Missouri Insurance Lawyer Blog

Insurance Company Must Hire Attorney To Defend A Lawsuit If There Is Potential Liability To Pay Based On The Facts At the Outset Of The Case

Tue, 07 Feb 2012 09:18:00 -0600

One of the duties insurance companies owe to their insureds is the duty to defend if a claim is made against a person or entity insured by the policy.
In a case handed down this week by the Missouri Court of Appeals, Eastern District, the Appellate Court determined that the allegations of property damage stated potentially covered claims, and the insurance company did have a duty to defend those allegations. Cook's Fabrication & Welding, Inc. v. Mid-Continent Casualty Co. and Greystone, Inc., E.D. 96465.

The duty of an insurance company to defend a claim arises whenever there is a potential or possible liability to pay based on the facts at the outset of the case. This duty is measured by the policy language and the allegations in the plaintiff's petition. The insurer must consider not only those allegations, but also the facts the insurance company knew or could have reasonably ascertained. The duty arises when the facts indicate that a claim is potentially covered, not just when a claim is obviously covered by the policy. To be relieved of this duty, the insurer must demonstrate that there is no possibility of coverage.

In this case, Mid-Continent asserted that the insurance company had no duty to defend based solely on the insurance company's assertion that it did not have to pay the claim because of a particular policy exclusion. Ultimately, the court determined that the exclusion relied on by the insurance company did not apply and the insurance company should have defended the claim.

WORKERS WHO SUFFER WORK RELATED OCCUPATIONAL DISEASES NOW HAVE THE OPTION OF SUING THEIR EMPLOYER IN CIVIL COURT

Tue, 24 Jan 2012 14:50:15 -0600

In a case decided September 13, 2011, the Missouri Court of Appeals, Western District, announced a "substantial departure from prior law" in holding that employees, who suffered work-related occupational diseases, now have the option of suing their employers in civil court. The case is State ex rel. KCP&L Greater Missouri Operations Company v. Cook, 353 S.W.3d 14.

Prior to the 2005 Amendment to the Missouri Workers Compensation laws, employees were prohibited from filing lawsuits in civil court against their employers for occupational diseases. The legal remedy for recovering for an "Occupational Disease" was exclusively a Workers Compensation claim. The 2005 amendment changed the definition of "accident" to now be limited to an injury caused by a specific event during a single work shift.

Further, the 2005 amendments require the workers compensation statutes to be strictly construed. Although "occupational disease" is defined in the workers compensation amendments, the court found that the plain language of the 2005 amendments' exclusivity provisions are limited to injuries or death caused by an "accident". Now, under the 2005 "strict construction" requirement, the court found that the law's exclusivity provision no longer applies to conditions such as asbestosis and cancer. Therefore, workers are now allowed to pursue claims against their employers directly in the civil courts for diseases and medical conditions caused by their employment.

An Insurer Sues Google Over Unflattering Search Results

Thu, 19 Jan 2012 15:21:26 -0600

An insurer is hopeful that they can use an Alabama state law governing deceptive trade practices to stop Google from prominently displaying negative websites about their company. American Income Life Insurance Company has filed suit in the Jefferson County, Alabama with charges that Google (along with several other websites) are violating state law by "intentionally disparaging the goods, services, or business of the plaintiff by false and misleading representations of fact."

At issue in the suit are several websites that appear on the first Google page of search results regarding the company which contain contents condemning the insurer's business practices. One such website, scam.com, displays a heading of "American Income Life is a Scam."

Alabama attorney Richard Baxley, in his letter to Google executives, said the sites are scams that are targeted to hurt the insurer by making anonymous charges under the guise of being "whistleblowers" performing a public service. As a result, Baxley says, the company has sustained significant financial damage. Additionally, he says that these anonymous websites have figured out how to game Google's algorithm to ensure that their sites rank high in search results.

Consistently, the courts have ruled in Google's favor in similar cases. Read more here

WHETHER OR NOT YOU RECOVER BENEFITS FROM YOUR AUTOMOBILE INSURANCE POLICY MAY DEPEND UPON THE DEFINITION OF A SINGLE WORD IN THAT POLICY

Fri, 13 Jan 2012 13:08:18 -0600

Insurance policies are complicated legal contracts between you, the policy holder, and the insurance company. Very often, when a policy holder makes a claim for damages they believe should be covered by their insurance policy, the insurance company will deny the claim citing a reason unknown or often misunderstood by the policy holder.
On December 27, 2011, the Missouri Court of Appeals, Eastern Division, decided an insurance case based on the disputed definition of "owned" and "resident". The case, Manner v. Schiermeier, et. al, and American Family Mutual Insurance Company and American Standard Insurance Company, Case No. ED96143, was a claim against the insurance companies for underinsured motorists coverage on four separate automobile insurance policies because of serious injuries suffered in a motorcycle collision.

