Consumers routinely call to file a complaint about denied homeowners insurance claims in which the problem is that they just discovered a long term problem. These tend to be things like mold, rot, mildew or deterioration.
The problem for these homeowners is that Insurance is designed to cover sudden and accidental damage, but not wear and tear for home care and maintenance that any homeowner is expected to address on their own. Some policies may allow coverage for damage caused within a matter of weeks -- and they may mean that plural literally, as in just two weeks -- to be considered sudden and accidental.
Generally, an insurer will inspect the damage to determine if it could have been caused suddenly or over a period of time. An example is mold damage that resulted from a leaking hot water heater, or a refrigerator water line that's been leaking, slowly rotting the kitchen floor joists.
The upshot is this: the longer an underlying problem has existed, the harder it is to successfully claim that the damage was sudden.
Update (9/25/2012): Here's a classic case of this sort of problem.
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Sunday, July 19, 2015
Saturday, July 18, 2015
Rule making starts for essential health benefits
In 2014, when the rest of the Affordable Care Act kicks in, all health plans - whether they're sold inside the new online health exchange or outside - will be required to cover certain essential health benefits.
The essential health benefits will be based on the largest health plan in the small employer market -- Regence's Innova plan and must include all current state mandated benefits.
Specific coverages and any gaps that need to be filled will be determined through the rule making process started earlier this month, but all plans must include the following categories:
The essential health benefits will be based on the largest health plan in the small employer market -- Regence's Innova plan and must include all current state mandated benefits.
Specific coverages and any gaps that need to be filled will be determined through the rule making process started earlier this month, but all plans must include the following categories:
- ambulatory patient services
- emergency services
- hospitalization
- maternity and newborn care
- mental health and substance abuse disorder services - including behavioral health treatment
- prescription drugs
- rehabilitative and habilitative services and devices
- laboratory services
- preventive and wellness services
- chronic disease management
- pediatric services, including oral and vision care
OIC website, online services are up and running
The Office of the Insurance Commissioner's website, www.insurance.wa.gov, and online services are available after a widepread outage at Consolidated Technology Services, which hosts many state websites and applications. The outage started early this morning and affected several external and internal state agency websites and services.
OIC website, online services are down
OIC's website, www.insurance.wa.gov, is unavailable at this time. That includes our services for insurance licensees. The state agency that hosts our site and applications, Consolidated Technology Services, is aware of the issue and is working on it. We appreciate your patience while we work with CTS to bring back our online services.
If you need to reach us, please call our consumer hotline at 1-800-562-6900.
We will post updates on our social media:
If you need to reach us, please call our consumer hotline at 1-800-562-6900.
We will post updates on our social media:
Round 2 of Henry v. Gore Mutual, Claimant Wins Again
The Court of Appeal has released its decision in Henry v. Gore Mutual, unanimously upholding the motion judge’s decision on the meaning of the “economic loss” threshold under the post-September 1, 2010 SABS.
Henry v. Gore Mutual was the first court decision to deal with the SABS definition of "incurred expense" which was introduced on September 1, 2010.
Justice Ray found that as long as a family member providing attendant care sustains "an" economic loss, regardless of the amount of the loss, presuming the injured person pays, promises to or is obliged to pay for the attendant care, the insurer must pay "all reasonable and necessary attendant care".
In this case the actual economic loss was just over $2,000.00 per month. The family was claiming $6,000.00 as determined by a Form 1 submitted to the insurer. The Court found that test of "economic loss" was a threshold finding for there to be an "incurred expense", "but is not intended as a means of calculating the quantum of the incurred expense".
The Court of Appeal agreed with the motion judge and dismissed Gore’s appeal. The Court held that under the SABS, economic loss serves as a threshold for entitlement to (and not as a measure or factor in quantifying the amount of) reasonable and necessary attendant care benefits to be paid by an insurer. The Court of Appeal refused to provide its own definition of “economic loss” despite Gore’s request to do so.
So what is the impact of these decisions?
I have been told by some in the insurance industry that the benefit payments are intended to be limited to the family member's economic loss. I've also been advised by the plaintiff bar that if a family member used $5 in gas to travel to the claimant then it allows them to claim the full attendant care benefit.
For almost several years I've expressed the view that neither of these interpretations would likely prevail. The intent of the SABS drafting was not to limit payments to the amount of the economic loss. If it had been different language would have been used. In fact during consultations on the Regulation in 2010, some insurers were concerned that the proposed definition was unfair if it limited family members from being compensated for providing attendant care services.
However, to suggest that any economic loss, even the most trivial one, would trigger thousands of dollars in benefit payments would also be contrary to the intent of the Regulation. In fact such an interpretation would make the definition meaningless. Justice Ray recognized that the drafters had intended to exclude non-professional caregivers if they did not incur an economic loss. In his decision he is clear that they type of economic loss that would trigger benefit payments was lost income.
However I am sure there will be lawyers that will take the arguments made in Henry v. Gore Mutual and try to extend it to other economic losses not just income loss. They may even suggest that the $5 in gas consumed to travel to the claimant qualifies as an economic loss under the definition. For now we have to rely on the courts to follow the original intent of the provision.
Henry v. Gore Mutual was the first court decision to deal with the SABS definition of "incurred expense" which was introduced on September 1, 2010.
Justice Ray found that as long as a family member providing attendant care sustains "an" economic loss, regardless of the amount of the loss, presuming the injured person pays, promises to or is obliged to pay for the attendant care, the insurer must pay "all reasonable and necessary attendant care".
