Articles Posted in Insurance Issues

A two-vehicle accident involving a Portland police officer earlier this month merits special attention because of what it can teach us about civil options beyond workman’s comp available to people injured on the job.

The Oregonian reports that “a Portland police officer and another driver were seriously hurt” in a crash in I-205 earlier in March. “The officer was working a ‘static detail’ at a construction site on the northbound interstate south of Southeast Division Street when a driver hit the officer’s vehicle from behind. The officer was pinned in the vehicle and was extracted,” the newspaper writes. Injuries to both the officer and the driver of the SUV that allegedly struck his car are described as serious but not life-threatening.

From a legal perspective the officer now has some important choices to make. At this point most readers will rightly assume that the officer, having been injured on the job, will be covered under the police department’s workers’ compensation insurance program. That is true, but it is not the whole story. Under Oregon law the officer also has the right to hire his own attorney and can seek to recover non-economic damages related to the accident. “Non-economic damages” is a broad legal category that includes things such as pain and suffering and changes to the victim’s life. They do not include things like medical bills and lost wages and, as the legal resource website Justia explains “are less concrete than economic damages and are subjectively evaluated” whether by a judge or jury. (see link below) This element of subjectivity makes it especially important for anyone who has been injured in an accident to consult an experienced attorney who can walk victims and their families through the options and the evaluation process.

Nearly four years ago I first wrote about the obscure, but critically important, issue of “subrogation.” This legal doctrine allows insurance companies to reimburse themselves out of settlements their clients receive for covered injuries.

The incident I wrote about back in 2015 was a classic example of the problem. A baseball fan who was savagely beaten in a stadium parking lot and who now faces a lifetime of medical expenses won an $18 million settlement. His ongoing medical expenses mean that he will need that money. But his insurance company went to court to try to claim a significant portion of the settlement.

Now the Oregon legislature is set to consider a bill that would limit the practice. According to a recent article in Willamette Weekly, SB 421 “would match the laws in many other states, where the injured party can be ‘made whole’ for all damages, including pain and suffering, from the at-fault party’s insurance before the injured party’s medical insurer gets paid.” According to the legislature’s website (see link below) the bill, which has bi-partisan sponsorship, has been referred to the Judiciary Committee, though a hearing on it has not yet been scheduled.

An article published a few days ago in The Oregonian offers a good opportunity for us to examine the problems with Oregon’s systems for dealing with uninsured and underinsured motorists.

The newspaper reports that “a 29-year-old driver who lost control of his car and hit several parked vehicles, causing traumatic injuries to one of his passengers” fled the scene of the accident on foot and was arrested several days later. The accident took place on 92ndAvenue near the intersection with Powell Boulevard in Southeast Portland. The newspaper quotes police saying a 34-year-old woman was hospitalized with life threatening injuries after the incident. The woman’s fiancé was also injured.

The driver “is accused of two counts of felony failure to perform duties of a driver to injured persons” according to The Oregonian. We do not know for certain, but the driver’s decision to flee strongly implies that he was either uninsured or underinsured. As most readers of this blog are probably aware, Oregon and Washington both require every driver to purchase insurance with a minimum of $25,000 in liability coverage.  Those insurance policies almost always provide coverage against being hit by an uninsured and underinsured motorist for the same $25,000.

A recent article in The Oregonian outlined what has become a depressingly common story: the abrupt disappearance of Saudi Arabian students facing criminal charges here in Oregon. The newspaper reports that it “has found criminal cases involving at least five Saudi nationals who vanished before they faced trial or completed their jail sentence in Oregon.”

The suspects “include two accused rapists, a pair of hit-and-run drivers and one man with child porn on his computer.” A 2014 case detailed by the newspaper fits the pattern: shortly after the man’s arrest a Saudi diplomat appeared at the local district attorney’s office to post bail for the accused student. Having made bail and been released the defendant later failed to appear for his trial. As the newspaper puts it, the “cases raise new questions about the role the Saudi government may have played in assisting its citizens fleeing prosecution in Oregon – or possibly elsewhere in the United States.”

Any conduct along those lines would be a serious violation of diplomatic norms. Questions like that lie outside the scope of this blog, but there are other issues raised by these cases that are of immediate concern to us here.

This summer saw some of the largest and most dangerous wildfires ever recorded here in the West. The fall has brought two of the most destructive hurricanes in modern US history to South Carolina and Florida. So, it is with a kind of grim resignation that I return to the subject of insurance companies.

As I have written in the past – most recently in this post from last February – it is essential to look past the insurance industry’s warm and soothing slogans about how they’re always there when you need them. Insurance companies are businesses and their profitability is inversely related to the number and size of the claims they actually pay. That shouldn’t need to be said but, sadly, it does.

This goes well beyond a simple case of ‘always read the fine print.’ Insurance policies are contracts like any other. But it is one thing for a company to inform a policyholder that they are not covered for something and quite another thing for companies to actively seek ways to get out of paying claims that any reasonable policyholder should expect to be paid.

A recent article in the Los Angeles Times (see link below) details the struggles that many people in northern California have faced in the wake of devastating fires that swept through the area late last year. Thousands of homes were destroyed in counties across the state. As the newspaper reports, 44 people died. Sadly, in the wake of this tragedy has come the inevitable reminder: in the words of the LA Times headline ‘your insurance company is not your friend.’

