Small Widget Spot

March 13, 2017

Waivers in Personal Injury Cases

Guy O. Kornblum

Guy O. KornblumWhere there are fitness, recreation, and sports activities, there are injuries! Unfortunately, where there are injuries, there are lawsuits! Providers of these activities must take care to manage risk in two ways. First, they should take steps to reduce the likelihood of injury as much as possible. Secondly, they should do everything possible to protect themselves and their business entity from the risks of financial loss. A major financial risk is that of lawsuits by parties injured while participating in fitness, recreation, or sports activities.

Injuries in fitness, recreation, and sports activities arise from three sources. They result from either 1) accidents due to the inherent risks of the activity, 2) negligence (errors or mistakes) of the provider, co-participants, or others, or 3) extreme actions such as gross negligence or reckless actions. Generally, the provider is not liable for injuries resulting from the inherent risks of the activity, however, they are held liable for injuries resulting from their own negligence. A waiver can protect the provider from liability for injuries caused by provider negligence. A waiver generally does not protect the provider from liability for extreme actions.

Liability waivers, contrary to misconceptions of providers in the past, can be effective in protecting providers from liability for injuries resulting from the negligence of the provider. Waivers are inexpensive to obtain, easy to administer and store, and can help protect providers from the consequences of their own mistakes.

What is a Waiver?

Legal terminology can sometimes be confusing. A waiver is a contract between the service provider and the participant signed prior to participation by which the participant agrees to absolve the provider of any fault or liability for injuries resulting from the ordinary negligence of the provider, its employees or its agents. The agreement relieves the provider of liability for injuries resulting from mistakes, errors, or faults of the provider and, in effect, relieves the provider of the duty to use ordinary care in providing for the participant.

The reader, however, will often encounter other terms such as release, disclaimer, and exculpatory agreement. These terms are usually used synonymously with a waiver and while there are minor differences, they are usually referring to the same type of agreement. Another common document is the informed consent agreement. Although some erroneously use it instead of a waiver, the informed consent is a different type of agreement. It is used to protect the provider from liability for the informed treatment risks of a treatment or program to which the individual agrees to be subjected (e.g., medical treatment, therapy, experiment, training program). In general, they are used when something is “done to” the individual. These are used in medicine and research and have recently been used by personal trainers.

Does a Waiver Work?

The answer to this is Yes and No.

  • Waivers do work in most states, but not all. In states where they work, they usually work under certain circumstances, but not all.
  • A number of factors can cause a waiver to fail. Some of these include: 1) When the service is an essential service or of public interest        (e.g., medical care, electric or water service);

2) When one party has superior bargaining power over the other        (e.g., teacher-student, employer-employee);

3) When the conduct is beyond ordinary negligence (e.g., gross         negligence, reckless conduct, intentional acts);

4) When the waiver is to relieve one of a statutory duty;

5) When the waiver is not clear and unambiguous in its intent; 6) When fraud or misrepresentation is involved.

Waiver law is state law and, as such, differs greatly among states. In most states, a well-written, properly administered waiver, voluntarily signed by an adult, can provide service providers with protection from liability for injuries resulting from the ordinary negligence of the provider, its employees, and its agents. It is important that the reader remember three things about the above classification of the states: 1) although the classification is based upon about 900 waiver cases, the ratings are subjective and subject to disagreement among experts; 2) the law in each state is always subject to change (One new state supreme court decision could change the classification of a state overnight); and 3) that not all waivers protect in the lenient states and not all waivers fail in the strict states.

Why do Some Waivers Fail?

In any state, a waiver can fail for a number of reasons. A few of these reasons are explained below.

Language Requirements. The most common reason that waivers fail is because they are poorly written. A key guideline required in all states is that the waiver language be clear and unambiguous. If the waiver does not clearly specify the intent of the parties to release the provider from liability for negligence, the court will not enforce the waiver. Note, however, that what is considered clear and unambiguous varies from state to state. For instance, some states require the waiver to state that the signer is releasing the provider from “negligence” and must include the word “negligence.” Courts in other states do not require, but strongly encourage the inclusion of the term. Still other states simply say that as long as the intent is clear, the specific language is unimportant and accept such language as “release from any and all claims.”

Extreme Acts. Courts in most states enforce waivers of liability only for “ordinary negligence.” Courts in these states hold that enforcement of a waiver when the action resulting in the injury was gross negligence, reckless conduct, willful/wanton conduct, or an intentional act is against public policy.

