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Gosanko & O'Halloran, PLLC
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DO INSURANCE COMPANIES ACT FAIRLY? A RECENT COURT CASE UNCOVERS EVIDENCE OF AN INSURER TARGETING VULNERABLE UNREPRESENTED INJURED PERSONS FOR LOW-BALL SETTLEMENTS

What happens to the balance of power when injured people stand alone against an insurance company? The scales of justice may disappear. A recent decision from the New Mexico Court of Appeals suggests that Farmers Insurance Company does not act fairly. Ms. Barbara Sherrill sued Farmers, claiming that she was improperly fired from her position as a claims adjuster where she settled personal injury and insurance claims in both first party (uninsured motorist) and third party (liability) situations.

Among other things, Farmers required that its adjusters settle approximately 50% of claims made by unrepresented individuals within 60 days for $1500 or less. This was referred to as the early claims settlement (ECS) practice. As one insurance consultant who had previously worked for Farmers stated, settlement quotas under the ECS procedure can be “hazardous for accident victims” and can result in a conflict of interests between the insurance company and the interests of its insureds. Farmers informed Ms. Sherrill that she was not settling enough claims for $1500 or less, and terminated her.

Ms. Sherrill sued, arguing that she was terminated in retaliation for her refusal to carry out unfair and illegal claims practices under the ECS practice, and argued that the ECS practice violated the implied duty of good faith and fair dealing that all insurance companies owe to their own insureds. She also argued that Farmers’ program targeted unrepresented claimants from lower economic areas and limited the settlement amount to $1500, thereby promoting premature settlements for vulnerable injured claimants. She argued that Farmers set unfair and arbitrary ECS quotas that forced adjusters to coerce claimants to settle prematurely for unreasonably low amounts and to put the financial interests of Farmers above the interests of its own insureds.

The court observed that a plaintiff in a retaliatory discharge case must identify a specific expression of public policy which the discharge violated, and concluded that Ms. Sherrill had done so in this case. The court observed that an insurer’s duty of good faith and fair dealing, “reflects principles and standards regarded by our Legislature and our courts as being of fundamental importance to the citizens of the state and promote the general welfare.” Just as in Washington, the New Mexico laws define unfair insurance claims practices to include “not attempting in good faith to effectuate prompt, fair and equitable settlements of an insured’s claims in which liability has become reasonably clear”. These laws encourage ethical claims practices within the insurance industry, something that the ECS practice violated.
The court also concluded that Farmers’ ECS program violated the implied covenant of good faith and fair dealing that every insurance company owes to its policyholders, who have the right to receive the full benefits of the policy. By enforcing the ECS program, Farmers failed to treat its insureds equally to its own interests, thereby acting in bad faith.

It is unlikely that Farmers Insurance Company is the only insurance company who has these types of programs that target unrepresented individuals who are the most vulnerable to coercive efforts. So, if you are trying to handle your own personal injury claim, be very careful in dealing with any insurance company, even your own. While we would all like to believe that our own insurance company will be acting in our own best interests, this recent case proves otherwise. For this reason alone, anyone injured in a collision should seriously consider retaining an attorney.
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PART 3 - How will adding PIP coverage onto my policy effect my insurance premiums?

Adding PIP coverage as part of your policy can potentially save you and your family from many of the expenses associated with automobile collision-related injuries, and PIP coverage will likely only increase your premiums nominally.  The cost of coverage depends on a variety of factors including where you live, the type of policy and coverage you choose, the vehicle you drive, and your collision history.  The Washington State Office of the Insurance Commissioner estimates that the average PIP policy costs between 10-25 cents per day.

One important note about using PIP coverage or other no-fault coverages like Uninsured Motorist Coverage is that Washington State Law prohibits insurance companies from raising your rates for using your coverage if you were not at fault for causing the collision.  RCW 46.52.130 provides: “No policy of insurance may be canceled, non-renewed, denied, or have the rate increased on the basis of such information unless the policy holder was determined to be at fault”

We usually advise that adding PIP coverage is worth the small premium increase.  However, if you are looking for ways to offset the additional cost of adding PIP coverage to your policy, consider increasing the amount of your deductible for other coverages like collision.  Check with your insurance agent to discuss how your policy can be adjusted to add PIP coverage.  You can also contact one of the attorneys at Gosanko & O’Halloran, PLLC with your insurance coverage questions.  Our consultations are always free.
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Why You Should Carry Umbrella Coverage…..because when it rains, it pours.
 