The coverage on at least one of the insurance policies depended upon whether the injured Plaintiff "owned" the motorcycle which he was driving as that word was used in the policy. For purposes of the insurance policy, the Court of Appeals determined that even though the certificate of title was not yet in the Plaintiff's name, the undisputed facts demonstrated that the plaintiff held the motorcycle as his own possession, had paid for it, either in whole or in part; drove it; and was in the process of having title transferred to him; and had separately paid for liability and underinsured motorist insurance. Therefore the Court determined that the Plaintiff did indeed "own" the motorcycle for purposes of insurance coverage.

INSURER'S DEMAND FOR INDEMNITY OF MEDICAL LIENS IS A COUNTER OFFER, NOT ACCEPTANCE OF SETTLEMENT DEMAND

Tue, 10 Jan 2012 14:28:07 -0600

On August 12, 2006, James Reppy was seriously injured in a head on vehicle collision with the defendant Gary Winters. Attorneys for Reppy sent a letter to defendant's automobile insurance carrier, Farmers Insurance Group, demanding settlement and left the demand open for 90 days. The demand indicated that if it was not accepted, it would be withdrawn. The offered release would have completely immunized Winters from any further claims in exchange for the policy limits.

The reply of the insurer through counsel indicated that the policy limits offer was accepted, but imposed an additional condition that Reppy's counsel and Reppy would indemnify Winters and his insurance company and their attorney from liability for any type of medical lien.

MISSOURI UNDERINSURED OPINIONS MIXED ON ISSUE OF STACKING

Tue, 03 Jan 2012 14:23:37 -0600

In the case of Long v. Shelter Insurance Company, the Missouri Western District Court of Appeals, held that Shelter Insurance's anti-stacking language in the underinsured motorist coverage was ambiguous because of the "other insurance" clause. The court concluded that Shelter's "excess" language in the "other insurance" clause as well as it's "other insurance in the company" provision created ambiguity when read with the policy's anti-stacking language. The court further went on to strike down the policy set off provision, holding that the interplay of the policy's declaration page, limits of liability, and its promise to pay uncompensated damages created ambiguity when viewed against the policy's set-off language.

Interestingly, on the same day the court also issued the opinion of Stewart v. Liberty Mutual Insurance Company holding in that case that the insured could not stack and that the UIM anti-stacking language was not ambiguous. In its decision, the court distinguished between the "excess" "other insurance" language in the Liberty Mutual policy from the "other insurance" provisions considered by the Missouri Supreme Court in Ritchie v. Allied Property and Casualty Insurance Company, 307 S.W.3d 132 (Mo. banc 2009). In its decision, the Western District relied on a decision which had already been partially repudiated by the Missouri Supreme Court. That decision, Farm Bureau Town & Country Insurance Company of Missouri v. Barker, 150 S.W.3d 103 (Mo. App. W.D. 2004), was noted by the Supreme Court to have not been cited in any other underinsured motorist decision since it was handed down, and to the extent it was inconsistent with Seeck v. Geico General Insurance Company, 212 S.W.3d 129 (Mo. banc 2000), Barker should no longer be followed. In a detailed decision, the Stewart court, relying on Barker, distinguished the excess provision from other provisions addressed in Ritchie and Seeck. The Missouri Supreme Court did not accept transfer of the case. However, given Ritchie's criticism of Barker, and the Western District's reliance on Barker, this issue almost certainly will be revisited in other cases. The Seeck case, which the Supreme Court cited with approval, relied on a long line of cases including Zemelman v. Equity Mutual Insurance Company, 935 S.W.2d 673 (Mo. App. W.D. 1996); Goza v. Hartford Underwriters Insurance Company, 972 S.W.2d 371 (Mo. App. E.D. 1998); Niswonger v. Farm Bureau Town & Country Insurance Company of Missouri, 992 S.W.2d 308 (Mo. App. E.D. 1999); American Family Mutual Insurance Company v. Ragsdale, 213 S.W.2d 51 (Mo. App. W.D. 2006) and Chamness v. American Family Mutual Insurance Company, 226 S.W.3d 1999 (Mo. App. E.D. 2007), which included similar language to the policy contained in Stewart, but reached opposite conclusions of Barker. Undoubtedly, insurers seeking to avoid underinsured motorist liability will avoid the language held to be ambiguous in Long v. Shelter Insurance Company, and move towards the language held not to be ambiguous in Stewart v. Liberty Mutual Fire Insurance Company in the future. Nonetheless, given the inconsistencies between the Stewart court's reliance on the Barker decision and its stark contrast with Seeck and its cases, the underinsured motorist stacking issue will continue to spawn numerous cases, and seemingly conflicting decisions.