Unequal Bargaining Power. Waivers are not generally enforced if one of the parties has a clearly dominant bargaining position. Examples would include a coach requiring a waiver of his players, a teacher and a student, and an employer and an employee. Courts generally hold that recreation, fitness, and sports waivers do not involve a clearly dominant position (e.g., health club waivers, waivers for a rafting trip, waivers to go into the pit area of a racetrack, waivers for skiers, and waivers to play recreational softball in a municipal or church league). Courts generally hold that such activities are optional, the participant does not have to participate, the participant can participate in another activity, and the participant can go to another provider — hence, there is no advantage in bargaining position for the provider.

Conspicuous Language. Most courts feel that it is important that the waiver language is obvious to the signer. Preferably the waiver should be on a sheet by itself. This removes the argument that the signer did not know what he or she was signing. On the other hand, if the waiver is included in the middle of the membership contract or on an entry form containing other information, the signer is apt to claim he or she failed to realize that he or she signed away important legal rights. This problem is compounded when the waiver section of these documents is not highlighted and set off in some way. Emphasizing the waiver section by using larger print size, a subheading, bold print, or placing it in a box would help. Failure to do this can result in an unenforceable waiver.

Inherent Risks. Waivers sometimes fail for failure to list the inherent risks of the activity. Courts in some states now require that the inherent risks of the activity be listed. This actually works to the advantage of the provider because including the inherent risks in a waiver provides evidence that the signer was aware of the inherent risks of the activity and assumed those risks. One caution — keep all discussion related to the inherent risks separate so that the signer will not confuse inherent risk with the negligence risks.
There are many other factors that can cause a waiver to fail — too many to address in this article. But the reader should remember that waivers can protect in most states and it is worth the effort to develop a good waiver and use it for protection.

What if the client is a Minor?

This question was easier to answer ten or 15 years ago. At that time, the advice from this author was “Do not use waivers with minors. Waivers signed by minor or by parents on behalf of a minor are not enforceable!” Fortunately for providers, this is not always the case. The law has changed in many states.
It is still true that a waiver signed solely by a minor is unenforceable and provides no protection for the provider.

However, in 12 states, one or more parental waivers have been enforced or there are statutes to that effect.

So, what if the client is a minor? There is no downside to using a waiver with a minor client. Have a parent (preferably both) sign the waiver. If it is not upheld, it still helps with a primary assumption of risk defense. And your chances of enforcement are good in 12 states where parental waivers are currently enforced.        In addition, there are 21 states listed above where the law regarding parental waivers is unknown — and the waiver could be enforced.

Recommendations for Using Waivers

Waivers are the best single risk management tool available to service providers other than the prevention of the injury. Though it is difficult for recreation, fitness, and sport providers to understand:

WAIVERS CAN PROTECT THE PROVIDER FROM LIABILITY EVEN WHEN THE PROVIDER IS NEGLIGENT. In conclusion, a few key points to remember include:

  • Use waivers even in states in which the courts have held that they are not enforceable. They may help establish a primary assumption of risk defense.
  • Do not copy a waiver from a book or article and do not borrow the waiver of a friend who uses one. The waiver should be written and designed specifically for your business and your program.
  • Store your waivers in a safe place and keep them for years — how many depends on the statute of limitations in your state.
  • Learn all you can about waivers (the best single source is the book, Waivers & Releases of Liability, available from the author) and try to keep up with waiver law in your state.

Injured Victims Handbook

Guy Kornblum offers an Injured Victims Handbook, which outlines the basic process of seeking damages for injuries if you are a victim of wrongdoing. There are 12 Chapters which are in layman’s terms and which will outline issues you will need to understand if you have been injured or there has been a death of a loved one and you are seeking compensation from the wrongdoer.

If you want a copy, email gkornblum@kcehlaw.com, or call either of our offices at 415 440-7800 for San Francisco, or 707-544-9006. We can email you a copy or send you a hard copy. I think you will find it very informative. There is nothing else like it out there that I am aware of for injured victims.

March 13, 2017

Insight for Injured Sports Players and Fans

Insight for Injured Sports Players and Fans

Insight for Injured Sports Players and FansTrial lawyer Guy Kornblum, who specializes in bad faith insurance claims, provides an overview for injured sports players and fans. Whether you are a professional athlete or a recreational player, injuries are common in sports. Does the law offer any recourse?

General Rule – No Injury Liability

In many cases, you will not be able to hold anyone else liable for an injury you suffered while participating in amateur or recreational sports activities. Injuries are an accepted risk of playing amateur sports, so bringing a successful personal injury claim is very difficult, if not impossible. But there are a few scenarios that might trigger the legal liability of another participant in the sport or the liability of a third party.