             Clients, friends, family, and acquaintances regularly ask us - how much insurance coverage is enough?  Washington State requires that all drivers carry at least $25,000.00 in liability coverage.  However, that minimal limit amount can be exceeded in even minor automobile collision cases.  We are all familiar with how expensive it can be to go to the emergency room, and $25,000.00 doesn’t cover as much as it used to.  As a driver, the last thing you want to worry about after a collision is whether or not your insurance will cover the other driver’s injuries and what happens if it doesn’t cover the damages.  If your insurance policy does not cover the damages you caused in a collision, or a slip and fall at your home, or if your child shoots another child with a BB gun, your personal assets may be vulnerable.  Beyond your own liability, umbrella polices can protect you from someone else who is uninsured or underinsured, as your umbrella policy may stand in the shoes of the at fault party to provide you with needed coverage.  For these reasons, we strongly encourage our clients to get more insurance coverage than the minimum policy limits, carry uninsured motorist coverage, but also to consider an umbrella policy.

What is umbrella coverage?

                Umbrella coverage is an additional layer of insurance that is available if your automobile liability policy limits are not enough to cover the injuries in a collision.  An umbrella policy can also cover any injuries that occur at your home or injuries caused by a family member who lives with you.  Additionally, an umbrella policy can provide coverage to you if the person who is at fault for causing your injuries is uninsured or underinsured.  Umbrella policies are usually not available for purchase unless your automobile liability limits are at least $100,000.00, and umbrella policies usually start at $1,000,000.00 in coverage.  If, for example, you cause a collision that severely injures another person and you have the policies described above, your insurance company would have $1,100,000.00 to resolve the claims against you.  In addition to providing peace of mind, umbrella coverage is also relatively inexpensive for how much it covers.  A typical $1,000,000.00 umbrella coverage is less than $20.00 per month.

When do you need an umbrella policy?

                  If you can’t afford greater than minimal limits, and you have few assets to protect, an umbrella policy may not be available, or even advisable for you.  However, if you own a home, have children, own your own business, are a high wage earner, or have significant assets, you really should have an umbrella policy.  Regardless of where you fall on these criteria, you should speak with your insurance agent at least once a year to discuss your assets and whether you need to increase your liability coverage and whether an umbrella policy is right for you.  In the event life starts raining on you, that one conversation about your insurance coverage can ensure you have an umbrella to keep you dry.
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PART 2 - How much PIP coverage do I need?
 
In Washington, PIP coverage is generally offered at either $10,000.00 or $35,000.00 per injured party unless the policy holder specifically rejects this coverage in writing. When purchasing an insurance policy, you have the option of purchasing either limit depending on your own individual needs. The following are some of the factors that buyers of PIP often consider when deciding how much, if any, PIP coverage is necessary:
 
1.       Your health insurance coverage

If your health insurance deductibles are substantial, or your co-pays are high, you should consider at least $10,000.00 worth of PIP coverage, which will provide 100% coverage of your reasonable medical bills without a co-pay or deductible.  Purchasing PIP will also be helpful to you if your health insurance does not cover certain types of treatment, specialty visits, or extended care. Your preference in the kind of treatment you would seek following a collision should play a factor in your decision to buy PIP and the limits of that coverage. 
 
2.       The possibility of severe injury

Many people are surprised just how expensive it can be to treat even minor injuries. While $10,000.00 may seem like plenty of coverage to pay for treatment from automobile collision injuries, it is often the case that this amount can be exhausted within the first few days or weeks of treatment, especially if your injuries require ambulatory services or a hospital stay. Because it is impossible to predict a car accident or the injuries it will produce to you or your passengers, the possibility of a severe injury is often the primary motivating factor behind purchasing $35,000.00 PIP coverage limits. If you can afford this higher limit, purchasing as much PIP coverage as possible will provide an extra layer of protection for you and your passengers in the event of a serious injury.
 
3.       The possibility of wage loss, household services, or funeral expenses

Unlike most health insurance policies, PIP coverage pays not only for your medical bills, but may also may cover a certain percentage of your wage loss, household services, and funeral expenses in case of a fatal collision. Depending on your particular policy, these additional benefits can provide welcome and necessary assistance to injured parties who are unable to work while they recover, unable or restricted from certain household activities and upkeep, or to families of a deceased relative who would otherwise struggle to pay for the cost of funeral services. In order to protect yourself from expenses resulting from a severe injury, missed work, or funeral expenses, we recommend purchasing as much PIP coverage as you can afford in order to protect yourself, your passengers, and your family.
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What is PIP and why should you have it?

