Archive for March, 2010

Car Insurance; Insurance Coverage; Uninsured,Underinsured

March 16, 2010

Do you assume that if your car is  hit by another car the other driver has insurance?

Don’t. Your assumption may be wrong.  More and more people are driving without insurance or driving with minimum insurance coverage.

If you or your loved-ones get hurt in a car accident and the other driver has no insurance then your healthcare insurance covers the medical costs. Who pays for your lost wages and pain and suffering.  No one and most people do not have sufficient assets for you to attach in order to satisfy a jury award.

You also may be driving without medical insurance .

There is a relatively inexpensive way for you to be adequately insured from the carelessness and fiscal neglect of other drivers.

Uninsurance and Underinsurance.

You can buy from the own insurance company that covers your car an optional coverage that most brokers do not discuss:

a. uninsurance: you pay a little extra premium per year and buy insurance if you are hurt in an accident and the other driver has no insurance.

b. underinsurance: you pay a little extra premium per year and buy insurance if you are hurt in an accident and the other driver does not have sufficient insurance to pay for all your damages.

These premiums are modest and you will no longer be at the mercy of strangers to guarantee there is enough insurance to pay for your medical expenses, lost wages, pain and suffering, and disability and those of your passengers.

Arthur F. Licata

Insurance and Liens: Medical Insurance Reimbursement

March 10, 2010

Insurance and Liens; Medical Insurance Reimbursement.

Do you know what a lien is?

It is the right by someone or something to be reimbursed from your personal injury settlement or jury award.

Here’s a secret that most people are shocked to learn:

ALL the money that your medical insurance company and/or Medicare or Medicaid pay as a result of a personal injury must be reimbursed before the case can be settled or a jury verdict paid.

Despite the fact that you paid the premiums for your medical insurance you still  must reimburse the medical insurance companies. If you collect any money for a personal injury for which the medical insurance companies paid money to your healthcare providers,then the medical insurers are entitled to be reimbursed.

An attorney commits malpractice if he settles a case and disburses the money without also paying the liens on the case.

Reimbursement and the system that controls it can prevent a case from settling and always makes settling a case more difficult.

let’s take an example for explanation purposes:

Suppose your attorney has been negotiating with the insurance company that provides liability insurance for the car that struck and injured you.

You have an offer to settle the case for $10 ( to simplify the example).

Your healthcare insurers and/or Medicare or Medicaid have a lien on your case tobe reimbursed for the money they spent paying your medical expenses. The liens total $5.

Your attorney is entitled to 1/3 of the gross amount of the settlement= $3.33

In this scenario the case would be almost impossible to settle because the plaintiff, the injured party, would net $10 minus $8.33 = $1.67.

The plaintiff would recover less than the attorney or the healthcare provider.

It is very difficult to negotiate a reduction of these liens. It can be done but it is highly unlikely that the liens will be waived completely.  As you may imagine, the interests of the plaintiff and his or her medical insurers are frequently at odds. The insurers are stubborn and many times unrealistic in their demands to be reimbursed.

The negotiations are frequently antagonistic and often prolonged.

The only way to get the plaintiff more money is to either increase the settlement amount or reduce the liens or both.

As you can see, to paraphrase an insurance company advertisement, the last time you were in good hands is when you paid your insurance premiums.

by Arthur F. Licata, Esq.

website: www.alicata.com

e-mail: arthur@alicata.com

telephone; 617-523-9977

Anatomy of a Personal Injury Lawsuit

March 3, 2010

Insurance is the key ingredient in a law suit.
Is there insurance to cover a settlement or jury verdict? How much insurance? Who controls the insurance -the insurance company or the insured? Even the particular insurance company covering the loss makes a difference. Each of them have their own personalities and levels of competence or incompetence. The adjuster’s experience and expertise is usually very important. Can they recognize a serious case and give it the attention it deserves or are all her cases handled on an  assembly line basis with her operative word being “NO.”

For that matter, do you understand the business plan of insurance companies?  If you do not then you are missing the vital story between the lines.