Assumed Risk of Injury in Sports

The legal doctrine of “assumption of the risk” bars you from trying to hold fellow participants or property/facility owners liable when you are injured while playing a sport or game, as long as the circumstances that led to your injury were inherent to — or at least reasonably related to — the sport. The idea behind “assumption of the risk” in this context is that, by agreeing to participate in the sport or activity, you’ve also agreed to assume the possibility that you’ll be injured.

So, if you blow out your knee playing Ultimate Frisbee or get a concussion in a pick-up game of tackle football, you probably can’t hold anyone else liable for those injuries.

Injury Caused by “Unreasonable” Behavior

If your injury was the result of unreasonably aggressive behavior on the part of another participant — you’re playing basketball and the guy you’re guarding punches you in the face because he doesn’t like the way you play defense — assumption of risk wouldn’t bar you from pursuing an intentional tort lawsuit against the person who hit you.

Injuries Caused by Equipment Failure

Also, if your injury was caused by (or made worse by) sports equipment or some other product that was defective or didn’t perform the way it was supposed to under the circumstances, you may be able to bring a product liability lawsuit against the manufacturer.

For example, if the head of a golf club detaches mid-swing and strikes someone in the temple causing permanent brain injury, the manufacturer of the golf club may be held liable for damages.

Injuries at Sports Facilities

Injuries at stadiums and sports facilities tend to fall into two categories: 1) standard premises liability injuries such as slip and falls or trip and falls, and 2) injuries that occur when a fan at a sports event is hit by a ball or a puck. When a guest is injured, who is on the legal hook? Can the owner be sued? Do fans assume the risk and lose the right to a personal injury lawsuit? Read on to find out.

Slip and Falls at a Stadium or Sports Facility

In order to win a premises liability case against the owner of a stadium or sports facility, you must be able to prove that the stadium owner was negligent (i.e., that the owner did something wrong).

Simply because you slipped and fell does not mean that the owner was negligent. Further, simply because the floor was slippery does not mean that the owner was negligent. The floor had to have been unreasonably slippery. Then, in order to prove that the stadium owner was negligent, you must prove that the owner knew or should reasonably have known that the floor was unreasonably slippery, and failed to take steps to fix the problem.

Proving Negligence of a Stadium Owner in a Slip and Fall Case

Let’s take a not uncommon example of a slippery condition at a sports stadium — a wet floor in a bathroom. Everyone who has ever been to a stadium has probably seen a soaking wet bathroom floor at least once.

Wet bathroom floors can be slippery and hazardous, and fans have fallen in stadium bathrooms. But not all slippery conditions in stadium bathrooms involve negligence.

For example, if someone drops a big cup of water (or even two cups) on the floor, and you slip on the water two minutes later, the stadium owner would probably prevail in a lawsuit. There is no negligence in this situation for two reasons: 1) because one or two cupfuls of water on the floor is probably not an unreasonably slippery condition, and 2) even if it was an unreasonably slippery condition, the stadium owner had no reasonable opportunity to learn about the condition and clean it up in those two minutes.

Now let’s consider an example where a slippery bathroom floor would be a negligent condition. Let’s say that the bathroom floor has two inches of water on it because drunk fans constantly put paper towels in the sinks and leave the water running so that the sinks all overflow onto the floor. Let’s say that this happens game after game.

In this type of situation, the stadium owner has reasonable notice that the bathroom floors are constantly slippery. In this situation, a person who slips on the bathroom floor can make a reasonable argument that the stadium owner knew or should have known that the bathroom floors were always slippery, and that the owner should have done something about it.

Injuries That Occur When a Fan is Hit by a Ball or Puck

Another not uncommon occurrence at a baseball or hockey stadium is a fan getting hit by a ball or puck, and some of these injuries can be severe.

What are the fan’s legal rights? If you turn over your ticket to the sports event, you will see a paragraph or two of legal language in extremely small print. This is the stadium owner’s attempted disclaimer of legal responsibility for any injuries that might occur to fans at the stadium. The disclaimer will usually say something like balls, pucks, and even players occasionally leave the field of play, that the balls or pucks might be traveling at high speeds, and that the fan assumes the risk of injury from any balls, pucks, or players that leave the field of play.

How Valid is a Disclaimer?

Let’s say that you get hit by a foul ball at a baseball game. Is this disclaimer really valid? While every state’s law is different, these disclaimers are valid, with exceptions.

The stadium owner still has an obligation to act reasonably to minimize the risk of injury to spectators. That is why all baseball stadiums have netting behind home plate to protect against foul balls. The netting is behind home plate because balls that are fouled straight back are going so fast, and the spectators are so close, that a spectator could not reasonably get out of the way. However, although home run balls also leave the field of play, there is no netting in the outfield because the balls are not traveling as fast and because the spectators in the outfield seats have had four or five seconds to track the ball traveling toward them.