Imagine you’ve just been involved in a car collision. Now, imagine that on top of the stress and complications involved in determining how to fix your car and who was at fault, you or your passengers have also been injured.

As you might expect, even seemingly minor issues such as whiplash or soft-tissues injuries can generate large medical bills that many people find difficult to afford. Even if you have health insurance, it may be difficult to determine how much and to what extent that insurance will pay for your treatment. And what about the other passengers in your vehicle? Who pays for their treatment and injuries?

Personal Injury Protection, or PIP, is an add-on coverage available through most auto insurance policies that is designed to assist insured drivers, and their passengers, with medical expenses resulting from collision-related treatment. PIP coverage will pay for treatment, regardless of who was at fault in the collision, up to a certain limit per individual.

In Washington, PIP coverage is optional. However, you must actively opt out of including PIP on your policy in order to waive your receipt of benefits under this type of coverage.

If you are renewing your policy, it is important to discuss the benefits of PIP coverage and whether it is right for you with your insurance agent. However, the following six-part series is intended to be a brief overview of questions which are often asked when determining whether and how much PIP coverage is necessary.

PART 1 - Do I need PIP if I have Health Insurance?

If you already have health insurance coverage, PIP coverage may still be a good idea to include on your policy for a few reasons:

1. Health Insurance May not cover all your collision-related health expenses.

If your health insurance is covering your treatment, you will likely still be responsible for certain expenses such as deductibles, co-pays, prescriptions, visits to certain specialists not covered under your policy, and even certain specialty treatments not covered under your policy. With PIP coverage, all reasonable and necessary collision-related treatment and the expenses you incur from that treatment will be paid for by your PIP coverage up to your policy limit generally either $10,000 or $35,000 in Washington State). For this reason, PIP is a wise addition to your car insurance policy because it may take care of what your health insurance might not cover.

2. Health Insurance May not benefit the other injured passengers in your vehicle.

If you have health insurance, your treatment may be covered for the injuries you sustained in the car collision. However, unless your passengers are covered under the same health insurance policy, these individuals will not benefit from the same coverage. By contrast, PIP coverage will pay for the treatment of all your passengers up to the individual limit specified by your policy. Thus, PIP coverage can give you and your passengers an extra level of comfort with the knowledge that should a collision occur, all those riding in your vehicle will be covered in the event they are injured.

3. PIP coverage may work in conjunction with your health insurance if you exceed your health insurance limits.

If you are seriously injured in a motor vehicle collision, the medical bills for your treatment can add up fast. Many people are surprised to learn that it is much easier than they would imagine to exhaust the limits of their health insurance policies. When this happens, seriously injured individuals are left in the tricky and stressful position of figuring out how to cover the remainder of their medical bills and pay for any ongoing treatment. Where the medical bills exceed the available PIP benefits, and more treatment is needed, you may be able to work with your PIP insurer, which is the primary insurer after a collision, to tender the limits of your PIP policy such that the secondary health insurance becomes primary. You can then use the PIP funds to cover out of pocket medical expenses not covered by your health insurance. This process is more easily facilitated by an attorney, and you should consider consulting with an attorney after any collision.

Next Week: How much PIP coverage do I need?
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Gosanko & O’Halloran partner, Mark O’Halloran, helps present the Burnham “Hod” Greeley Award to the National Association of Women Judges. 
 
Mark O’Halloran, serving as Vice Chair for the Lawyers Conference of the Judicial Division of the American Bar Association, helps present the Burnham “Hod” Greeley Award to the National Association of Women Judges at the American Bar Association Midyear meeting in San Diego, California.  .
 
The Lawyers Conference presents the Hod Greeley Award annually to a person or organization who has made a significant positive impact on public understanding of the role of the judiciary in a democratic society and its importance to the rule of law.  This award honors the late Hawaii attorney Burnham “Hod” Greeley, a dedicated leader within the ABA who was committed to promoting public trust and confidence in our justice system.
 
This photo depicts Kim Greeley, daughter of the late Hod Greeley, Judge Lisa Walsh of the 11th Judicial Circuit of Florida and current NAWJ president, Justice Joan Irion of the California Fourth District Court of Appeals and cofounder of the NAWJ voter project, and Rachel Dufault, Chair of the ABA Lawyers Conference of the Judicial Division.  Judge Walsh and Justice Irion accepted the award on behalf of the NAWJ.
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UBER AND LYFT: NAVIGATING RIDE-SHARE INSURANCE PROBLEMS

In recent years we have all witnessed the explosion of ride-share apps, such as Uber and Lyft. Like every emerging industry, the ride-share industry has dealt with new regulations recently, including how they are covered by insurance. After many changes, the law in Washington State recently clarified how a passenger, pedestrian or other driver is covered when hit by a ride-share driver.

