In October, many consumers across Washington received notices from the North American Dealer Co-op (NADC). Our office ordered NADC to send out those notices.
Here’s the background: Washington car dealers would sell people vehicle service contracts, offering a money back guarantee as an incentive to buy them. If you didn’t use the vehicle service contract after a certain period of time and met other conditions, you were promised your money back.
NADC, in essence, insured that money-back guarantee. (The service contracts themselves are a separate product, and are NOT affected by our order. More on that below.) In 2007, Insurance Commissioner Mike Kreidler told the company that they were acting as an unauthorized insurer in Washington state. The company disputed that; a hearing was held and the commissioner’s decision was upheld.
In October 2010, Thurston County Superior Court Judge Thomas McPhee affirmed the order, which requires NADC to do the following things:
-Stop offering the program to any Washington auto dealers.
-Send a copy of the order to all member dealers.
-Send a copy to all Washington consumers who’d bought an NADC auto dealer extended service contract reimbursement guarantee.
-Tell consumers that should they file a valid claim against that guarantee when their extended service contract expires, it will be honored.
Here’s the critical thing to know: The underlying vehicle service contract should still be in effect. Those service contracts are a different product, covering repairs to the car. Those contracts are not affected by this order.
Our order does, however, require NADC to honor all valid money-back guarantee claims made for unused service contracts under NADC’s money-back guarantee offer.
If you’re a Washingtonian and have questions or concerns that NADC’s improperly denying your money-back claim, contact us at 1-800-562-6900.
Consumers can also contact:
North American Dealer Co-Op
1-800-637-2277
ATTN: Claims Department
1661 Wadsworth Blvd.
Lakewood, CO 80214
Tuesday, December 7, 2010
Monday, December 6, 2010
Tacoma woman pleads guilty to first-degree theft charges in insurance scam
A Tacoma woman whom repeatedly claimed to have slipped and fallen in grocery stores has pleaded guilty to first-degree theft.
Brenda J. Johnson, 50, claimed to have fallen in two different stores within about 15 minutes. She said she was near a check stand at a Tacoma Safeway store on Sept. 18, 2009 when she slipped on some liquid and fell, injuring her wrist and ribs.
On the same day at about noon, she said, the same thing happened to her in the frozen food aisle of a Tacoma Fred Meyer store. She filed claims with both stores, showing medical care and prescription drug receipts totalling more than $5,500.
A subsequent investigation by Insurance Commissioner Mike Kreidler's Special Investigations Unit found that she had submitted virtually identical medical receipts to each store, including an emergency room report missing some pages. Documents obtained through a search warrant indicated that the treatment was unrelated to a fall at either store.
The investigation also found that Johnson had filed at least five auto-accident medical claims and at least half a dozen slip-and-fall injury claims.
On Nov. 22, Johnson pleaded guilty in Pierce County Superior Court to: $6,017 in restitution, 40 hours community service, and $1,000 in court fees and costs.
Brenda J. Johnson, 50, claimed to have fallen in two different stores within about 15 minutes. She said she was near a check stand at a Tacoma Safeway store on Sept. 18, 2009 when she slipped on some liquid and fell, injuring her wrist and ribs.
On the same day at about noon, she said, the same thing happened to her in the frozen food aisle of a Tacoma Fred Meyer store. She filed claims with both stores, showing medical care and prescription drug receipts totalling more than $5,500.
A subsequent investigation by Insurance Commissioner Mike Kreidler's Special Investigations Unit found that she had submitted virtually identical medical receipts to each store, including an emergency room report missing some pages. Documents obtained through a search warrant indicated that the treatment was unrelated to a fall at either store.
The investigation also found that Johnson had filed at least five auto-accident medical claims and at least half a dozen slip-and-fall injury claims.
On Nov. 22, Johnson pleaded guilty in Pierce County Superior Court to: $6,017 in restitution, 40 hours community service, and $1,000 in court fees and costs.
Thursday, December 2, 2010
Give us your opinion on our website...
We're looking for feedback on our official website, http://www.insurance.wa.gov/. We're trying to make the site easier to understand and easier to use.
If you can spare a couple of minutes to give us your input, we'd much appreciate it. Just click on the link above and look for the "feedback" tab on the left. It's orange, and hard to miss.
Tuesday, November 30, 2010
Self-employed and looking for a small group health plan?
We've heard from a lot of self-employed or sole-proprietors who want to take advantage of the new group of one law but are having trouble finding a health plan.
(The new law took effect in Oct. and allows qualified self-employed people buy health insurance in the less expensive small group market.)