In this case the actual economic loss was just over $2,000.00 per month. The family was claiming $6,000.00 as determined by a Form 1 submitted to the insurer. The Court found that test of "economic loss" was a threshold finding for there to be an "incurred expense", "but is not intended as a means of calculating the quantum of the incurred expense".
The Court of Appeal agreed with the motion judge and dismissed Gore’s appeal. The Court held that under the SABS, economic loss serves as a threshold for entitlement to (and not as a measure or factor in quantifying the amount of) reasonable and necessary attendant care benefits to be paid by an insurer. The Court of Appeal refused to provide its own definition of “economic loss” despite Gore’s request to do so.
So what is the impact of these decisions?
I have been told by some in the insurance industry that the benefit payments are intended to be limited to the family member's economic loss. I've also been advised by the plaintiff bar that if a family member used $5 in gas to travel to the claimant then it allows them to claim the full attendant care benefit.
For almost several years I've expressed the view that neither of these interpretations would likely prevail. The intent of the SABS drafting was not to limit payments to the amount of the economic loss. If it had been different language would have been used. In fact during consultations on the Regulation in 2010, some insurers were concerned that the proposed definition was unfair if it limited family members from being compensated for providing attendant care services.
However, to suggest that any economic loss, even the most trivial one, would trigger thousands of dollars in benefit payments would also be contrary to the intent of the Regulation. In fact such an interpretation would make the definition meaningless. Justice Ray recognized that the drafters had intended to exclude non-professional caregivers if they did not incur an economic loss. In his decision he is clear that they type of economic loss that would trigger benefit payments was lost income.
However I am sure there will be lawyers that will take the arguments made in Henry v. Gore Mutual and try to extend it to other economic losses not just income loss. They may even suggest that the $5 in gas consumed to travel to the claimant qualifies as an economic loss under the definition. For now we have to rely on the courts to follow the original intent of the provision.
Friday, July 17, 2015
Statement on U.S. House vote re: delaying the individual mandate
Note: The U.S. House of Representatives is scheduled to vote today on a bill that would delay for a year the individual mandate requiring most Americans to have health coverage starting in 2014. The penalty for not having coverage next year would be $95 or 1 percent of income, whichever is greater.
Statement from Washington Insurance Commissioner Mike Kreidler:
“Delaying the mandate would be unwise. This is an issue of personal responsibility. It’s unfair for people who can afford coverage to not have it, and to expect the rest of us to cover the cost of their care if they become seriously sick or injured. ”
“A critical part of the Affordable Care Act was the provision requiring that insurers take all applicants. No more screening out people because they have pre-existing medical conditions. But to make that work, you have to have as many people as possible in the insurance pool.
“Without an individual mandate to have coverage, people would likely just buy insurance when they knew they needed it. That’s like letting people get homeowners insurance only when their house catches fire.”
Statement from Washington Insurance Commissioner Mike Kreidler:
“Delaying the mandate would be unwise. This is an issue of personal responsibility. It’s unfair for people who can afford coverage to not have it, and to expect the rest of us to cover the cost of their care if they become seriously sick or injured. ”
“A critical part of the Affordable Care Act was the provision requiring that insurers take all applicants. No more screening out people because they have pre-existing medical conditions. But to make that work, you have to have as many people as possible in the insurance pool.
“Without an individual mandate to have coverage, people would likely just buy insurance when they knew they needed it. That’s like letting people get homeowners insurance only when their house catches fire.”
State of emergency declared in 20 Washington counties due to wildfires
The Seattle Times today reported a wildfire is burning more than 1,000 acres near Leavenworth and Chelan County, which has led to a 35-mile closure of Highway 2 and created a large plume of smoke visible from downtown Seattle on Wednesday. Check road closures and traffic information at the Washington State Department of Transportation website. There is a statewide burn ban on Department of Natural Resources (DNR) land until Sept. 30.
According to DNR, Western Washington is at moderate risk of wildfire and most of Eastern Washington is at high risk. Here are some tips for preparing for wildfire risk:
According to DNR, Western Washington is at moderate risk of wildfire and most of Eastern Washington is at high risk. Here are some tips for preparing for wildfire risk:
- Check your policy to make sure damage from wildfires is covered. Some policies include some coverage for emergency shelter, such as a hotel, if a home is uninhabitable.
- Review your policy to make sure you have enough coverage. Things like fine art, jewelry and computer equipment may have limited coverage under a standard policy. But you can buy special coverage that gives you more protection for those types of items, called a rider. Contact your insurance agent or broker to ask about supplemental policies.
- Catalog your home’s belongings in case you need to make an insurance claim. The National Association of Insurance Commissioners has a printable home inventory checklist or you can try free iPhone/iPad or Android apps.
- Read some tips to prepare and protect your home.
- You can help protect a rural home and limit the danger by clearing a natural fire break between your home and surrounding trees, brush and uncut fields. The Federal Emergency Management Agency has information on how to protect yourself and your home before, during and even after a wildfire.
- Have an emergency kit and a family communication plan. Know the location of your valuable papers, including insurance policy and contact information, mementos and anything you can't live without, so you can evacuate with them, if needed.
- Here's a list of recommended emergency supplies to keep on hand in the case of an evacuation.
- Don’t forget about planning for your pets. Ready.gov has tips for pet owners.
- The Washington Department of Natural Resources has the most recent fire information available on its website and through the @waDNR_fire Twitter feed.