1. IF YOU ARE A RIDE-SHARE PASSENGER IN A RIDE-SHARE VEHICLE AND INJURED IN A COLLISION

Thankfully, you are covered no matter who caused the collision. Currently, both Uber and Lyft carry $1,000,000.00 commercial liability policies to cover any injuries to passengers or other drivers injured as a result of negligence by a ride-share driver. If the negligence is caused by the other driver exclusively, the other driver’s liability insurer will be liable for the damages. If the other driver does not have sufficient coverage, you should be protected by Uber or Lyft’s uninsured or underinsured motorist bodily injury coverages. If both drivers may have some fault, as a fault-free passenger, you can pursue a claim against all negligent drivers in the collision under Washington’s joint and several liability law.

2. IF YOU ARE A DRIVER AND INJURED BY A RIDE-SHARE DRIVER

If you are a driver injured in a collision with a ride-share driver, things get more complicated depending on the facts. If we assume the ride-share driver caused the collision, then a determination must be made as to what the ride-share driver was doing when they caused the collision.

First, if the ride-share driver had a passenger in their car or they were matched with a passenger and were on the way to pick up that passenger when the collision occurred, any damages you suffered would be covered under the ride-share program’s commercial policy described above.

Second, if the ride-share driver did not have his or her app active, you would be covered under the driver’s personal automobile policy. In this case, the policy could be the state minimum liability policy of $25,000.00.

Lastly, if the ride-share driver does have his or her app active, but has not been matched with a passenger, things can get a little more difficult. Typically, a ride-share driver’s personal automobile policy will decline coverage under these circumstances because the driver was using the car for work, a typical exclusion in automobile insurance agreements. If the driver’s insurance company declines coverage for this exclusion, both Uber and Lyft currently offer contingent liability coverage of $50,000.00 per person and a $25,000.00 policy for property damage.

3. IF YOU ARE A RIDE-SHARE DRIVER INJURED IN A COLLISION

If you are a ride-share driver and you are injured in a collision caused by another driver, you can make a claim through the other driver’s policy, similar to any other collision. If the other driver does not have enough insurance to cover your injuries, you can make a claim under the ride-share company’s uninsured or underinsured policy. At this time, both Uber and Lyft maintain $1,000,000.00 uninsured or underinsured motorist bodily injury coverage. This coverage is also available if the other driver does not have insurance, does not have enough insurance, or in the case of a hit and run collision.

If you are a ride-share driver and you cause a collision, please note that both the Uber and Lyft coverages require the payment of a deductible that can be as high as $2,500.00 for the coverage to be available for any injuries you cause.

4. IF YOU ARE A PEDESTRIAN AND INJURED BY A RIDE-SHARE DRIVER

As a pedestrian, you would be covered under the policy of the ride-share driver in the same way another driver is under section 2.

This is only a primer on the current law regarding liability coverages for Uber and Lyft. The attorneys of Gosanko & O’Halloran, PLLC are available for free consultations regarding any questions that arise from your experience as a ride-share passenger or driver. Please call 206-275-0700.
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6 Important Steps to Take After a Motor Vehicle Collision

Motor vehicle collisions can undoubtedly be one of the more stressful situations a person will experience.  In the moments after a collision, the stress and adrenaline you experience often make it difficult to know what steps need to be taken in order to protect yourself, your passengers, and your vehicle.  We’ve compiled a list of the six important things you should do after a collision.  For ease of reference, we recommend printing this list out and keeping it in your glovebox.

1.       Stay at the scene and call the police.

After a collision, determine whether you or your vehicle are in harm’s way.  If so, and if you are able, pull off to the side of the road. If possible, indicate to the other driver that you are doing so.  As soon as you and your vehicle are safe, immediately telephone the police and request that they respond.  A formalized police report may be important later on to help secure important facts about the collision.  
If you and your vehicle are not in harm’s way, and you are not blocking traffic, after calling the police, consider keeping your vehicle where it is resting after the crash until the police arrive or until you have taken photos of the positions of the vehicles and the damage.