We think we have something that can help: We've added a direct link to the federal government's Healthcare.gov site. Just type in your zipcode and you'll get a list of health plans available in your county. Of course you can also contact an agent or broker directly, but this gives you another option. Here's the link to information we've posted on our site.
If you want to bypass our website and go straight to the place that let's you enter your zipcode - here you go
(The new law took effect in Oct. and allows qualified self-employed people buy health insurance in the less expensive small group market.)
We think we have something that can help: We've added a direct link to the federal government's Healthcare.gov site. Just type in your zipcode and you'll get a list of health plans available in your county. Of course you can also contact an agent or broker directly, but this gives you another option. Here's the link to information we've posted on our site.
If you want to bypass our website and go straight to the place that let's you enter your zipcode - here you go
Monday, November 29, 2010
Kreidler proposes health insurance rate reforms
News release issued by Washington State Insurance Commissioner today:
Insurance Commissioner Mike Kreidler is asking state lawmakers to preserve his authority to scrutinize health insurance rates, boost transparency, and to let him—for the first time—consider some insurers’ surpluses when reviewing rates.
“Some non-profit insurers have built up hundreds of millions of dollars in surpluses in recent years, while still seeking double-digit rate hikes,” said Kreidler. “I want the law changed so we can take a closer look at that, while still maintaining a vital insurance market.”
Under current law, surpluses—including investment income—cannot be taken into account when considering a company’s rate request.
Kreidler also will seek more transparency, so consumers can have a full picture on rate proposals by insurers. Today, most information included in a rate filing is not releasable to the public.
“Tens of thousands of Washingtonians who have to buy insurance on their own struggle to find and keep coverage,” said Kreidler. “We can help protect them by continuing to review rate hikes carefully. They also deserve to see how much of their insurance premium is spent on direct medical care versus administrative overhead and profit.”
Rate review: Kreidler gained the authority to review rates in the individual market in 2008, but it’s scheduled to expire after 2011. He’s proposing legislation to do away with that deadline.
Surpluses: The surplus proposal would only apply to non-profit health insurers, which account for most of the health insurance market in Washington. Also:
• Once a company amasses a surplus equal to 3 months of claims expenses, rate hikes would not be approved.
• The insurance commissioner could grant exceptions, however, if limiting the surplus or rates would pose a threat to the financial health of an insurer.
Transparency: The legislation would allow the public to see:
• What percentage of a specific rate request goes to profit, medical costs and administrative costs.
• How much, overall, a health carrier collected in premiums, how much money it made, and how much it paid out in direct medical claims.
• The medical trends the health carrier is using to project future rates.
“It’s simple: We need oversight of the health insurance industry,” said Kreidler. “And families deserve to see where their money’s going and how their rates are set.”
Insurance Commissioner Mike Kreidler is asking state lawmakers to preserve his authority to scrutinize health insurance rates, boost transparency, and to let him—for the first time—consider some insurers’ surpluses when reviewing rates.
“Some non-profit insurers have built up hundreds of millions of dollars in surpluses in recent years, while still seeking double-digit rate hikes,” said Kreidler. “I want the law changed so we can take a closer look at that, while still maintaining a vital insurance market.”
Under current law, surpluses—including investment income—cannot be taken into account when considering a company’s rate request.
Kreidler also will seek more transparency, so consumers can have a full picture on rate proposals by insurers. Today, most information included in a rate filing is not releasable to the public.
“Tens of thousands of Washingtonians who have to buy insurance on their own struggle to find and keep coverage,” said Kreidler. “We can help protect them by continuing to review rate hikes carefully. They also deserve to see how much of their insurance premium is spent on direct medical care versus administrative overhead and profit.”
Rate review: Kreidler gained the authority to review rates in the individual market in 2008, but it’s scheduled to expire after 2011. He’s proposing legislation to do away with that deadline.
Surpluses: The surplus proposal would only apply to non-profit health insurers, which account for most of the health insurance market in Washington. Also:
• Once a company amasses a surplus equal to 3 months of claims expenses, rate hikes would not be approved.
• The insurance commissioner could grant exceptions, however, if limiting the surplus or rates would pose a threat to the financial health of an insurer.
Transparency: The legislation would allow the public to see:
• What percentage of a specific rate request goes to profit, medical costs and administrative costs.
• How much, overall, a health carrier collected in premiums, how much money it made, and how much it paid out in direct medical claims.
• The medical trends the health carrier is using to project future rates.
