Posted on September 12th, 2011 No comments
USA Today posts an article on data compiled by the Department of Health and Human Services (HHS) pursuant to the recently passed health care law, showing the denial rates for health insurance. Using this data a Government Accountability Office study of 459 insurers published earlier this year found an average of 19% of applicants nationally were denied coverage. The study showed a wide range of denial rates. A quarter of insurers had denial rates of 15% or below and a quarter had rates of 40% or higher.
The article noted that a House Energy and Commerce Committee investigation into four large for-profit insurers last year found that the denial rates have steadily increased from 11.9% in 2007 to 15.3% in 2009. The companies reviewed were Aetna, Humana, UnitedHealthcare and WellPoint.
The article quotes Kentucky resident Amanda Hite who says she felt “really healthy” when she applied recently for health insurance. But Anthem Blue Cross and Blue Shield denied her, because she had seen a chiropractor a few months earlier for a sore back and later had visited an emergency room because of back pain. Hite’s case isn’t unusual. Many of the plans offered by Anthem Blue Cross in Kentucky reject about one in five applicants, according to data provided by insurers to the HHS. Rival insurers in the state have even higher denial rates: Humana rejects 26% to 39% of applications in Kentucky, while UnitedHealthcare denies 38% to 43%.
This is yet another example of how insurance companies seek to avoid risk. Health insurance companies only want to insure healthy people who don’t use their benefits. Car insurance companies only want to insure people who don’t get into accidents. The difference? Well, most states require insurance companies to offer minimum car insurance, while also requiring all drivers to have this minimum insurance. Health insurance companies for the most part were not so obligated. However, the recent Health Care Law bans health insurance companies from denying coverage for health reasons starting in 2014.
Insurance companies are in the risk business. The more risk a person has, the more premiums that person will pay to offset the risk the insurance company takes on by insuring that person. Mandatory insurance requirements favor consumers, because they inherently spread the risk among a larger group of people, while denying insurance companies the luxury of cherry picking only those consumers who carry the lowest risk.
Posted on September 7th, 2011 No comments
By now we’ve all seen the commercials where some catastrophe befalls an insurance customer for a national insurance company. Surprisingly, the customer is not too worried. They sing a little jingle about “good neighbors” and poof! an insurance representative shows up to handle the situation. This representative calls the person by name and tells them not to worry, they will handle whatever problem has presented itself.
The commercial is meant to give the viewer the impression that if you have insurance with this particular insurance company that any problems you might have will be met by a known, friendly, and helpful insurance agent. This scenario couldn’t be farther from the truth.
Consider a typical situation when you first buy car insurance. You go to a local insurance agent and request insurance for your car. You might have had a previous relationship with this agent over many years. He is a representative of the insurance company. The agent’s job is to take down some information, have you fill out the necessary paperwork, and submit your application, along with your first month’s premium to the insurance company. He then receives compensation in the form of commissions based on each application he submits that is later approved by the insurance company. Your interaction with an insurance agent is likely to be very pleasant. Does this commercial show anything remotely similar?
Now consider a typical situation when you file a claim against an insurance company after some type of loss, such as a car crash. This might be your insurance company or somebody else’s. You get a call from the insurance company adjuster who says he will be handling your claim. It is doubtful you have ever met this person before. Unlike the agent who is an independent representative of the insurance company, the adjuster is an employee. He is paid a salary by the insurance company. His job is to get information about your claim, review the damage (called adjusting), and then offer to settle your claim. Your interaction with an insurance adjuster isn’t likely to be as pleasant. But, the commercial comes a lot closer to showing this scenario doesn’t it?
The purpose of the commercial is to make you identify with something about insurance that you like, such as your insurance agent, while giving you the impression that your agent is involved in the claims process. Well, they aren’t. The unknown, potentially adverse, and likely biased insurance adjuster is.
