worst kept secrets of personal injury and defense attorneys alike. No early medical treatment = no significant claim. We've heard all the excuses:

  • I didn't have money to pay for it

  • I didn't have insurance to pay for it

  • I hate doctors

  • I hate pills

  • I didn't have the time

  • I thought it would get better on its own

  • My (fill in the blank) told me it wasn't necessary

Understand this: one or more of these may really be true. You may really be hurt. But the bottom line is -- it doesn't matter. If you are in an accident, and you don't seek treatment for many weeks (or worse, many months or more), you are in trouble. I don't mean medically. Because when it comes to your medical care, that's between you and your health care provider. I mean 'legally,' or better said -- 'claim-wise.'

The 'other guy's' insurance company is going to look at your claim and give it short shrift. They're going to assume that: the pain wasn't bad enough to get you to see a doctor; or some other event caused the problem; or more likely, it will reasonably (and probably - correctly) assume that a jury won't buy it. And even your own insurance company -- the one you may be looking for to pay some of your medical expenses under your PIP coverage -- will be extremely concerned. It will probably send you for an IME (an examination by a doctor of its choosing) and hope to get a report back saying that your have no objective problems that are related to the accident. Then it will use that report to deny your PIP claim.

All-in-all, it's a real mess. Defense attorneys know it. Plaintiff attorneys know it. Insurance companies know it. Juries (eventually) know it. The excuses don't fly!!

I can't tell you how many times I've observed the importance of this very basic rule: both in a negative way and a positive way. The negative way is simple. As a defense attorney, I've used this scenario on numerous occasions. Juries and arbitrators don't like seeing months of non-treatment; and the claimant ultimately pays with a low claim result. As a plaintiff's attorney, I've had to counsel my clients about this problem. I've occasionally refused to represent a client under these circumstances - either recognizing that the delay is unexplainable, or because the client doesn't believe me.

But I've also seen situations in which early treatment has proved incredibly helpful to a claim. I had a client, recently, who was in an accident and felt a little sore but didn't want to see a doctor. She relied on excuse # 6 (I thought it would get better on its own.). Fortunately, a friend of hers was a client of mine. About 2 weeks after the accident, the friend encouraged her to call me. I told her to go see her doctor. She insisted that she felt she'd get better -- even though she hadn't improved over that 2 week period. I asked her - tongue in cheek - where she received her medical degree. She went to her doctor.

The doctor noted a typical radiculopathy pattern -- pain, tingling, numbness -- and sent her for an MRI. Two days later she was sent to a neurosurgeon who diagnosed an extruded disc in her neck; and a day after that she was in the hospital undergoing a very significant surgery. Had she waited months before going through this process, the legal outcome might have been very different. Perhaps she would have been in another accident, or a fall. The longer she would have waited, the more difficult it would have been to prove that her spinal injury was related to the accident. But fortunately, having obtained an MRI just 2 weeks after the accident, the 'proof was in the pudding.' Proving her injury was related to the accident was no longer a problem. Her surgery was successful; and once she recovered, we were able to resolve her claim for a significant 6-figure settlement.

If you are in an accident, don't use the typical excuses to avoid medical treatment. If you have symptoms, get them evaluated. It's always better to have a doctor's visit where the result is insignificant, than to avoid the doctor when the result would have been significant -- medically and legally.


Tuesday, July 14, 2009

Even Doctors Make Mistakes Occasionally

I'm not a proponent of rampant medical malpractice claims. I think attorneys get a bad rap for being 'sue happy' when it comes to suing doctors. The fact is, most attorneys I know who handle medmal cases are far from sue happy. In fact, they tend to be just the opposite. Frankly, there's a lot of self-interest in attorneys minimizing bringing medical malpractice lawsuits. This is because:
  • a) they are very expensive to bring;

  • b) they are extremely time-consuming for the attorney and office staff;

  • c) the doctor's insurance companies have huge financial resources to fight the claims; &

  • d) the doctors, themselves, can reject a reasonable settlement -- even if the doctor's attorney and insurer believe settlement is appropriate.

And since almost all such cases are handled by the injured person's attorney on a contingency fee basis (i.e., the attorney only gets paid based on a % of any settlement or recovery), it is in the attorney's best interest not to take a 'loser' case. I'm a big believer in taking good cases; and leaving the 'dreck' behind.

But sometimes, there are good cases. And unfortunately, a doctor's pride can sometimes get in the way of a reasonable, responsible, and timely resolution. Such was the case in a situation in which my client came to me complaining of a goof by her hand surgeon. I won't get into the specific medical details. Suffice it to say that she went into her doctor for a surgical procedure to correct a condition in which one of the bones in her hand had been damaged. As you might know, the hand has many bones. They all work together to give us the ability to manipulate items with great dexterity. In this case, the doctor was supposed to remove the small damaged bone and replace it with a filler. Unfortunately, the doctor messed up. He removed the wrong bone -- the healthy bone immediately adjacent to the damaged bone.

For months, my client was in pain. The surgery didn't seem to have worked. She complained to her surgeon, who merely accused her of being a whiner and chastised her for refusing to actively participate in her prescribed post-surgery physical therapy. She finally sought a second opinion from another surgeon who, without difficulty, discovered the operating surgeon's error.

As an attorney, this was one of the easier medical malpractice cases to prove. After all, we had x-rays from just before the surgery, and x-rays from shortly after the surgery. We had the surgical report from the errant surgeon, and the surgical report from the subsequent surgeon who had to try to fix the unfixable goof. (It was almost as straightforward as a case in which a surgeon amputates the wrong limb!) Yet, when faced with this clear cut evidence, the initial surgeon refused to admit his error. So we were forced to commence a lawsuit.

