Subaru and Honda Recall Cars & Motorcycles

Subaru of America is recalling three of its car models and Honda Motor Corp. is recalling some models of motorcycles due to faulty brakes.

In some motorcycle model years from 2001-2012, a defect in the secondary master brake cylinder causes a drag that can lead to a crash or fire. Honda has reported 26 complaints. No indication on whether any injury crashes resulted. Read the MSN article here.

Data Shows Health Insurance Denial Rates Routinely 20%

Bad News Regarding Your Health Insurance

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.

Good Neighbors Are Hard to Find When It Comes to Insurance.

Good Neighbors Are Hard To Find When Filing Claims

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.

Why Lawsuits Aren’t the Reason Your Insurance Premiums Are Rising.

Is Your Money In Good Hands?

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.

Insurance Company Car Accident Releases. Please Release Me. Let Me Go.

Car Insurance Car Accident Releases

Been in a car accident, truck accident, or motorcycle accident?  Thinking of settling you bodily injury claim with the insurance company without hiring a lawyer?  If so, you need to be aware that before you can settle, the insurance company will require you to execute a Release.  But, what is a Release?  What legal effect does it have on your claim?

A Release does exactly what it says.  It releases the other driver from any further legal liability to you for your bodily injuries.  This gives the other driver a written agreement that you will not pursue him for any damages associated with the wreck.  Should you find out later that you were more hurt than you thought or that your claim was worth more money than you accepted, the Release will act to bar any future claim.

As you can imagine, insurance companies will draft the Release.  As you can also imagine, the Release will be written in a manner that provides the insurance company, and its driver,  with the maximum protection against any claims by you.  The Release will not be written with your rights or obligations in mind, and may be written more broadly than even necessary.

The Release is not a mere formality, but a restriction on your rights to pursue a legal claim against the driver who hurt you.  You should treat it as you would any serious obligation.  You should read the document and understand its implications and restrictions.  You may also think about paying an attorney to review the document and insure it doesn’t seek more restrictions than are usual or necessary to accomplish its goal.

Only under very unusual circumstances will a Release be declared invalid.  Once it is signed and delivered, it is binding.  While a Release may be necessary to resolve any potential legal claim arising from a car, truck, or motorcycle accident, that doesn’t mean you should sign away your legal rights until you are fully aware of what it is your signing.

Is Uninsured Motorists Coverage Your Best Protection in a Bad Economy?

Is Car Insurance Your Best Protection in a Bad Economy?

Why is Uninsured Motorists Coverage (UM) your best protection in a bad economy?  States like Kentucky have minimum insurance requirements for cars operated on its roadways.  Kentucky also requires insurance companies, when selling car insurance, to offer UM insurance with every policy sold.  The only exception is if you chose to reject the coverage in writing.

UM is coverage provided by your insurance policy.  It protects you and your passengers in the event you are injured in an accident caused by an uninsured driver.  While it is against the law to drive without insurance in Kentucky, drivers often do.

When the economy gets bad and times are tight, drivers may be tempted to quit paying their car insurance.  This does not stop them from driving.  If they cause an accident, there is no insurance available for the injured person(s).  UM coverage provides such insurance.  This coverage will pay for past and future medical bills and past and future lost wages, as well as, past and future pain and suffering.  It is one of the most important coverages you can have and an absolute necessity in difficult economic times, when the number of uninsured drivers on the road increases.

Unfortunately, when the economy is bad and times are tough, drivers may be tempted to look for ways to reduce their own insurance premiums.  They may think that UM coverage may not be necessary.  People may be encourage to “get legal for less”, meaning they chose to carry only liability insurance to comply with Kentucky’s legal requirements.  This coverage will not help you if you’re injured by an uninsured motorist.  The small premium you pay over a six month period far outweighs the damage done if you’re struck by an uninsured motorist and forgo this coverage.

So beware of insurance agents who offer to reduce or eliminate this coverage to lower your premiums or monthly payments.  Demand that you be provided UM coverage to protect you from uninsured drivers.  While you may be unable to protect yourself against bad drivers, you can protect yourself against uninsured ones.  This may just be your best protection in a bad economy.

Do You Have Uninsured Motorists Coverage?

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.

Toyota’s Deadly Secrets?

MSN Money has an informative article on the recent spate of recalls by Toyota Motor Company, including regulator’s doubts of Toyota’s commitment to addressing safety defects.  According to MSN:

On Jan. 19, in a closed-door meeting in Washington, D.C., two top executives from Toyota Motor gave American regulators surprising news.

Evidence had been mounting for years that Toyota cars could speed up suddenly, a factor suspected in crashes causing more than a dozen deaths. Toyota had blamed the problem on floor mats pinning the gas pedal. Now, the two Toyota men revealed they knew of a problem in its gas pedals.

The article goes on to chronicle the tension between Toyota and federal regulators governed with overseeing the safety of cars.  You can read the entire article here.

CNBC also reported on Toyota’s problems in a video titled “More Trouble for Toyota”.  Click to play.

Kentucky Accident Information is Now Available on Your iPhone.

Access Accident Information Directly from Your iPhone.

You can now directly access Kentucky Accident Information directly from your iPhone or iPod Touch.  Simply type “kyaccidentinfo.com” into your mobile phone web browser.  A new easy to use mobile version of Kentucky Accident Information will appear.  Access information regarding your car, truck, or motorcycle accident, post comments or questions, or contact The Brutscher Law Office about your accident from your mobile phone.

Don’t Loan A Car–Not Even To Tiger.

Should You Loan Your Car?

MSN Money has a great article on the consequences of loaning a car to someone who is involved in an accident. Although the article takes a tongue and cheek look at the accident involving Tiger Woods, it provides helpful insight into what you can expect if you loan your car, and it is involved in an accident.

Perhaps most insightful is what happens if you loan your car to an uninsured driver.  If the uninsured driver who borrows your car causes the accident, your insurance will be 100% responsible for covering damages, including any injuries that occur.  If your uninsured friend is not responsible for the accident, but is injured, the other person’s insurance company will usually pay.  But what happens if the other driver is uninsured or carries too little insurance?

If you have uninsured (UM) or underinsured (UIM) motorist coverage on your car, your insurance company will pay for your friend’s bodily injury.  In these cases, your friend is treated as an insured under the policy, just as you would be.  He would be entitled to the same benefits as you.

What happens if you don’t carry insurance?  If you loan your car to someone who doesn’t have insurance, you have created a worst case scenario.  Not only are you violating Kentucky law, you’re setting yourself up to be personally responsible and criminally liable for the damages caused by your uninsured friend, including repayment of some benefits, like PIP, that do not depend on fault.

If you must loan your car to someone, at least understand the consequences if your car is later involved in an accident.  Make sure that you carry sufficient insurance to protect you and your friend.  Under no circumstance should you drive or allow someone else to drive your car without insurance.