The insurance agent facilitates your purchase of insurance with the insurance company. The adjuster is the insurance company. The insurance adjuster’s job is not to facilitate anything, but to make sure the insurance company doesn’t pay out anything unless it has to, and only then as a little as possible. Insurance companies don’t make money paying out claims.
But what if you disagree with the adjuster about the value of your claim? What if you believe the adjuster is improperly delaying or denying your claim? What if you think the adjuster is being unfair? What if you think the adjuster has undervalued your car, or other property? Do you think the insurance company is acting like a good neighbor then?
Don’t be fooled by commercials or catchy jingles. Insurance companies are in business to make money. They do not make money by paying out more on claims than they take in on premiums. Adjusters know this. The next time you suffer a casualty loss or turn in an insurance claim, remember no amount of catchy singing is going to make your dealing with the insurance company pleasant. When you ask an insurance company to settle your claim remember good neighbors are hard to find.
Posted on August 19th, 2011 No comments
USA Today is reporting that Allstate Insurance Company is suing Goldman Sachs saying more than $122 million in mortgage-backed securities the insurance company bought beginning in 2006 were fraudulent. According to the article; “Allstate says it purchased more than $122 million in mortgage-backed securities from Goldman Sachs and affiliates in 2006 and 2007. The value of those securities plunged as the housing market bubble burst.”
Still think that lawsuits by personal injury lawyers are the reason your auto insurance premiums keep rising. Think again. Think a $122 million dollar hit in a bad investment by Allstate didn’t effect its bottom line? The truth is that insurance companies don’t really make most of their money from premiums. While accidents due play a part in an insurance company’s risk analysis and in the premiums people will pay, their increase year over year is tied more to a company’s investment portfolio then to actual losses.
There is an excellent article over on Weakonomics that discusses how an insurance company’s investment losses in the stock market effect your premiums. So, you can imagine what a $122 million loss did to Allstate and its decision on whether or not to raise premiums for its customers. You can also imagine why it is now moving to recover some of those losses from Goldman Sachs. Of course, none of this is related to the claims Allstate had to pay out on its policies of car insurance.
Remember the next time someone tells you that car insurance rates are going up because of lawsuits, that such a statement simply isn’t true. In fact, such a statement was probably perpetrated by the insurance companies, their lobbyists, or their politicians as part of a campaign to influence public opinion in their favor.
The next time your premiums rise don’t be too surprised to find out that your insurance company took a hit on its investments or the stock market suffered some loss. Don’t blame it on the victim of a car wreck or his lawyer.
Posted on October 13th, 2010 No comments
Do you have Uninsured Motorists Coverage? Do you know what it is and why you should have it? Answers to these important questions and more coming soon. Be sure to check back.
Posted on March 29th, 2010 2 comments
WHAS 11 recently reported on a fatal traffic accident in the Louisville area, suffered after a driver struck a tree. The woman driver was not wearing a seatbelt and was pronounced dead at the scene. Police were investigating whether or not speed and alcohol played a part. You can read the article and watch the report, here.
Although the woman was driving an older model Volvo without airbags, there is nothing to suggest that the accident would have been fatal had she been wearing her seatbelt. According to the National Highway Transportation Safety Administration (NHTSA), lap-shoulder belt systems reduce the risk of fatality and serious injury by 50 percent when used by drivers and front-seat passengers.
What happens when you are involved in a car or truck accident and you are not wearing a seatbelt? Not only are you at a higher risk of serious injury and death, but you may be found entirely or partially at fault for your injuries. In Kentucky, this finding of fault on your behalf may eliminate or reduce the compensation you get from the driver, who caused the accident injuring you in the first place. For instance, if your failure to wear a seatbelt is determined to have increased your injuries by 50%, then your recovery will be reduced by 50% as well.
Despite their perceived inconvenience, the time it takes to put on a seatbelt far outweighs the cost in injury and death occurring without them. While wearing a seatbelt doesn’t guarantee that you won’t suffer serious injury or death in an accident, it clearly reduces the chance that occurs. For your sake and the sake of your loved ones, always, always wear your seatbelt.