“It’s simple: We need oversight of the health insurance industry,” said Kreidler. “And families deserve to see where their money’s going and how their rates are set.”
Tuesday, November 23, 2010
Ice, snow and cars: Filing an insurance claim
First: Unless you signed a contract with an insurance company requiring you to take your car only to a specified shop, you can choose where to take it for repair. But the shop still needs to work with the insurer to come to an agreed-upon price. If not, and they still fix the car, you may be responsible for whatever the insurer doesn't pay.
For more details on "diminished value", non-OEM parts, getting a rental car, etc., please see our "How the auto insurance claims process works" page.
If you're in a wreck and it's more than a fender-bender, you might want to see our "What happens if my car gets totaled?" page. From it:
You have the right to payment of the actual cash value of your auto, and to expect a prompt and fair settlement. Don’t be surprised if your “value amount” and the insurer’s “value amount” do not match. Be ready to negotiate with the insurer when this happens.
The page has a lot more information on how insurers establish the cash value of the totaled vehicle, what happens if you can't find a comparable vehicle, and -- we get this question a lot -- what happens if you want to keep your damaged car.
If you have questions or problems with an insurer -- we're the state agency that regulates the insurance industry in Washington state -- give us a call at 1-800-562-6900 or e-mail us at AskMike@oic.wa.gov.
Monday, November 22, 2010
No-Fault Insurance Explained
If you’re fortunate, or depending on how you look at it, unfortunate to live in one of the twelve states that are under a non-fault auto insurance system, you can cause an accident, yet your insurance company won’t pay for the other parties’ damages.
If you live in a No-fault state (DC, FL, HI, KS, KY, MA, MI, MN, NJ, NY, ND, PA, UT) that means you live in a state that both requires drivers to carry insurance for their own protection and places limitations on their ability to sue other drivers for damages. Your auto insurance company will pay for your damages (up to your policy limits), regardless of who was at fault for the accident. Any other drivers involved will be covered by their auto insurance policies. Since all are required to carry insurance, in theory, there should be no uninsured motorists in those states. Stop laughing; the term “in theory” was used!
These states opted for the no fault insurance system because it guarantees every driver immediate medical treatment in the event of an accident. Further, it's intended to reduce the legal and administrative fees associated with insurance claims. Again, in theory, this should equate to lower premiums. Unfortunately, often times the liability issues that still remain will actually drive premium costs up.
However, because no state is pure no fault, drivers can always be held financially responsible for the cost of injuries they cause in certain circumstances – that’s the loop hole. Some states allow injured parties to sue if their injuries meet certain standard for severity, while others allow it when total costs reach a certain dollar level.
Below is a classic case of a no-fault situation. Neighbor lived in a four-plex apartment building. It had a 4-stall garage along with a 4-stall wide driveway. Because the driveway was so wide it was second nature for the tenants to pull out of their parking spots and turn around in the driveway instead of backing into the street.
One Sunday afternoon, one of the tenants decided to go visit a friend. She got into her car and began backing out of the driveway in her normal manner. When all of a sudden she felt a bump and heard a scream. At first she thought she ran over her cat who would occasionally escape. She opened her car door and found half of a body. Scared half out of her mind, she shut the car off and ran into the house and immediately called 911.
The driver was too scared to go outside at that point. As far as she knew, the half body, belonging to one of her neighbors, was still under the car and the driver was certain the injuries were serious. Her left rear wheel had crossed her body from her thigh on one side on the diagonal to above her pelvic region. The driver later learned that some strong man from across the street came over and picked up the car so she could get out from underneath.
The neighbor announced that she was feeling fine and didn’t want to go to the hospital. But the police and ambulance didn’t feel the same way so they took her the four blocks to the hospital. Turns out the neighbor was sunbathing behind her car and somehow the driver didn’t see her when she walked to her car. She ended up with no broken bones, no internal injuries; just a tire track from her right thigh across to her left stomach.
The driver felt absolutely terrible, accepted full responsibility, wanted to do everything and more to make it up to her. The next day, the driver phoned the insurance company to explain to them what had happened. They asked her two questions. #1 Does she drive? (yes) and #2 Does she own a car? (yes). The insurance company informed the driver that due to No Fault insurance the neighbor’s own car insurance would have to cover the medical costs. The driver was clearly at fault, yet the driver’s insurance wouldn’t cover the damages even though it was her fault.
The driver went as far as to tell the neighbor to sue her since it was her fault and she felt totally responsible. The neighbor merely responded, “It was just an accident.” The lesson here - next time lay on the grass, instead of the drive way to sunbathe and risk the doggy doo.