If you get hit by a foul ball while sitting between home plate and first base, you might be able to make an argument that the netting was not large enough, depending on exactly where you were sitting. The stadium industry has standards for how far away from home plate the netting should extend. If the stadium that you were injured at did not meet those standards, you may have a legal case against the stadium owner.

Another example where the disclaimer might not hold up is if you were sitting behind home plate and a foul ball went through a hole in the netting. In this situation, you could argue that the stadium owner was negligent in its upkeep of the netting.

Looking for more information on this subject? Read Mr. Kornblum’s article about waivers.

Mr. Kornblum also offers an Injured Victims Handbook, which outlines the basic process of seeking damages for injuries if you are a victim of wrongdoing. There are 12 chapters which are in layman’s terms and which will outline issues you will need to understand if you have been injured or there has been a death of a loved one and you are seeking compensation from the wrongdoer.

If you want a copy, email be at gkornblum@kcehlaw.com, or call either of our offices at 415 440-7800 for San Francisco, or 707-544-9006. We can email you a copy or send you a hard copy. I think you will find it very informative. There is nothing else like it out there that I am aware of for injured victims.

March 7, 2017

Don’t Let Your Insurance Company Treat You Unfairly!

Don’t Let Your Insurance Company Treat You Unfairly!

Don’t Let Your Insurance Company Treat You Unfairly!

Most of you have insurance.  You insure your autos, your homes, your health (medical insurance), your income (disability insurance) and your lives. You may also insure your businesses against damage to property used for commercial purposes and loss of income. Your insurance includes protection against lawsuits filed by a third party against you, and you expect your insurance company to defend you in that lawsuit and protect you against a judgment for money damages.

Fear of the Future

We buy insurance not because we want it but because we need it – fear of the future motivates us to protect ourselves against injury to ourselves, our families and our property.   The prudent person buys as much insurance as he or she can afford – sometimes even more. We seek from our insurance company peace of mind and security against the risk of financial injury caused by the unexpected.

Frenemies?

Your insurance company is a friend when you agree to purchase the insurance.  However, often that same insurance company becomes your enemy when you make a claim. The claims process is often a hostile and difficult one with a burdensome amount of paperwork and frequent requests for more information. Usually with the goal of finding a way to turn down your claim or limit payments.  Some insurance companies reward their claims handlers for keeping claim costs down by basing their compensation on how little they pay on legitimate claims.

Power and Control

Insurance companies are powerful financial corporate structures.  They have large treasuries.  While the purchase of a policy may take place at your home or business or at a local office, things are different when a claim is made.  Nearly all of the time you are dealing with someone who is hundreds if not thousands of miles away. A face to face meeting is rare, except when an investigator shows up at your door unexpectedly. Indeed, your insurance company has the power and control over you in your relationship with it.

Consider these points:

  • Your insurance company fixes the price; there is no bargaining.  You can lower your cost only by accepting less insurance
  • It chooses the language for your policy; you are stuck with the policy terms your insurance company selects
  • Your claim is paid when your insurance company decides to pay; it determines when and how much you receive
  • Dealing with your insurance company is on a take it or leave it basis

What Can You Do?

What can you do when you believe your insurance company acts unfairly?  How do you combat “low-balling” or wrongful refusals to pay you what the insurance company promised to pay you for the protection that you purchased?

You can go to your state Department of Insurance. However, these state executive departments are generally ineffective.  More than one-half of the states under-fund their Departments of Insurance, so they have inadequate staffs and resources to handle complaints from the public. In some states, the Department of Insurance has been graded as low as an “F” by an independent agency. Not surprisingly, when a claim is denied your insurance company will usually refer you to the state Department of Insurance if you disagree with the claims decision, knowing that you will receive little help.

Unfair Claims Practices Act

What your insurance company does not tell you is that there are ways to combat its wrongful denials.  For example, in nearly all states, there is an Unfair Claims Practices Act which lists 16 unfair claim practices which insurance companies cannot engage in.   You are never told about this when your insurance company denies a claim.

In addition, all insurance companies must abide by a duty of “good faith and fair dealing” in their investigation, administration, and decisions regarding your claim.  If your insurance company violates these duties to you, you can sue and obtain money damages for what is owed you under your policy plus damages for your worry and anxiety and in some instances attorney fees.  And, in the cases of malicious and fraudulent claims handling, your insurance company may be liable to you for punitive damages based on a civil fine which you receive to punish the company for its wrongful conduct.