If you were involved in an accident that wasn’t your fault and you weren’t wearing a seatbelt you may need the services of a qualified Kentucky accident attorney. He can evaluate the significance of such a failure on your claim and advise you of the options you might have. Do not take the insurance company’s word that because you weren’t wearing a seatbelt you aren’t entitled to any recovery.
Posted on March 26th, 2010 No comments
Tragic highway accident kills 11 in Kentucky. Courier Journal reports on tractor-trailer which crossed the center line hitting a van head-on. You can read the entire facts here. Our thoughts and prayers are with the loved ones of those in such a tragic accident.
The Courier Journal article has been updated with more facts regarding the accident and victims, including the names of those involved. You can access the new article by clicking the link above.
Posted on March 16th, 2010 No comments
Toyota Motor Company dismissed the story of a Prius owner who previously reported that his car sped out of control on the California freeway. I previously posted about the driver’s claim that his Prius sped out of control when he tried to pass another vehicle on the freeway. He drove for about 30 miles before a CHP officer was able to assist him in stopping the vehicle.
Toyota claims that a review of the car, including the onboard computer, failed to identify a malfunction. They also claim that the information gathered would appear to contradict the owner’s claims of how the accident happened. Toyota has maintained throughout that electronics are not to blame for sudden acceleration claims by Toyota owners.
You can read the entire article here.
Posted on March 9th, 2010 No comments
The Today Show’s Matt Laurer reports on a driver’s claim that his 2008 Prius went wild on the California freeway prompting a frantic 911 call. The Toyota Prius was not one of those recently recalled by Toyota, although some Prius models have been. Watch the responding police officer and the frantic driver talk about his efforts to hit the brakes to slow the car, without success.
Click this link to watch the video of the Today Show report.
Posted on March 9th, 2010 No comments
MSN reports on an AP article documenting the recent spate of lawsuits against the automaker by consumers who claim their vehicles have decreased in value since the massive recall ordered last fall. At least 89 class action lawsuits have been filed around the country. Experts believe such lawsuits could ultimately cost Toyota 3+ Billion, yes billion, dollars. This does not include those lawsuits claiming personal injury or death from defects.
The consumers allege that Toyota knew about safety problems but hid those problems from consumers who purchased their cars. They site to recent decisions by such companies as Kelly Blue Book to reduce the resale value on recalled vehicles by 3.5 percent. While this is not much, with an estimated 6 million recall victims, a certified class getting just $500 per member could reach into the billions.
Toyota of course denies that a vehicle will depreciate much if repaired quickly at no cost, which they offer. However, the issue still remains over whether or not Toyota has identified the problem of sudden acceleration. Toyota continues to deny that electronic computer controls are to blame, but car owners continue to complain of sudden acceleration after the vehicles have been repaired. You can read the entire article, here.
Posted on March 4th, 2010 No comments
The AP reported on Toyota’s efforts to block access to black box information that could explain crashes blamed on sudden unintended acceleration. The AP investigation found that Toyota was inconsistent and even contradictory in revealing what the black boxes record. According to the report; “Toyota’s “black box” information is emerging as a critical legal issue amid the recall of 8 million vehicles by the world’s largest automaker. The National Highway Transportation Safety Administration said this week that 52 people have died in crashes linked to accelerator problems, triggering an avalanche of lawsuits.”
You can read the entire article recapping the AP’s investigation here.
I previously posted on Toyota’s problems back in mid-February. At that time, I posted that more information was likely to come to light before Toyota’s problems faded from public view. Looks like I was correct. Toyota’s public image has certainly taken a hit. Not only should we question Toyota’s reputation as an automaker who makes better more dependable cars, but perhaps more importantly, its reputation as an automaker that makes safer ones as well.
I’ll make another prediction. Before this issue is over, embarrassing evidence will come to light showing that Toyota has known about the problem of sudden acceleration for years, but that it has tried to hide the problem from regulator’s and customers for some time. Stop back by for results on my prediction in the weeks to come.