Interesting No-Fault system, wouldn’t you say?
If you live in a No-fault state (DC, FL, HI, KS, KY, MA, MI, MN, NJ, NY, ND, PA, UT) that means you live in a state that both requires drivers to carry insurance for their own protection and places limitations on their ability to sue other drivers for damages. Your auto insurance company will pay for your damages (up to your policy limits), regardless of who was at fault for the accident. Any other drivers involved will be covered by their auto insurance policies. Since all are required to carry insurance, in theory, there should be no uninsured motorists in those states. Stop laughing; the term “in theory” was used!
These states opted for the no fault insurance system because it guarantees every driver immediate medical treatment in the event of an accident. Further, it's intended to reduce the legal and administrative fees associated with insurance claims. Again, in theory, this should equate to lower premiums. Unfortunately, often times the liability issues that still remain will actually drive premium costs up.
However, because no state is pure no fault, drivers can always be held financially responsible for the cost of injuries they cause in certain circumstances – that’s the loop hole. Some states allow injured parties to sue if their injuries meet certain standard for severity, while others allow it when total costs reach a certain dollar level.
Below is a classic case of a no-fault situation. Neighbor lived in a four-plex apartment building. It had a 4-stall garage along with a 4-stall wide driveway. Because the driveway was so wide it was second nature for the tenants to pull out of their parking spots and turn around in the driveway instead of backing into the street.
One Sunday afternoon, one of the tenants decided to go visit a friend. She got into her car and began backing out of the driveway in her normal manner. When all of a sudden she felt a bump and heard a scream. At first she thought she ran over her cat who would occasionally escape. She opened her car door and found half of a body. Scared half out of her mind, she shut the car off and ran into the house and immediately called 911.
The driver was too scared to go outside at that point. As far as she knew, the half body, belonging to one of her neighbors, was still under the car and the driver was certain the injuries were serious. Her left rear wheel had crossed her body from her thigh on one side on the diagonal to above her pelvic region. The driver later learned that some strong man from across the street came over and picked up the car so she could get out from underneath.
The neighbor announced that she was feeling fine and didn’t want to go to the hospital. But the police and ambulance didn’t feel the same way so they took her the four blocks to the hospital. Turns out the neighbor was sunbathing behind her car and somehow the driver didn’t see her when she walked to her car. She ended up with no broken bones, no internal injuries; just a tire track from her right thigh across to her left stomach.
The driver felt absolutely terrible, accepted full responsibility, wanted to do everything and more to make it up to her. The next day, the driver phoned the insurance company to explain to them what had happened. They asked her two questions. #1 Does she drive? (yes) and #2 Does she own a car? (yes). The insurance company informed the driver that due to No Fault insurance the neighbor’s own car insurance would have to cover the medical costs. The driver was clearly at fault, yet the driver’s insurance wouldn’t cover the damages even though it was her fault.
The driver went as far as to tell the neighbor to sue her since it was her fault and she felt totally responsible. The neighbor merely responded, “It was just an accident.” The lesson here - next time lay on the grass, instead of the drive way to sunbathe and risk the doggy doo.
Interesting No-Fault system, wouldn’t you say?
Friday, November 19, 2010
Issaquah woman sentenced to $300,000 in restitution in insurance fraud case
A King County Superior Court judge today ordered Issaquah's Linda Ann Rose, 67, to pay and forfeit a total of $300,000 in restitution to insurance companies for fraudulent injury claims after a minor accident in a parking lot.
On Nov. 13, 2004, Rose was involved in a parking lot collision in Issaquah. An SUV backed out of a parking stall and struck Rose's rented Ford Mustang. Photos of both vehicles show minimal damage, but Rose claimed that she suffered severe back injuries as a result of the collision.
In 2007, her attorney demanded $656,874 from the SUV owner's insurer, and subsequently filed a personal injury lawsuit in the case.
Investigators from the Washington Insurance Commissioner Mike Kreidler's Special Investigations Unit subsequently concluded that Rose knowingly provided altered medical records to her attorney, and that she had had an injured back "well before" the accident.
Rose entered a modified guilty plea to 3 felony counts of using false claims or proof in an insurance claim.
She was ordered to pay $250,000 to Progressive, $25,000 to Metlife, and to forfeit another $25,000 in a structured settlement from Metlife that had not yet been paid.
On Nov. 13, 2004, Rose was involved in a parking lot collision in Issaquah. An SUV backed out of a parking stall and struck Rose's rented Ford Mustang. Photos of both vehicles show minimal damage, but Rose claimed that she suffered severe back injuries as a result of the collision.