Don’t put up with insurance company abuse and unfair treatment

We can help you evaluate your claim and determine if you need to sue to get what is rightly yours under your insurance policy. You paid for protection; YOUR insurance company should provide it! — Guy O. Kornblum

Mr. Kornblum welcomes your comments at gkornblum@kornblumlaw.com.

December 22, 2016

Bad Faith Claims and Wins at KCEH

Bad Faith Claims and Wins at KCEH

Bad Faith Claims and Wins at KCEHBad Faith Claims

We recently filed the first of two cases against Anthem Blue Cross for failure to fully pay a claim for emergency medical evacuation by an insured who needed immediate transport to a medical facility after suffering a serious injury. The case is filed in the United States District Court for the Southern District of Indiana. In addition to the California Bar, Guy Kornblum is a member of the Indiana Bar and has joined with Dave McNamar of Indianapolis, who is Of Counsel with KCEH. The case is a compelling one indeed and includes a “bad faith” claim.
We also have a second and even more compelling case (with a great story about the insured who was on an “Angel of Mercy” venture when she suffered a stroke while trekking up Mt. Kilimanjaro). More on that one later.

Wins

We settled a very interesting case on behalf of an infant who is the survivor of a father not married who was shot at a South of Market St hotel during an altercation over a drug purchase. The story has been in the papers (SF Weekly mid-Nov). Excellent settlement in a case of this kind. No insurance! Mr. Kornblum and Nicholas Peterson were the lawyers on the case with colleague Christoper Morales, a criminal lawyer in San Francisco who can be reached through his website.
December 3, 2016

Pursuing Arbitration in UM/UIM Claims

Pursuing Arbitration in UM/UIM Claims

How Much Auto Insurance Coverage Should I Have?

I often state that it is our recommendation that anyone owning an auto have primary liability (protection if you negligently hurt others) policy limits of $300,000 per person and $500,000 per accident. In addition, and an excess policy above that which provides at least $1 million in additional liability coverage and also if you are injured by an uninsured or underinsured motorist protection.

As to the latter, if you are injured by the negligence of a third person with no insurance or insufficient coverage to compensate you or others in the car, then your policy kicks in and provides additional coverage. For example, if you have the total of $1.5 million I have recommended, and you are injured by a negligent driver, you have that additional sum which is available to pay for your injuries. If the negligent driver has $100,000 in coverage you have $1.4 million. Your UM/UIM protection pays if a) the other driver is negligent (i.e. you have added to his or her liability protection on your policy), and b) causes injury, (i.e. medical expenses, pain and suffering).

I also stress that in order to qualify for this coverage you must purchase liability insurance in the same amounts as the UM/UIM insurance that you want. Make sure you cover this with your agent when discussing your auto policy.

Pursuing Arbitration

Let’s discuss how the matter proceeds if the UM/UIM claim is denied or challenged. In the case of UM/UIM claims, California law mandates that these claims be arbitrated, and that the decision of the arbitrator is final and cannot be appealed except in rare cases. See Insurance Code section 11580.02.

If you have gotten this far without a lawyer, I highly recommend your engage one to represent you. What will take place now needs an experienced lawyer to guide you through the process.

Arbitration is a formal proceeding in which the parties submit their dispute to a neutral (lawyer or retired judge usually), who has authority to make a decision, based on the evidence presented. The decision of the arbitrator is binding on the parties.

What is a Mediation?

One thing that might happen before an arbitration is that the parties agree to mediate the UM/UIM claim. A mediation is a meeting of the parties supervised by a “neutral”, usually a retired judge or experienced lawyer, who oversees the negotiation of the claim. By law, what takes place in preparation for, during and after a mediation is confidential. Nothing that takes place during this process can be used by any party against the other, so the parties can candidly discuss their views of the case and settlement. It is a far less expensive and risky way of resolving any dispute, including UM/UIM claims.

Arbitration involves the presentation of the case to an arbitrator much like a trial. There is no jury and the arbitrator performs the same function as a judge, and also the jury as a finder of fact. An arbitration is conducted in a private office, not in a courthouse. While it is informal in the sense that all the formalities of a court trial are not followed, it is a formal proceeding in that it follows the usually format of a trial. The presentation by both sides follows the normal court trial process: briefs are filed, exhibits presented, opening statements are made, witnesses are called (lay and experts such as medical witnesses), and when all parties have rested (i.e. finished their evidentiary presentation), the lawyers argue the case and possibly file post trial briefs.

The arbitrator then decides the case usually taking some time to review the evidence and the briefs. The decision of the arbitrator is usually written and is called an “award.” Once it is served on the parties, it can be converted to a court judgment, which then is enforceable against the defendant insurance company if the award is not promptly paid. If the award is for money in favor if the insured (it can be a zero which means the insurance company owes nothing), it should be paid promptly. Since tje arbitrator’s decision is final, there is no appeal, so to this extent it is an expedited process. If the insurance company does not promptly pay the award, it may be in “bad faith” which means the insured has a second suit for this delay or failure to pay as a separate claim.