2.       Get Insurance and Witness Information

While you’re waiting for the police to arrive, exchange insurance information with the other driver. Don’t be fooled by statements suggesting that you “just handle this one outside the insurance company” or that you “just settle this one with cash.”  Regardless of how the claim ultimately gets settled, it is important to have the at fault driver’s insurance information in order to provide greater security that the cost of any injuries or damages you suffer will ultimately be recouped.

While waiting for the police, also take down the information of any witnesses to the collision.  These witnesses could have important information regarding the facts of the collision that may be helpful later on.  Consider using your cell phone to take pictures of insurance cards and driver’s licenses.

3.       Check for injuries and take photos of vehicle damage.

Take note of how you and your passengers are feeling immediately following the collision.  Be mindful that the adrenaline you experience immediately after a crash may mask the symptoms of an injury, and people often don’t feel the full effects of an injury for days or even weeks after a collision.  Even if you don’t feel any injuries at the scene, it’s best to be cleared by a doctor before you announce to police or other witnesses that you are uninjured.

If you are able, walk around your vehicle and the vehicle of the other driver and look for damage. Take photos of any damage you observe.

4.       Follow up with your primary care provider and keep track of your symptoms. 

If you know you have been injured, accept the aid of first responders and their transport to the hospital for immediate evaluation.  If you don’t know if you are injured, or after your release from the hospital, schedule an appointment to see your primary care doctor at the earliest possible opportunity so that he or she can make an accurate diagnosis of your injuries.  It is always a good idea to see your doctor just in case you are suffering from a latent condition that can only be diagnosed by a trained physician.  Also, your primary care physician is usually in the best position to direct your treatment options.  Make sure you follow the advice of your doctor regarding any follow up treatment suggested in order to properly treat your condition.

It is also a good idea to keep track of your symptoms and how they affect your everyday life.  A daily journal of your injuries, pain levels, and activity restrictions will help your doctor, the insurance company, and potentially your attorney better understand your injuries and limitations as a result of the collision.

5.       Contact your insurance company and the insurance company of the at fault driver.
 
Before contacting any insurance companies, consider contacting an attorney for additional advice, as the information you provide at this point may be critical to how the insurers perceive and resolve your claims.  If you hire an attorney, the insurers will be prohibited by law from contacting you directly about your claims unless authorized to do so, and your attorney will provide the insurers only the information necessary to ensure the best processing of your claims.  
 
If you are contacting your insurer and the other driver’s insurance on your own, do so as soon as possible after the crash.   Be aware that you may be asked to provide a recorded statement about what happened.  Politely explain that you will provide a statement, but that you don’t want it to be recorded.  When giving your statement, be clear and simple in your description about what occurred and do not volunteer information or embellish or exaggerate the facts about what happened.  If you don’t know the answer to a question, it’s better to say that you don’t know than to guess.  If you are giving an estimate, make sure that you say as much.   
 
The phone call with your own insurer is also an opportunity to understand your coverages.  Collision coverage that could coordinate the repairs to your vehicle, Personal Injury Protection coverage to pay for medical bills, household services, and wage loss, and Underinsured Motorist coverage to extend the resources beyond the policy limits of the other party’s liability insurance might all be implicated in a no-fault collision.
 
6.       Understand your rights.

Insurers often attempt to settle your claims quickly by offering you an amount that sounds reasonable at the time.  If that occurs, remember that knowledge is power!  In Washington State, injured people have three years from the date of the collision to file a lawsuit or settle a claim for negligently caused damages.  Your property damage claim and your bodily injury claims are separate and may be negotiated separately.  Beyond the value to repair or replace your vehicle, you may have incurred towing charges, damage to property within the vehicle, and loss of use of your vehicle.  Make sure the offer to settle your property damage claim includes those elements.

If the insurance company offers you money to settle your bodily injury claim, be aware that you will have to sign a release in order to receive the money, and once signed, you will be prohibited from reopening the claim at a later time.  It is best to understand the full extent of your bodily injuries, medical and prescription expenses, wage loss, out of pocket expenses, and general damages before discussing settlement of your bodily injury claim.  

If you feel as though the offered amount will not fully compensate you, or if you have general questions about any of the steps outlined in the above summary, it may be a good idea to seek the advice of an attorney. An attorney can often help you maximize your recovery and navigate the complex web of insurance companies, medical providers, and other entities that can complicate your recovery and create stress.

Remember, the attorneys at Gosanko & O'Halloran are always available for free consultations regarding your questions about motor vehicle collisions. 
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