PA Law Blogs » Insurance Law

Philadelphia Insurance Fraud and Staged Car Accident Scheme

Admin2 — Mon, 02 Aug 2010 22:59:04 +0000

The thought of anyone staging an auto accident is quite shocking, especially if the intention is to deprive others of the financial assistance that insurance is supposed to provide. Car accidents in Philadelphia and throughout Pennsylvania take place frequently enough due to negligent motorists and for various other reasons without adding those running insurance schemes in the mix.

According to the Associated Press, a man has been sentenced to serve 4 to 10 years in prison for running an insurance fraud scheme that accumulated over $1 million. The man will also have to pay $440,000 in restitution to 17 insurance companies for the money he wrongfully cost them.

The man pleaded guilty to 44 counts of insurance fraud, 43 counts of theft, and other related charged. Over 116 people have been arrested for involvement in the insurance fraud scheme. Authorities have recognized that several staged vehicle accidents were created so that two cars were involved. This was done in order to heighten claim and settlement potentials by having six claimants per staged collision.

The article did not mention how many people suffered injuries as a result of these staged car accidents.

Day Care Mercury Contamination Case against Insurer Results in $208,000 Award

Admin2 — Thu, 22 Jul 2010 11:00:05 +0000

Mercury contamination is a serious issue and can make a building unsafe to inhabit due to potential health risks. Two owners of a day care in New Jersey shut down their business only to be informed on the same day by state officials that high levels of mercury on the premises, which used to be a thermometer factory, made it unsuitable for habitation. Lawsuits against the day care owners shortly followed with two being willingly dropped and three still pending in addition to two class action suits.

A $208,748 award has been approved by U.S. District Judge Jerome Simandle in the case, Baughman v. U.S. Liability Insurance Co. U.S. Liability Ins. Co. is also expected to pay $82,695 to compensate the insureds, who owned and ran the Kiddie Kollege Daycare & Preschool in Franklin Township, N.J. The Legal Intelligencer reports that the liability carrier had previously lost its bid to refuse to defend claims over the contaminated building.

Aside from the day care center owners, defendants in the pending lawsuits include the state and Accutherm Inc. The state is being accused of knowing that the building used for the day care center has been contaminated since 1987. Accutherm Inc. is involved in the lawsuits for allegedly making the mercury thermometers on the contaminated land from 1984 to 1990.

The Centers for Disease Control and Prevention’s Agency for Toxic Substances & Digestive Registery reports that young children are more sensitive and susceptible to harm from mercury exposure than adults. Nervous and digestive systems and kidney problems may manifest in children exposed to mercury. For more information on mercury and your health, click here.

City and Not Insurance Company Must Pay Claim, Federal Court Rules

Admin2 — Fri, 16 Jul 2010 11:00:40 +0000

A federal appeals court in Pennsylvania has ruled that the city of Easton, and not its insurance company, must pay a multi-million dollar settlement with the widow of a police officer who was accidentally shot by another officer inside the police department’s headquarters.

According to an Associated Press news report, the appellate court reversed a federal court’s decision that the Scottsdale Insurance Company should pay claims against the city with regard to this issue. The police officer was killed during a training exercise in March 2005. The appellate court stated Scottsdale does not have to pay the $5 million settlement with the officer’s widow.

Insurance law can be extremely complex. It is important for victims of personal injuries or families of deceased victims filing wrongful death claims to understand insurance laws. Victims can unnecessarily get stuck between two entities as they battle over who is responsible for making the payment. It is unfortunately the victim who gets caught in the middle and suffers the consequences.

Consumers Filing Insurance Claims

Envoca — Tue, 11 May 2010 12:00:47 +0000

For any consumer looking for the insurance policy that works best for them, he or she hopes to never actually have a reason to file an insurance claim. However, the unexpected often happens in which consumers should be able to rely on their insurance company to uphold their end of the bargain as a business serving the consumer in need.

While there are many factors to consider when filing an insurance claim, the National Association of Insurance Commissioners provides a framework of suggestions for insurance claim filing that can help consumers. To begin with, it is extremely important to educate yourself regarding the specifics of your particular policy in terms of deductible value, what is covered, and what is exempt from coverage. In far too many situations, a consumer will file an insurance claim much later than he or she should have. Allowing bills and receipts to accumulate without contacting your agent or company can potentially affect how much you receive in your claim. Another vital component of this process is to be absolutely positive that you have provided your insurance company with all valid information to its entirely. A delay in the process of your claim could occur if incorrect or incomplete information is given.