In addition to representing our clients, Mr. Kornblum also serves as an expert witness in insurance claims and legal malpractice claims, and as a mediator. For more information contact our San Francisco office at 415-440-7800.

November 15, 2016

Insurance Company Responsibilities in Uninsured/Underinsured Motorist Claims

Insurance Company Responsibilities in Uninsured/Underinsured Motorist Claims

Insurance Company Responsibilities in Uninsured/Underinsured Motorist ClaimsThis is the third article from Guy O. Kornblum on Uninsured/Underinsured Motorist Coverage (UM/UIM). He has discussed what it is, how it works and why you should have as much coverage as you can. As a reminder, it is our recommendation for primary policy limits of $300,000 per person and $500,000 per accident, and an excess policy above that which provides at least $1 million in additional coverage for UM/UIM. I also stressed that in order to qualify for this coverage you must purchase liability insurance (i.e. which protects you from suits by others resulting from your negligence) in the same amounts as the UM/UIM insurance that you want. Make sure you cover this with your agent when discussing your auto policy.

Insurance Company Responsibilities

Now let’s discuss how the insurance company must handle a UM/UIM claim once it is presented. First of all, there is an important point to recognize: UM/UIM coverage involves a claim made by an insured to its own insurance company. Thus it is that relationship, based on the insurance policy – a contract – that is at the heart of the claim. This results in a conflict between the insurer and the insured, as the insurer “steps into the shoes” of the negligent driver. If the insurer is contesting a claim it is going to argue a) that its own insured was totally or partially at fault for that insured’s injuries.

Nonetheless, the insurer must still handle the claim in “good faith” and not act unreasonably and arbitrarily. That is, as a first party claim (i.e. the insured is making a claim to its own insurance company), the insurance company has a legal obligation (i.e. duty) to comply with the covenant of good faith and fair dealing, which is implied (even though not expressly stated) in every insurance policy in California. This means that the insurer must comply with certain obligations, including not acting unreasonably in handling, evaluating the making a decision about the claim – i.e. whether to pay or not.

The Good Faith Obligation

As part of this “good faith” obligation, the insurance company must also comply with California’s Unfair Claims Practices Statute (Insurance Code §790.03(h)) and the accompanying regulations (10 California Code of Regulations 2695.1 et seq.) which regulate the conduct of insurers with respect to claims handling . For example, the insurer must “attempt to effectuate a prompt fair and equitable settlement after liability becomes reasonably clear.” (Cal. Ins. Code §790.03(h)(5).) It also must “diligently pursue a thorough, fair and objective investigation and shall not persist in seeking information not reasonably required for or material to the resolution of a claim dispute.” (10 Cal. Code Reg. 2695.7(d); emphasis added.). The insurance company has no choice. It is required to follow the “good faith” claims handling rules regarding their investigation, administration, and decisions regarding your claim.

When to Fight Back

If your insurance company violates these duties to you, you can sue and obtain money damages for what is owed you under your policy plus damages for your worry and anxiety and in some instances attorney fees. And, in the cases of malicious and fraudulent claims handling, your insurance company may be liable to you for punitive damages based on a civil fine which you receive to punish the company for its wrongful conduct. This “good faith” claims structure applies in cases of UM/UIM claims even though the insurance company’s responsibility is based on the question of the negligence of the third party driver who was not its insured – you are!

These “good faith” rules prohibit “low balling” (offering below value numbers in an effort to force you to accept this offer because you need the money), or unfair and unreasonable denials. When the insurance company does not live up to these rules, you have the right to seek a recovery against your insurer for failure to provide you – as the insured and purchaser of UM/UIM coverage – what the insurance company promised to pay you for the protection that you purchased?

Next: What Happens if the Insurance Company Denies Your Uninsured and Underinsured Motorist Claim? Pursuing Arbitration.

In addition to representing our clients, Mr. Kornblum also serves as an expert witness in insurance claims and legal malpractice claims, and as a mediator. For more information contact our San Francisco office at 415-440-7800.

October 17, 2016

What Happens When Motorists Don’t Have Insurance?

What Happens When Motorists Don't Have Insurance?