An adjuster does not get rewarded for giving out money. The claims department is the tail o f the insurance dog. The real business acumen and financial expertise are  found in the underwriting department (where a value, in dollars, is put on every case) and the investment department. The finance  part of the company is where the real business of investing premiums and profiting from this investment activity is carried on. Profit is not earned from merely collecting the premiums.

A claims department is a necessary evil in order to have the opportunity to collect premiums, invest the money and hold onto the money for as long as it can in order to maximize the return on investment. This is why most serious cases settle at the courthouse steps. The insurance company would rather keep the money it has set aside for the particular case (underwriting) invest the money along with the premiums and only consider paying out in a settlement after earning as much as it can from its investments in stocks and bonds.

A very succinct explanation of these investment decisions and practices was recently discussed in the annual 2009 letter of Warren Buffett. He is chairman of Berkshire Hathaway. It is one of the biggest companies in the U.S. and owns some of the largest and most financially successful insurance companies in the world. This is what he has written on page 6 of the annual report released last Saturday:

“Insurers receive premiums up front and pay claims latter. In extreme cases, such as those arising from certain workers’ compensation accidents, payments can stretch over decades. This collect now, pay later model leaves us holding large sums-money we call ‘float’ -that will eventually go to others.

Meanwhile,we get to invest this float for Berkshire’s benefit. Though individual policies and claims come and go, the amount of float we hold remains remarkably stable in relation to premium volume.  Consequently, as our business grows, so does our float.

If premiums exceed the total of expenses and eventual losses, we register an underwriting profit that adds to the investment income produced by the float. This combination allows us to enjoy the use of free money and better yet, get paid for holding it. ”

No wonder adjusters are encouraged to just say no. The strategy is to keep the money as long as it can, invest it and simultaneously use time and delay as a bludgeon to wear down the resolve of the plaintiff and his attorney.

There is a very clever method to their madness.

Casualty insurance companies and their claims adjusters are not encouraged to fairly , justly and reasonably settle meritorious accident claims.  If they did there would be less float to invest and less investment income to earn.

by Arthur F. Licata,

Listed as a New England Super Lawyer, see October 2009 Boston Magazine, and www.Superllawyers.com

e-mail: arthur@alicata.com

website: www.alicata.com

Discovery

March 1, 2010

Let’s assume that you have selected an attorney.

you have signed a contingent fee contract.

the liability in your case is reasonably clear.

the damages have been documented and sent to the insurance adjuster for evaluation.

your attorney corresponds with the insurance representative & suggests mediation.

the insurance adjuster says “No.”

your attorney as a result commences the lawsuit.

now what happens?

Discovery. a legal term that means in laymen’s language the right of each side, according to court rules has a right to request and obtain information from the other side.

the usual tools of discovery are some of the following:\

1. interrogatories-a list of written questions to find out all the factual information the other side knows, e.g., how the accident happened, names and addresses of witnesses, medical records, medical bills, and insurance coverage, etc.

2. depositions: oral testimony recorded by a professional stenographer and testified under oath. it is similar to trial testimony but takes place in an attorney’s office. This is an opportunity to find out what the witnesses know, don’t know, and may be guessing. A transcript is prepared for each side and the deposition transcripts are what holds the testimony of witnesses at trial to what they said in their deposition. If a witness testifies at trial in contradiction to his deposition testimony then the deposition transcripot can be used to “impeach” , that is , undermine the witness’ credibility for telling the truth. “So, Mr. Witness, when were you telling the truth / When you were deposed or now here in this courtroom in front of the jury. Let me read to you what you said  at your deposition,do you agree that what you said then contradicts what you are saying now. do you remember swearing an oath to tell the truth at the deposition/

Do you remember taking the same oath to tell the truth in the courtroom.

the truth is you are lying and are not very good at it.”

All the key witnesses must be deposed; factual witnesses, medical doctors, other healthcare providers, opposing witnesses including all defendants and their or its employees and scientific and technical experts.

sometimes the witnesses are out-of-state and the attorneys must travel to the witnesses domicile and make specific arrangements for these people to be deposed and recorded by a stenographer available in the city where the witnesses live or work.   Discovery becomes a significant part of the expenses in the case’s preparation.

by Arthur F. Licata,

contact him at www.alicata.com

or e-mail at arthur@alicata.com