I wrote about this issue six months ago after hurricanes hit Florida and Texas. In the wake of the California wildfires the core issues are similar: an industry that will use the fine print to its advantage whenever possible, blithely ignore rules and regulations and do everything it can to do as little as possible for its customers, all while assuring them that it is there to ‘help’.

According to the LA Times the specific issue in California has been an influx of “adjusters who poured in from other states to help companies process claims” and who then “misinformed policyholders about their rights.” The paper reports that many of the out-of-state adjusters came from the South and were clearly unfamiliar with California law, which provides far stronger consumer protections than are in effect in many other parts of the country. Many of the out-of-state adjusters also appear not to have been properly registered to work in California, the paper reports. In the wake of lawsuits filed by victims, the paper quotes a spokesperson for the California Department of Insurance saying that “the agency is already investigating whether unregistered and unsupervised adjusters worked the Northern California fires.”

People throughout the Southeast are struggling to put their lives back together after the damage caused by hurricanes Harvey and Irma over the last few weeks. More trouble, however, is on the way. Most immediately this takes the form of Hurricane Maria. This latest storm is already hitting a number of Caribbean islands hard (some of which were also hit by the earlier storms) and may also strike the US mainland in the coming days.

Some of the trouble, however, will be completely man-made. Over the coming weeks and months many homeowners struggling to rebuild are likely to discover that the policies they counted on are written more with a mind to protecting insurers than helping the insured.

Most media attention concerning hurricanes and insurance focuses on flood insurance. Few private companies are willing to underwrite flood insurance for anyone living in a flood-prone area so it is offered by the federal government instead. At times like these we see many newspaper and television stories about people who should have bought flood insurance but didn’t or, in the wake of massive storms like Harvey and Irma, people who didn’t think they needed flood insurance in the first place and are now discovering that their policies do not cover the damage to their property.

On Wednesday the US House of Representatives passed the misleadingly-named “Protecting Access to Care Act” on a largely party-line vote of 218-210 (all of the ‘yes’ votes came from Republicans; the noes included 191 Democrats and 19 Republicans). There is no indication yet whether the Senate will take up this little-noticed piece of legislation, but it is worth keeping an eye on, because the provisions of the bill could dramatically curtail patients’ rights. Earlier this month the Trump administration issued a statement of support for the bill – signaling that the President will sign the legislation if it ever reaches his desk.

Earlier this week the website HuffPost published a detailed analysis of the bill by a law professor from New York University. According to that article, the legislation would severely limit the “non-economic” damages that could be awarded in medical malpractice suits involving “injuries like permanent disability, mutilation, trauma, loss of a limb, blindness, sexual or reproductive harm, and other types of suffering and pain. HR 1215 would federally-mandate that if you suffer the most severe non-economic injuries, they are worth exactly $250,000 (no matter what the local jury finds).” In addition, the bill would impose an arbitrary time limit of three years on healthcare lawsuits, making it impossible for injured people to claim compensation for problems that emerged only slowly over a longer period of time.

The measure, in other words, would override state law to protect the economic interests of doctors, hospitals, the drug industry, medical device manufacturers and the insurers who cover all of them.

In banking and insurance – businesses that people need but often hate – few companies have as stellar a reputation as the United Services Automobile Association, commonly known by its initials: USAA. The company is a membership organization, functioning in much the same way as a credit union. Many of the services it provides are offered at a lower cost than comparable commercial competitors, with membership open only to people who have served in the military and their extended families.

Because its core market consists of active duty military, veterans and their families the organization is often surrounded by a kind of patriotic halo. Yet USAA, like any other company, is ultimately in business to make money. Perhaps it is not surprising, then, that USAA has spent years fighting lawsuits that claim it frequently puts profits ahead of people in one of its core businesses: insurance.

According to the company’s Hometown newspaper, the San Antonio News-Express, “USAA continues to be dogged by lawsuits that allege it uses a ‘cost containment scheme’ to delay, deny or reduce medical payouts to customers injured in auto accidents.”

It is an election year, so between now and November we can expect to hear many politicians at the national, state and local levels complain about trial lawyers and call for “tort reform.” As an article published this week in Slate outlines, however, an often disingenuous campaign designed to ‘protect’ big business frequently has an even more shocking effect – protecting child abusers and other people who injure children.

The article begins with the story of an Ohio pastor who was convicted of raping a 15-year-old girl in 2008. In addition to his criminal trial the man was sued by the girl and her family in civil court. As I have written in this space on many occasions, this right alone is important and worth defending. Access to courts for victims and their families is essential if justice is going to be served. As the article notes, quoting a legal scholar at New York University, often “the civil justice system is the only way for a perpetrator to be held directly accountable to the victim.”

A court awarded the victim $3.6 million in damages, but because of award caps required under Ohio’s tort reform laws she was only able to collect $350,000 – less than one-tenth of what the jury decided was her due. The girl and her family are now suing to have those caps declared unconstitutional on the grounds that they are “arbitrary and unreasonable, and thus a denial of due process.” Specifically, there is a strong argument to be made that damage caps violate the US Constitution’s guarantee of a trial by jury. An inherent part of that right is letting the jury decide what is fair – something that the tort reform movement seeks to stifle.

50 SW Pine St 3rd Floor Portland, OR 97204 Telephone: (503) 226-3844 Fax: (503) 943-6670 Email: matthew@mdkaplanlaw.com
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