In our last post, we shared an an overview of what Uninsured/Underinsured Motorist Coverage (UM/UIM) is and why you should have it in your auto policy. Another staggering fact is that despite efforts by states to curb the number of uninsured motorists on the roads, the Insurance Research Council found 12.6 percent of drivers nationwide were driving without coverage in 2012, the last year for which data is available. All told, 29.7 million people were driving uninsured during that year nationwide.
How Much Coverage do you Need?
As a result, we recommend primary policy limits of at least $300,000 per person and $500,000 per accident, and an excess policy above that which provides at least $1 Million in additional coverage for UM/UIM. To obtain such, the insurer must offer this level of coverage and you must purchase the same amount of liability insurance coverage as you purchase for this UM/UIM insurance.
Making a Claim
There are certain requirements in making a UM/UIM claim under the governing statute, California Insurance Code §11580.2.
There are three classes of people who are covered by a vehicle policy with UM/UIM coverage. These include:
  1. The person named as the insured, his or her spouse, and his or her relatives while residents of the same household. Persons in this category are given the widest coverage. For example, they do not have to be riding in the insured vehicle at the time of the injury. If they are in a vehicle which is uninsured or underinsured that can qualify for coverage. They can even be injured as pedestrians and qualify for coverage.
  2. The second group includes any person in or upon or entering into or alighting from an insured motor vehicle. So the only question is if the vehicle is insured.
  3. The third group is more limited – any person who is entitled to recovery for care or loss of services because of bodily injury to which the policy provisions apply. This applies primarily to “loss of consortium” (damage to the relationship and loss of services) claimed by one spouses for injury to another.
There are three alternative means by which a claimant can preserve a UM/UIM claim (and thus not have it barred):
  1. File a complaint against the negligent driver (and owner of the vehicle if the driver is not the owner) within two years of the accident (this is the limitation period for filing in California).
  2. Conclude an agreement as to the amount to be paid for the UM/UIM claim with your insurance company.
  3. Submit a demand for arbitration to the insurance company by certified mail, return receipt requested within the two year period.
Hit and Run Coverage
There is also UM coverage for an accident resulting from a “hit and run” driver. Here there is only UM coverage because the offending vehicle has disappeared and there is no insurance available for that vehicle.
In order to qualify for this coverage there are three requirements:
  1. There must be “physical contact” between the “hit and run” vehicle and the insured vehicle (to avoid fraudulent claims).
  2. Within 24 hours of the accident, it must be reported to the police or sheriff.
  3. Within 30 days of the accident, a statement under oath must be provided to the insurance company setting forth the facts and circumstances of the claim.
Who is Protected?
Remember, UM/UIM coverage protects you, the occupants of your car, and insured family members who are residing with you if any of them is a victim of an accident by a motorist who carries no liability insurance (i.e. insurance who provides coverage for claims by third parties) or the amount of liability insurance coverage is less than the amount of UM/UIM coverage you have.
How it Works
So, again (I gave a different example last issue) here is how this coverage might work as underinsured motorist coverage.
You and two family members are hit by a vehicle being driven negligently and suffer injuries. The negligent driver has liability coverage of $100,000/$300,000. There is no additional insurance – i.e. excess or umbrella coverage for that driver. You have primary coverage of $300,000/$500,000. Thus the amount of liability insurance protection for the negligent driver is less than the UM/UIM coverage you have.
There are three claims against the negligent driver. The most his insurance company will pay is $100,000 per claim, and $300,000 total for all claims. You have more protection under your UM/UIM coverage: There is an additional $200,000 per person under your primary policy UM/UIM coverage ($300,000 limits minus the $100,000 liability limits of the negligent driver’s policy), subject to the $500,000 per occurrence (i.e. accident) limits as reduced by the total of payments made under the driver’s policy (if $300,000 is paid out, there would be only $200,000 left in the aggregate of your primary policy) plus the $1 Million additional coverage applied to all claims under your UM/UIM excess coverage. So there is more insurance money available for these claims.
As noted, if the negligent driver is not insured (or it is a “hit and run” accident that qualifies as noted above), then the entire amount of your UM/UIM coverage is available to pay for the claims arising out of the accident.
Which Coverage to Buy
As a general rule the cost of this additional insurance protection for you and your car’s occupants, those family members who are residing with you is normally not that great. But in order to qualify for this coverage you must purchase liability insurance (i.e. which protects you from suits by others resulting from your negligence) in the same amounts as the UM/UIM insurance that you want.
Make sure you cover this with your agent or broker when discussing your auto insurance.
Next: The Uninsured/Underinsured Motorist Claim: What are the Insurance Company’s Responsibilities in Handling the Claim? 
 
