Chris Robertson

Did you hear about the three journalists and five consumer advocates that were in a van going to the airport?

They suffered horrible injuries when hit by a very well insured truck.

A tremendous settlement resulted.

The started an insurance company, and wished to reduce cost in order to serve their costomers better.

Rather than a claims department, they just left a big barrel of money in the lobby for those with medical expenses to draw from.

Seriously, Chris, what contract in ANY area of your life do you easily understand?

That three page document you sign prior to being treated at the hospital emergency room?

That financing agreement you sign at Circuit City for the big screen TV?

That five page document you sign when you ship your household goods from Denver to your new home in Irvine?

That little blurb at the bottom of you application for employment? What does it REALLY mean?

Ancient language appears in contracts that insure property from loss while on a ocean going vessel.
But it has not changed in 300 years. Why? Because a body of law has built up around this contract language, and folks know where they stand when they buy the coverage.

Perhaps a "standard language" regulation would be beneficial to the consumers in California?

All insurers would have the same contract language regarding preexisting conditions.
Something that states the applicant MUST answer the questions, MUST name the conditions for which he has been treated in past 24 months, etc. The insurer would be forbidden to rely on health history information that was produced 36 months prior to the effective date of the coverage.

During the first 12 months of the contract, claims discovered to be for preexisting conditions would be DENIED, but the coverage would remain in force. (Here, a particulary detailed defination of "preexisting" would be necessary.)

DEFINITIONS:
PREEXISTING CONDITION A health condition that manifested or was treated in past 24 months, or had developed to the level that one learned in medicine would have diagnosed or recognized the need for additional medical attention, or would have recognized the symptoms, had been called upon by the patient.

In exchange for these concessions, the consumer would be advised on the application that a purposeful misrepresentation
may result in a refferal to the local D.A. for prosecution. After all, this could be construed as an attempt to obtain something of value by lying.

If I obtained a mortgage with a representation on the application that my salary was $220,000 a year, I would be lying.
The consequences of this lie would be severe. Ask a mortgage banker what happens when they discover fraud.

You have property insurance. It covers loss of household goods due to fire, burglary, etc.
Also covers you for liability in case you are sued because you left a garden hose on sidewalk and some neighbor tripped on it. Also covers you house in case it burns down.

Do you know what it does not cover?
If a nuclear bomb exploded within 10 miles of you, the consequences would be severe.
But would your insurer pay for your hotel if you had to move to a motel for a year while things were tidied up in your neighborhood? Read the exclusions on last page of your homeowners policy...

Sierra Pacific sold motorcycle coverage in California. On the application they asked "does the motorcycle have an alarm?"
and "where is it garaged?"

Then, when a bike was stolen, they would RESCIND the coverage because it was not parked in a garage!!
This meets my criteria of outrageous behavior on part of the claims department. Many were victims of this process, but when I sent a dozen examples to L.A. Times, they never responded.

Insurance companies do not like to pay claims for houses that burn down when the fire began before the policy was applied for.

In situations of health insurance, the claims handler asks "when did this fire begin?"

Not every rescission action is improper. Shernoff gets 200 a month, and finds 2 or 3.

Some rescission actions are improper. Blue Cross of California does a lot on "impropers".

Call me---I have many more stories about abuses of insurance companies AND abuses of consumers attempting to defraud.

Posted at February 23, 2007 6:28 AM in response to Why Are Insurance Contracts Still Incomprehensible?

Chris Robertson

Did you hear about the three journalists and five consumer advocates that were in a van going to the airport?

They suffered horrible injuries when hit by a very well insured truck.

A tremendous settlement resulted.

The started an insurance company, and wished to reduce cost in order to serve their customers better.

Rather than a claims department, they just left a big barrel of money in the lobby for those with medical expenses to draw from.

Seriously, Chris, what contract in ANY area of your life do you easily understand?

That three page document you sign prior to being treated at the hospital emergency room?

That financing agreement you sign at Circuit City for the big screen TV?

That five page document you sign when you ship your household goods from Denver to your new home in Irvine?

That little blurb at the bottom of you application for employment? What does it REALLY mean?

Ancient language appears in contracts that insure property from loss while on a ocean going vessel.
But it has not changed in 300 years. Why? Because a body of law has built up around this contract language, and folks know where they stand when they buy the coverage.

Perhaps a "standard language" regulation would be beneficial to the consumers in California?

All insurers would have the same contract language regarding preexisting conditions.
Something that states the applicant MUST answer the questions, MUST name the conditions for which he has been treated in past 24 months, etc. The insurer would be forbidden to rely on health history information that was produced 36 months prior to the effective date of the coverage.

During the first 12 months of the contract, claims discovered to be for preexisting conditions would be DENIED, but the coverage would remain in force. (Here, a particulary detailed defination of "preexisting" would be necessary.)

DEFINITIONS:
PREEXISTING CONDITION A health condition that manifested or was treated in past 24 months, or had developed to the level that one learned in medicine would have diagnosed or recognized the need for additional medical attention, or would have recognized the symptoms, had been called upon by the patient.

In exchange for these concessions, the consumer would be advised on the application that a purposeful misrepresentation
may result in a refferal to the local D.A. for prosecution. After all, this could be construed as an attempt to obtain something of value by lying.

If I obtained a mortgage with a representation on the application that my salary was $220,000 a year, I would be lying.
The consequences of this lie would be severe. Ask a mortgage banker what happens when they discover fraud.

You have property insurance. It covers loss of household goods due to fire, burglary, etc.
Also covers you for liability in case you are sued because you left a garden hose on sidewalk and some neighbor tripped on it. Also covers you house in case it burns down.

Do you know what it does not cover?
If a nuclear bomb exploded within 10 miles of you, the consequences would be severe.
But would your insurer pay for your hotel if you had to move for a year while things were tidied up in your neighborhood? Read the exclusions on last page of your homeowners policy...

Sierra Pacific sold motorcycle coverage in California. On the application they asked "does the motorcycle have an alarm?"
and "where is it garaged?"

Then, when a bike was stolen, they would RESCIND the coverage because it was not parked in a garage!!
This meets my criteria of outrageous behavior on part of the claims department. Many were victims of this process, but when I sent a dozen examples to L.A. Times, they never responded.

Insurance companies do not like to pay claims for houses that burn down when the fire began before the policy was applied for.

In situations of health insurance, the claims handler asks "when did this fire begin?"

Not every rescission action is improper. Shernoff gets 200 a month, and finds 2 or 3.

Some rescission actions are improper. Blue Cross of California does a lot on "impropers".

Call me---I have many more stories about abuses of insurance companies AND abuses of consumers attempting to defraud.

Terence

Posted at February 22, 2007 4:57 AM in response to Incomprehensible Insurance Contracts: Part II -- Towards a Tort of Bad Faith Drafting?