The lawsuit didn't last too long. The handwriting was on the wall. The doctor attempted to come up with explanations for the problem; but none made sense. Finally, during his deposition, I asked him what could explain the fact that the damaged bone was present both before and after his surgery; but that a previously healthy bone was missing following his surgery. And although he admitted these facts; he admitted no explanation for how that could have occurred. The only thing he was sure of was that he didn't do it. It sounded like a 9-year old boy trying to explain who broke the vase; while standing among the broken glass with a hammer in his hand.

Fortunately -- finally -- his attorney and insurer were able to convince the doctor to authorize a settlement (undoubtedly explaining to him that he would look pretty foolish on the record in front of a jury).

Doctor's make mistakes. So do lawyers. So do plumbers, electricians, builders, teachers, drivers, policemen ... you name it. Let's face it. EVERYONE makes mistakes. It doesn't make them bad people. In fact, it makes them human! When people make mistakes, it's always better to just admit them and move on. When people make legal mistakes, the answer is really the same (although, perhaps, after consultation with an attorney).

With the overwhelming evidence against this doctor, he should have admitted the mistake, and allowed his insurance company to handle it on his behalf. It's unfortunate that he put up a silly -- non-existent -- fight. As a practical matter, it cost him more. He needed to spend substantial time away from his practice dealing with the litigation process -- and frankly, my client might have been willing to settle for less had the doctor not forced her to sue in the first place.

There's a lot to be learned from basic kindergarten rules --- like admit your mistakes and move on.


Wednesday, July 8, 2009

When in Doubt - The Truth is Always the Right Answer

Over 20 years ago, I was handling a case in Everett, Washing-ton; defending a young law school student who had the misfortune of rear-ending a woman on a wet street on a rainy day. The client was embarassed by his inability to stop; but felt solace when he got out of the car and noticed that the only damage to the woman's car was a slightly bent rear license plate holder. No one was hurt. They exchanged the standard information and went on their way. My client was astonished when, a few years later, he was sued.

I started looking into the woman's claims. She had a myriad of complaints - her neck, her back, headaches, etc. And further, she claimed that she had suffered brain damage from the accident; and that her psychiatrist had recommended in-patient cognitive treatment. She had run up over $15,000 in chiropractic bills (a huge sum 20 years ago), and needed $25,000 for the cognitive treatment. She also claimed that she had been unable to work since the accident. This was a huge claim and she wanted compensation.

The woman had further claimed that prior to the accident, she had never had any neck problems, back problems or headaches that required medical intervention or treatment. She had told this to me; and to her psychiatrist. But as I was reviewing her medical records, I came across a reference to a prescription for Tylenol 3, written about 6 months before her accident; a drug typically given by doctors for significant pain complaints. The prescription was written by a doctor who the woman had not properly identified. I quickly obtained those records; only to find reference to neck pain, back aches, and headaches. And also a referral to a mental health clinic. I rushed to obtain those records, too. The woman had not disclosed the clinic, either.

So fast forward to trial. Her psychiatrist is on the stand. He's testifying about her condition and her need for cognitive treatment. He made an impressive witness on her behalf; but then it was my turn to cross-examine the doctor. I asked him whether she had suffered from pre-accident neck pain, back aches or headaches. He said "no." I asked him if she had any pre-accident mental health conditions or complaints of depression or memory problems. Again, he said "no." And the doctor testified that his opinion -- that her current problems were related to our accident -- was based on the fact that his patient did not have any pre-accident problems of that nature. I then pulled out the records I had recently obtained and began asking whether he was aware of the various pre-accident symptoms. In each case he said "no." And then I asked him whether the existence of those symptoms during the 6-8 months prior to the accident might serve to change his mind. The doctor said: "They might. I'd need to look at the records."

Well, I looked at the clock. It was 5 minutes to noon. I said to the Judge: "That sounds fair, Judge. Perhaps we can break for lunch now, and the doctor can review these records over the lunch break?" The judge agreed. I handed a copy of the records to the doctor, and he left for lunch. Shortly before court reconvened, I ran into the psychiatrist in the hallway, and he handed me back the stack of records, commenting "Wow, I had no idea!" That's all I needed to hear. Back on the stand, I asked the doctor whether, following his review of the records, he had a change of opinion. Not surprisingly, the woman's psychiatrist recanted all of his prior testimony; indicating that everything she complained about to him following our accident was something she had complained of during the few months before the accident. With that, her case unraveled quickly.

After closing arguments, the jury went into the jury room to deliberate. I packed up my bags, jumped in my car, and drove over to my wife's grandmother's home. She only lived 10 minutes from the court. As I walked in the door, the phone rang. It was the court clerk, advising me that the jury was ready to return a verdict and I had to return immediately.

I'm sure you can guess the result. Despite a clear-liability rear-end accident, the jury returned a verdict against my client in the amount of $0! Once it was apparent that the woman had lied to her doctor and to me (and probably to her own attorney, too), the jury was unwilling to believe anything she said. She got nothing!!

So what's the moral of the story? It's pretty basic, isn't it? Tell the truth. Tell the truth to your doctors; tell the truth to your attorney; tell the truth to the other attorney. Just tell the truth; period. It's often said: you'll never have trouble remembering the truth; it's lies in which you can get mixed up. Stick to the truth. Maybe you won't hit the 'home run' you were hoping for in court; but more likely, you'll get the fair compensation you deserve. Lie, and you'll get nothing (or worse).