The New Jersey Supreme Court recently held that an automobile insurer must pay an innocent third party the contracted $10,000 amount of basic coverage following an auto accident involving the insured's vehicle, despite that the policy was procured by fraud and rescinded. Luckily for the insurer, the Court held that the insurer was only responsible for the amount of coverage provided by the rescinded policy, which was $5,000 less than the $15,000 per person/$30,000 per ... Keep Reading »
Automobile
Telematics and Usage-Based Insurance: Benefits, Challenges, and the Future
The NAIC's Center for Insurance Policy and Research (CIPR) released a white paper in March 2015 providing an excellent overview of the brave new world of automobile "telematics" data and their use in premium rate-making by auto insurance. Telematics allow for the measurement of actual driving habits, through remote access to a vehicle's real-time driving data. Thus, a driver's actual experience can be studied in data transmitted from, for example, the vehicle's ... Keep Reading »
Change is in the Air: New Jersey Justices Hold Their Noses While Siding with Insurer in UM Disputes
On February 18, 2015, the Supreme Court of New Jersey issued separate opinions in two first-party, uninsured motorist cases against the same auto insurer. Plaintiffs in both cases alleged that the insurer had acted in bad faith by forcing the insured to trial after losing an arbitration. The insurer won both cases, on the ground that its position each time had been "fairly debatable" as a matter of law. But New Jersey’s high court also suggested, in both cases, that ... Keep Reading »
Cooperate, Or Else
Cooperation is key. Or so says the 10th Circuit at least, in addressing an appeal from a district court's dismissal of an insured's action in which he failed to cooperate with his insurer's claim investigation. The 10th Circuit held that the insured, Kelly Bryant ("Bryant"), had not clearly demonstrated that the insurance company, Sagamore Insurance Company ("Sagamore"), breached its contract or otherwise acted unreasonably and in bad faith when it denied Bryant's claim ... Keep Reading »
California Bans Use of Price Optimization
Yesterday California Insurance Commissioner Dave Jones became the latest voice in a growing chorus of state insurance regulators who condemn the use of "Price Optimization" as a mechanism for adjusting property-casualty insurance rates and pricing. In a Notice delivered to more than 750 P&C insurers, the Commissioner declared that "any use of Price Optimization in the ratemaking/pricing process or in a rating plan is unfairly discriminatory in violation of ... Keep Reading »
Carhops and Cash Deposit Bags: Insurer Skates From the “Dual Purpose” Doctrine
For many, Sonic Drive-In restaurants stir thoughts of juicy burgers, neon-blue sodas, ‘50s rock ‘n’ roll, and roller-skating carhops. Recently, however, in Hudson Specialty Insurance Company v. Brash Tygr, LLC, Nos. 13-1688, 13-1742 (8th Cir. Oct. 7, 2014), the Eighth Circuit Court of Appeals served up an opinion in a commercial insurance coverage dispute with a little less flavor and fanfare, in analyzing the proper application of the "dual purpose" doctrine in the ... Keep Reading »
If it Races like a Tortoise: Connecticut Deconstructs a Policyholder
From Zeno of Elea to the Washington Nationals, images of racing have ceaselessly troubled Western thought. But as ancient metaphysics has given way to philosophy of language, the questions we ask ourselves have changed. In Sonson v. United Services Auto. Ass'n No. 35890 (Conn. Ct. App. Sept. 16, 2014), an automobile policyholder had to show that a "racing" exclusion did not apply, so he argued that Achilles could never overtake the tortoise if he was not "competing ... Keep Reading »
Federal Judges in Brooklyn are Making it Easier to Pursue Fraud Claims Against No-Fault Medical Providers
I was bawn in Williamsboig," he says. "An’ I can tell you t’ings about dis town you neveh hoid of." - Thomas Wolfe The Eastern District of New York, which includes the New York City Boroughs of Brooklyn and Queens, has been home to some of the most colorful no-fault insurance scams in living memory. In March, a Queens attorney entered a guilty plea in what the Government describes as “the largest single no-fault automobile insurance fraud scheme ever charged”—an ... Keep Reading »
Oregon Supreme Court Addresses Attorneys’ Fees for Appellate Proceedings in Class Action Over Automated Review of Medical Bills
Strawn v. Farmers Insurance Co. of Oregon is a class action that challenged the insurer’s use of automated bill review systems to determine the reasonableness of medical claims submitted under the Personal Injury Protection (PIP) coverage of automobile policies. The plaintiff alleged that Farmers had promised to pay the “reasonable” cost of covered medical services, but had failed to do so. In May 2011, the Supreme Court of the State of Oregon ruled that a class could ... Keep Reading »
Ripeness Is All: Illinois Court Effectively Forbids Interlocutory Review of Arbitrators’ Discovery Orders
An Illinois Appellate Court has taken the next step in limiting the role of courts in insurance arbitrations. In Klehr v. Illinois Farmers Insurance Co., No. 1-12-1843 (Ill. App. Ct., First Dist. Jan. 22, 2013), the plaintiff tried to obtain interlocutory review of an arbitrator’s discovery order by filing an action for a declaratory judgment. Addressing what it declared to be a question of first impression nationally, the Appellate Court dismissed the action, on the ... Keep Reading »