In 2007, her attorney demanded $656,874 from the SUV owner's insurer, and subsequently filed a personal injury lawsuit in the case.
Investigators from the Washington Insurance Commissioner Mike Kreidler's Special Investigations Unit subsequently concluded that Rose knowingly provided altered medical records to her attorney, and that she had had an injured back "well before" the accident.
Rose entered a modified guilty plea to 3 felony counts of using false claims or proof in an insurance claim.
She was ordered to pay $250,000 to Progressive, $25,000 to Metlife, and to forfeit another $25,000 in a structured settlement from Metlife that had not yet been paid.
Thursday, November 18, 2010
Flood coverage: Where to find it -- and what if you can't?
November in the Pacific Northwest generally means rain, and lots of it. (See also December, February, March, April and sometimes May.)
As the rivers swell, we tend to get nervous queries from consumers and businesses about flood insurance. Here are the basics, as well as some special information for businesses in Washington state's Green River Valley.
Does a standard homeowners' insurance cover flooding? No. Many people think it does. It does not.
Where do I get flood coverage? For most consumers and many businesses, the first stop is the National Flood Insurance Program, a federally run program that's been around for decades. But the business coverage maxes out at $500,000 per building and $500,000 for contents, so businesses may need extra coverage as well.
What's it cost? The average federal flood insurance policy costs less than $570 per year.
Am I in a flood zone? Here's a page to search flood maps. You can also get a quick risk estimate by typing your address into the feds' "one-step flood risk profile."
I heard that the federal flood insurance program was suspended. It was, but isn't anymore. The program lapsed several times this year, but Congress in late September reauthorized the program for another year.
Who sells it? Although it's a federally run program, it's sold by many insurance agents. To find a local one who sells it, see the program's agent locator.
And here's the special information for businesses in Washington's Green River Valley, which is in south King County. Last year, businesses in the area reported problems finding additional coverage. To help, we set up a "market assistance plan" that acts as a matchmaker between businesses and insurers. If you live in that area and can't find coverage for your business, the odds are good that the market assistance plan can help you.
For more, please see our flood information page.
As the rivers swell, we tend to get nervous queries from consumers and businesses about flood insurance. Here are the basics, as well as some special information for businesses in Washington state's Green River Valley.
Does a standard homeowners' insurance cover flooding? No. Many people think it does. It does not.
Where do I get flood coverage? For most consumers and many businesses, the first stop is the National Flood Insurance Program, a federally run program that's been around for decades. But the business coverage maxes out at $500,000 per building and $500,000 for contents, so businesses may need extra coverage as well.
What's it cost? The average federal flood insurance policy costs less than $570 per year.
Am I in a flood zone? Here's a page to search flood maps. You can also get a quick risk estimate by typing your address into the feds' "one-step flood risk profile."
I heard that the federal flood insurance program was suspended. It was, but isn't anymore. The program lapsed several times this year, but Congress in late September reauthorized the program for another year.
Who sells it? Although it's a federally run program, it's sold by many insurance agents. To find a local one who sells it, see the program's agent locator.
And here's the special information for businesses in Washington's Green River Valley, which is in south King County. Last year, businesses in the area reported problems finding additional coverage. To help, we set up a "market assistance plan" that acts as a matchmaker between businesses and insurers. If you live in that area and can't find coverage for your business, the odds are good that the market assistance plan can help you.
For more, please see our flood information page.
More from our case files...
Having trouble with an insurance company, agent or broker? Give us a call; we can often help. We're the government agency that regulates the insurance industry in Washington state. (If you don't live in Washington, here's an easy map with contact info for our counterparts in your own state.)
In Washington state, we're at 1-800-562-6900 or AskMike@oic.wa.gov. You can now also file a complaint easily online.
Here's a sampling of the sorts of things we help with virtually every day:
In Washington state, we're at 1-800-562-6900 or AskMike@oic.wa.gov. You can now also file a complaint easily online.
Here's a sampling of the sorts of things we help with virtually every day:
- A woman contacted us on behalf of her 75-year-old mother, who had forgotten to pay her long-term care insurance premium due to health issues. The company had cancelled the policy for non-payment. After multiple attempts to have the policy reinstated, the daughter sought our help. The policy was reinstated.
- A company that had sold an illegal discount health plan here agreed to pay a consumer $3,825.
- A widow whose annuity request had been delayed complained to us. We contacted the company, which honored the request, sending her a check for more than $250,000.
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