When filing an insurance claim, remember to maintain and organize your time and expenses as you correspond or communicate with your provider. It’s helpful to retain copies and records of all interactions. You may also want to write down and document telephone or face-to face communications by documenting names, dates, titles of workers that you speak with, and what was stated during the discussion of your policy and/or insurance claim.

While some individuals may feel intimidated when dealing with an insurance company, you should never hesitate to ask any questions, even if in disagreement about a claim settlement. If a claim happens to be denied, you can request a written letter that explains the reason for the denial and the exact policy language under which the claim is not being approved. Policies can sometimes be interpreted differently by the insurance company and the policyholder. It is for this reason, and many others, that you may not want to jump at the chance to accept the first offer of settlement presented by your insurance company. Instead, it is possible that you may be able to negotiate a settlement that you feel is more accurate and fair to your specific situation. Insurance lawyers can often help policyholders determine the difference between a settlement that is fair and one that denies a consumer of the full support they deserve.

Flood Insurance Coverage May Leave Homeowners Dry

Envoca — Wed, 21 Apr 2010 19:35:23 +0000

Many residents in Pennsylvania and throughout the United States have been unable to sell their homes since the National Flood Insurance Program (NFIP) ended in March. A Philly Burbs story discusses one Harrisburg-area family’s difficulty in selling a house that is situated on a flood plain. Their frustration, according to the article, stems from having to pay taxes on the property, but being unable to sell it. Meanwhile, prospective owners showed interest in their property but could not get the necessary flood insurance required in order to do so.

While left in homeowner limbo, the Federal Emergency Management Agency (FEMA) reports that the NFIP is over $18 billion in debt. In taking 18 days “off” in April, the NFIP created problems with the sale and re-financing of thousands of properties within flood plains throughout the United States. With the Senate voting to extend the flood insurance program within a $7.5 billion spending program, President Obama signed the bill, which also funds defense programs and unemployment benefits.

While FEMA does not call for flood plain homeowners to buy flood insurance, several mortgage companies do. Those who have not spent years becoming highly familiar with the ins and outs of insurance law may find these complex – and at the moment, unstable – matters tough to grasp.

FEMA reports that the typical annual premium for a policy under the NFIP amounts to approximately $500 a year. In cases similar to the family in Harrisburg mentioned above, those wishing to sell their home must act now because the extension only lasts until May 31. Time is of the essence even though government officials will be working to develop a long-lasting solution to the NFIP program debt that has been denying Americans the flood insurance they need to settle their property matters. If homeowners are frustrated now, let us hope that a solution is created by the time the extension reaches its end.

Health Care Reform: Insurance Policies to Offer No-Cost Preventative Care

Admin2 — Wed, 14 Apr 2010 12:00:48 +0000

Whether you support or oppose the new health care reform plan, it’s tough to argue that no-cost preventative care as part of a health insurance policy may help improve the finances and well-being of several Americans. A New York Times story discusses how the new health care plan will include immunizations, cancer screenings and checkups, which are considered preventative services, as part of an individual or family’s insurance policy. This means that no additional cost will be necessary to cover efforts to prevent illness, cancer and disease.

In diminishing any out-of-pocket charge for preventative services, the idea is that people will be healthier because they won’t be avoiding certain helpful actions with cost in mind. With more and more Americans in better health as a result of utilizing preventative health services, the overall amount of money being spent on various treatment, prescriptions, and other medical costs should diminish. In addition, if all goes according to plan, less people should become ill and cancer should be detected in earlier, more treatable stages, thus lowering incidents of cancer misdiagnosis.

The President of the National Business Group commented that this aspect of the health insurance plan is “focused on improving an individual’s health and identifying risk factors.”

Those in the insurance law field understand the significance of free preventative care included in health insurance policies. This type of coverage has already been incorporated into large business’ employee health plans to encourage workers and their families to live healthier lives. This type of approach is geared towards lowering overall health care and treatment expenses by preventing the need of these services to begin with.

Based on the article, a benefits consulting firm’s 2009 survey revealed that three out of four large companies provide free preventative health services to employees. While several details of the new health care plan are still being worked out, smaller businesses and individual health plans may find a way to offer similar benefits for achieving overall well-being in making preventative care a part of the insurance policy without any extra fee.

California Takes on Health Insurance Rate Hikes

Admin2 — Mon, 29 Mar 2010 14:00:51 +0000

State governments are taking a close look at the policies of large state health insurance companies after some extreme rate hikes caused uproar in California.