In addition to representing our clients, Mr. Kornblum also serves as an expert witness in insurance claims and legal malpractice claims (www.jurispro.com), and as a mediator (www.kornblummediations.com). For more information, please  contact our San Francisco office at 415-440-7800.
October 17, 2016

The Importance of Having Uninsured and Underinsured Motorist Coverage

The Importance of Having Uninsured and Underinsured Motorist CoverageUninsured Motorist and Underinsured Motorist Coverage (UM/UIM) is available as additional insurance coverage in your auto policy. Many overlook or don’t understand the importance of this coverage.

What is this coverage? It is purchased as part of your vehicle coverage. It is a separate type of insurance that protects you, the occupants of your vehicle, and others who are family members living with you, from being injured by a negligent motorist who is driving without or with insufficient insurance coverage on that vehicle to pay for the injuries caused.
Why is it valuable? If the negligent driver injures you or someone in your car, and has no insurance, then your insurance company steps in as if it was the insurer of that negligent driver and your policy then provides funds to pay for that wrongdoing. This is uninsured motorist protection.
Underinsured protection is different. It protects you and your passengers from the negligent driver who does not have sufficient insurance to pay for your claims. California is a “set off” state. That is, what you collect from the negligent driver is subtracted from the limits of the underinsured motorist coverage you have. (See the example below.)

Frankly, in California in the underinsured coverage situation, you can never collect your full limits because of this reduction; thus, you pay for coverage you will never have! But that is the way it is structured in our state. A change should occur so that the full limits are available so we are not a “set off” state anymore.

Example: If you are injured by a negligent motorist with only $15,000 per person coverage in that vehicle’s policy (the minimum limits required), and you have greater coverage for UM/UIM, say $300,000 per person, you have an additional sum of $285,000 available to pay per person for the injuries caused by that negligent motorist. As noted, the amount of coverage for the negligent driver is deducted from your limits so you have the difference available. The “per person” limits on your policy are limited to the “per occurrence” (i.e. for one accident) limits of that policy. For example, you may have $300,000 per person coverage but $500,000 per accident, so the total amount available is limited to $300,000 for any one person, but $500,000 for all persons injured in an accident.

How much is it worth? Under California law, you must be offered the opportunity to include UM/UIM coverage in your policy at least for the minimum limits required of $15,000 per person and $30,000 per occurrence. While the statute does not require insurance companies to offer this coverage above limits of $30,000 per person, and $60,000 per occurrence, many insurers do. However, there are conditions to purchasing these greater limits. To qualify for the increased UM/UIM limits you must purchase the same liability limits (governing claims by others if you are negligent).
Do not sign the waiver: To delete this coverage from your auto policy, you must sign a written waiver of it. That is not wise. Indeed I recommend not only that you include it but that you also apply for much higher limits to protect yourself, other occupants of your vehicle, and family members living with you from being injured by a negligent driver who does not have sufficient liability insurance to pay the full cost of the injuries resulting from that vehicle’s negligent operation. Most carriers will offer higher limits, but you should confirm that through your insurance agent.
Why do you need this coverage? The answer is because there are over 2.6 Million drivers on the road without any insurance coverage for injured victims from their negligent driving. Wow, you say! How does that happen if proof of insurance is necessary to register a vehicle. It is easy: as noted, the required minimum limits is only $15,000 per person, and $30,000 total for any one accident. In any case of real injuries, this is hardly enough to pay for medical bills, let alone income loss or pain and suffering. Also, policies get cancelled or premiums are not paid on time, so the vehicle remains uninsured for liability of a driver who negligently injures another, a passenger or someone in another vehicle.
With so many drivers without insurance on our highways, it is critical for you to purchase the highest amount of UM/UIM coverage you can. But it will not happen unless you ask your insurance company about this, and also shop to get the best coverage. It is not expensive.
Seldom do agents or brokers selling vehicle insurance explain the importance of UM/UIM coverage. At least that is my experience.
Get as much as you can: In addition to getting the highest amount of UM/UIM coverage for you and your family, I also recommend you explore obtaining excess UM/UIM coverage of at least $1 Million. The main reason for having it is so you have this additional $1 Million protection above your primary policy’s coverage or you and your family.
Our work: Recently, an article in Forbes magazine featured a story on a case in which we represented a young man who was very seriously injured by an intoxicated driver who had no insurance. Fortunately, his family had primary UM/UIM coverage plus an excess policy which provided for the son’s medical and other needs. They were so thankful that they had acted prudently and asked for and obtained this coverage.
Don’t overlook this aspect of insurance protection. For more on this topic, visit our website, or call one of our offices (see numbers below) for other articles on personal insurance that we believe you should have. (We don’t sell insurance or benefit from your purchases; but we are relieved when a client who has been injured by a negligent motorist who has no or insufficient insurance has large limits of UM/UIM protection so that we can obtain adequate compensation for the injuries.)