Missouri Department of Insurance Warns About Medicare Enrollment Scams

Fri, 21 Oct 2011 10:16:48 -0600

The Missouri Department of Insurance has issued a warning for people who are planning on Medicare enrollment during the current open enrollment period. There are people who are presenting themselves to Medicare applicants as "Medicare-endorsed agents" when in fact, they are there to try to sell you life insurance, annuities, or other coverages.

The Missouri Department of Insurance offers a free program called CLAIM. This free service provides one-on-one counseling for Missourians with Medicare questions. For information on the CLAIM program, visit the MO DOI CLAIM wesbite at missouriclaim.org or call 800-390-3330.

Two New Laws Enacted to Protect Missourians Affected by Damaging Storms

Thu, 13 Oct 2011 10:26:20 -0600

Last month, Governor Nixon signed two new laws into effect bringing additional insurance protections to consumers affected by damaging storms. The new laws provide consumers with better access to insurers and assign new rules for repair companies to avoid unscrupulous business practices.

Recently, some repair companies have begun calling themselves "insurance claims specialists" in hopes of gaining more business after a damaging storm. These repair companies offer to pay homeowner's deductibles and negotiate with the insurance companies on their behalf. The newly enacted Senate Bill 101 prohibits repair businesses from claiming insurance specialties, paying deductibles and negotiating with insurance companies.

The second new law, Senate Bill 132, guarantees insurance companies' ability to set up a mobile customer service center in storm damaged areas to help consumers get their claims filed faster. Earlier this year, insurance companies seeking to set up temporary centers were required by many cities, counties, and incorporated subdivisions and to purchase business licenses or special permits to set up their mobile centers. Thanks to the new law, Missouri insurance companies can now move quickly to set up mobile service centers wherever they're needed without bureaucratic hindrances.

For more information on these new laws, visit the Missouri Department of Insurance website.

Missouri Receives $21 Million Grant to Build Online Health Insurance Marketplace

Fri, 19 Aug 2011 09:59:47 -0600

This grant award will help make health insurance coverage more accessible and affordable for individuals and small businesses. The state Department of Insurance and the Missouri Health Insurance Pool has plans of building an online marketplace where Missouri families and businesses can compare and purchase health insurance that specifically fits them and their needs. The online marketplace will improve competition and drive down costs because of increased transparency, comparison, and product options.

World's Largest Reinsurance Company Rewarded Top Salesmen With Company-Paid Prostitutes

Fri, 22 Jul 2011 10:45:50 -0600

When you pay your insurance premiums, it might seem far fetched to imagine that your money may eventually end up in the hands of a prostitute, but that is exactly what happened with Munich Re, the world's largest reinsurance company.

Munich Re is an insurance company for other insurance companies, also known as reinsurance. In 2007, to reward their top 100 salesmen, board directors and executives, the company held a spa party where they provided 20 prostitutes to provide an array of sexual services. To read more about this news story, see the BBC article, "German Insurer Held Orgy for Salesmen."

$500 Million in Claims Paid Toward Joplin Recovery

Fri, 08 Jul 2011 09:58:37 -0600

Insurance companies serving the consumers in the Joplin area had already paid more than $509 million in claims in the first five weeks after the tornado. These claims were all regarding residential, personal, and commercial property damage due to the EF- 5 tornado that struck on May 22nd. John M. Huff, director of the Department of Insurance expects this number to be three to four times larger by the time all the claims are settled.

Governor Nixon Extends Executive Order Protecting insurance Policyholders in Joplin

Thu, 30 Jun 2011 09:55:44 -0600

Governor Jay Nixon has extended his executive order providing emergency protections for the insurance coverage of Joplin- area residents. Under this new executive order these provisions will stay in effect:
• Insurance companies must provide copies of policies at no charge to consumers who request them;
• Public adjusters must show their state license to prospective clients;
• Public adjusters may not charge customers to pay a fee in advance; and
• After signing a contract with a public adjuster, consumers have 14 days to cancel.
John M. Huff, director of the Department of Insurance says consumers should work with their insurance companies themselves to settle claims first. If a consumer reaches a point where they cannot work with their insurance company then a consumer complaint should be filed with the department. Consumers also have the option of hiring a public adjuster to represent them.