A recent report from MarketWatch shows that Anthem Blue Cross of California recently hiked premiums up to 39 percent. The move attracted the wrong kind of attention from residents and state lawmakers, as well as the President who warned that more of the same might be in store if America doesn’t pass health care reform.

In the report, Blue Cross officials cite “underlying medical cost growth” for the rate hikes. They also say that healthy people choosing not to get health insurance leaves the market with a consumer base that is more expensive.

Advocacy groups have weighed in, saying this just proves what they have been saying all along—that a private for-profit health insurance system does not work.

The MarketWatch report also mentions Mega Life and Health Insurance in California, where estimated rate hikes reach 25 percent. Public hearings will shed more light on the practices of these companies. These cases highlight a fundamental problem with for-profit health insurance in a down economy; when consumers find that health insurance is out of their financial reach, they will elect to stop buying it. This has a negative effect on the providers, some of whom raise rates further. Other critical issues with America’s individual health insurance system include the “emergency room” care strategy, where those without insurance simply visit emergency care centers for their healthcare needs.

Most Americans and lawmakers agree that something has to be done about health insurance, but debates over a solution continue to leave major reforms undone. State efforts may help provide a window into how the government can deal with rising costs of individual and group health insurance. Those involved in insurance law will want to look at how emerging legislation will change the needs of their clients.

Officials Tally Up Insurance Price Tag for Winter Storms

Admin2 — Tue, 23 Mar 2010 14:00:23 +0000

The back-to-back 2010 winter storms that strafed the mid-Atlantic corridor in February were not just a safety hazard and a lifestyle disruption for residents; they were also expensive, according to in-depth studies of post-storm conditions. Analysts looking at the total picture estimate the storms caused over 2 billion dollars in damages to insured infrastructure.

According to a report in BusinessInsurance.com, East Coast officials brought in a California-based company named EQECAT that is billed as a “catastrophe modeler.” What EQECAT found was a lot of property damage. The firm cited roof damage, broken pipes, and water leaks as among the biggest factors in the destruction caused by over 30 inches of snow dumped on the Washington D.C. area. The major effects of the storms were distributed across Virginia, Pennsylvania, New York and surrounding areas.

The report quotes officials from the Insurance Information Institute in New York as stating that winter storms are the third biggest catastrophic damages catalyst in the region, with over 7 billion dollars of damages over the last decade from 1999 to 2008.

Those holding these kinds of catastrophic damages insurance policies, including businesses of all sizes, can expect underwriters to be busy digging through the details of their paperwork in order to assess payouts for covered damages. Experts recommend that policyholders take a look as well. Policyholders should make sure that they have a thorough understanding of what their insurer is responsible for according to their policy. Unforeseen events, like these high-powered winter storms, are always likely to generate some cases where parties seek representation to use business and property insurance law to resolve conflicts over who pays the tab after the storm has passed. Good communication between policyholders and insurance companies can make this kind of resolution speedy and efficient enough that businesses and residents in the area can get back to business as usual.

Insurance Companies Look at Fire Insurance Fraud

Admin2 — Wed, 17 Mar 2010 23:11:36 +0000

Individuals who are involved in local law enforcement know that it can be difficult to get a conviction for an alleged arson offense. However, those who think that insurance companies carry the same burden of proof for denying a fire insurance claim should know that a different standard makes it much easier for insurers to catch cases of insurance fraud.

A recent report in the Insurance Journal reveals more about how insurance companies covering fire damage to properties limit the amounts they must pay for fraudulent fire insurance claims.
According to the Insurance Journal piece, although conviction rates for arson are only around 6 percent, insurers use a “material misrepresentation” standard to deny claims in many arson-related cases; the article quotes insurance lawyer James H. Cole as saying material misrepresentation provides the vehicle for denial in 90 percent of claims that come across his desk.

Proving financial stress for the policyholder is a method insurance companies may sometimes use. In general, insurers have a lot of leeway in denying fire insurance claims that look suspiciously like arson. This helps limit the number of property owners who decide to burn down a structure in order to claim insurance money. Those involved in property insurance cases after a fire should know about these industry standards and how to advise any party about the after-effects of this type of unfortunate situation.

Insurers look to documents to prove that the claimant had a motive to burn down the property to collect insurance money. Other fire insurance fraud investigations include looking at the timing of coverage for property, what went on prior to and after the fire and how the claimant interacted with police and first responders or other witnesses.