Tips for Handling Your Insurance Claims From Storm Damage

Thu, 09 Jun 2011 11:46:39 -0600

Many Missourians have experienced devastating losses as a result of the storms that have ravaged the southern portion of the state in recent weeks. Thousands of people will be filing insurance claims and we want to help make sure those claims are handled properly by explaining a few situations that could happen with your insurance claims. Here are just a few things to take into consideration:

1. Many insurance companies use a property damage estimating software program called Xactimate. Prices in the program are updated on a quarterly basis. When a large storm strikes it is not uncommon for labor and materials prices in the area of the storm to increase, sometimes rapidly. As a result the prices in the Xactimate program may be outdated at the time of the storm because of the sudden increase in prices. Check with your insurer who uses this or similar programs to determine if they have updated their prices to reflect the increase in the prices immediately following the storm. If not, ask that they do so; otherwise your repair estimate may not accurately reflect the exact cost of repairs.

2. Standard homeowner policies provide that you are entitled to the full replacement cost for the repairs to your home. However, the insurer is only required to pay you the actual cash value of your repairs until you replace or repair your property, and then when that is done you can collect the difference between the replacement cost and the actual cash value. This difference is called the hold back. The hold back is determined by subtracting depreciation from the replacement cost estimate for your repairs. Therefore, if your repairs are estimated at $10,000 for replacement cost value, and the insurer determines that $1,000 depreciation should be subtracted from the replacement cost repair estimate, the insurer will then pay you initially only $9,000 (less your deductible). The $9,000 payment is called the actual cash value payment. Depreciation is determined by considering several factors, such as the wear and tear, age and obsolescence of the item being repaired or replaced. Insurers use a variety of schedules to determine what should be depreciated and for how much. Ask your insurance adjuster how they arrived at the depreciation rate for each item depreciated and what the depreciation rate is based upon to make sure that the appropriate depreciation rate is being applied. Make sure the adjuster is aware of the age of items to be repaired or replaced so that the proper depreciation rate can be applied. For example, the expected age of interior paint may be ten years. If you painted the inside of your house only two years ago, then the depreciation rate that should be applied to the paint job should only be 20%. If the insurer charges a higher rate you should question their depreciation reduction. Also, several items should not be subject to depreciation, such as pure labor items (i.e., remove and replace light fixture to paint room, etc.) or other items (i.e., profit, overhead, and sales tax, etc.) because these items are not subject to wear, tear and obsolescence. Read the insurer's estimate carefully to make sure that such items are not being depreciated.

3. For large losses (anything over $10,000) always get your own estimate from a local licensed general contractor who will commit to doing the work for the amount of his estimate. It is preferable that your contractor prepare an estimate on the same kind of estimating program that the insurer uses so that the two estimates can be easily compared. If there are differences between the insurer's estimate and your contractor's estimate have your contractor meet with the insurer's representative at the house to discuss the differences and have the insurer's representative explain why there are differences. Regardless, once the insurer determines what the repairs are, the insurer must pay you that amount, even though there may still be a disagreement between you and the insurer over any additional amounts that can be owed.

4. If there is a dispute between you and the insurer over the amount of the repairs consider taking advantage of the appraisal provision in the policy which is there to resolve disputes over the amount of the loss. In appraisal, you select a qualified appraiser that you pay, the insurer selects their own appraiser, which they pay, and the two appraisers select an umpire, and you and the insurance company share the cost of the umpire. The appraisal panel then determines the amount of the loss which the insurer must pay. Appraisal has some advantages, in that it can be quicker and less expensive than litigation where there is a dispute over the amount of the loss. Nonetheless, you should be careful in selecting your appraiser, and you should consider getting advice from qualified and experienced attorney on your selection as well as to how best proceed with the appraisal.

Missouri's Second Injury Fund Stops Financial Assistance Payments

Tue, 07 Jun 2011 11:42:20 -0600

Government officials have been warning for some time that the Second Injury Fund for injured workers was running out of funds to pay claims. With nearly 30,000 outstanding claims and 700 new claims being filed each month, this is a big problem for the attorney general. See this recent news story from the Belleville News Democrat.

States Loosen Insurance Rules in an Attempt to Draw Business

Sun, 05 Jun 2011 14:50:04 -0600

A handful of U.S. states are revamping their insurance rules to become more attractive to insurance companies. Vermont, Utah, South Carolina, Delaware and Hawaii are attempting to become destinations of choice for special insurance subsidiaries called captives. See this NY Times article to read more about this unsettling development in insurance laws and regulations.