Category Archives: Insurance Coverage

Do You Need Pet Insurance for Buddy?

13 Wednesday Apr 2011

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Veterinary bills are increasing much faster than the overall rate of inflation. Part of this reason lies in the advancements of medical techniques and the increasing number of veterinarian specialists. These trends, however, come at a price. For example, performing a magnetic resonance imaging (MRI) exam on the spine of a cat can cost upwards of $2,000. Removing a tumor on a dog can cost $4,000, and implanting a pacemaker can cost over $7,500. Even dealing with a dislocated ankle can run you around $5,000.

As a result, pet insurance sales are increasing rapidly. Is this a wise purchase? Much of the decision depends on how you view your pet. If you are emotionally close to your pet and see it as a loving family member who is nearly irreplaceable, then consider the following questions. If the answer to any of the questions below is yes, you should look into purchasing this coverage.

  • Are you willing to go into debt to provide health care for your pet?
  • Are you on a fixed or limited income?
  • Would you be willing to spend over $5,000 to save your pet in a life-threatening situation?

If you decide to purchase this protection, you should carefully compare the rates and policy provisions of at least three well-established pet insurers.

Get more personal lines insurance and risk management tips and ideas from IRMI.

Copyright 2011
International Risk Management Institute, Inc.

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Actual Notice Required to Trigger Duty to Defend

25 Friday Mar 2011

Posted by in Insurance, Insurance Coverage, NC Court of Appeals, NC Law

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Insurers need actual notice to require a duty to defend. If you are an insured and you have been served with a lawsuit the first thing you need to do is notify your insurer in writing. If you fail to notify your insurer you will have to prove to the court that you had a good faith reason for the failure. This is becoming harder and harder to do. Great American Ins. Co. v. C.G. Tate Construction Co., 315 N.C. 714 (1986). See also Kubit v. MAG Mutual Ins.

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Homeowner’s Insurance Does Not Cover Defective Construction « South Carolina Construction Defect Law

05 Tuesday Oct 2010

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The Sixth Circuit Court of Appeals ruled that an insurer was not obligated to pay for water damages to a condominium building because the insurance policy specifically excluded coverage for damages caused or resulting from building construction and design defects. TMW Enterprises, Inc. v. Federal Ins. Co., No. 09-1542, (6th Cir. Aug, 25, 2010). Substandard construction on an exterior wall allowed the water intrusion which resulted in damages of $4 million.

“In no case will we entertain any loss or claim that occurred or was in progress prior to the policy period inceptiondate or after the policy period expiry date shown on the Declarations.” This, and other similar language is common in policies as it implies that defective construction occurs prior to completion. While this language is in the insuring agreement, the clause discussed in the TMW case was a specific exclusion which related to substandard construction.

via Homeowner’s Insurance Does Not Cover Defective Construction « South Carolina Construction Defect Law.

NCADA’s Medical Malpractice Seminar Informative

04 Monday Oct 2010

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Last week I attended the NC Association of Defense Attorneys Medical Malpractice Seminar. I found the seminar very informative and enjoyed talking with the professionals that practice in this area.

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30th IRMI Construction Risk Conference

15 Wednesday Sep 2010

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I will be attending the 30th IRMI Construction Risk Conference, which is being held in Orlando, FL November 14-18, 2010. IRMI is a great resource for risk and insurance solutions for those in the construction industry. If you haven’t visited their website you are missing out on a wealth of information. http://www.irmi.com

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No Waiver of Sovereign Immunity

01 Wednesday Sep 2010

Posted by in Insurance, Insurance Coverage, NC Law

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The doctrine of sovereign immunity normally bars complaints against sheriffs deputies sued in their official capacity. A county

may waive sovereign immunity by purchasing liability insurance but only to the extent that coverage is provided. In N.C. a government entity can purchase liability insurance without waiving sovereign immunity. In Owen v. Haywood County, (2010) the N.C. Court of Appeals reviewed the exclusionary provision within the insurance policy, which stated that the insurance did not provide coverage to any claim where the covered person was entitled to sovereign immunity, and concluded that this particular language meant that Haywood County did not intend to waive its sovereign immunity.

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Novant sues Aetna over contract dispute – CharlotteObserver.com

10 Tuesday Aug 2010

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The parent company of Presbyterian’s health care network has sued insurer Aetna – alleging unfair competition, defamation and the misuse of trade secrets – escalating tensions between the two as they seek to negotiate a new contract.

The suit, filed in Mecklenburg Superior Court, comes a few weeks after Aetna announced it would end its contract with Novant Health on July 1 if the groups don’t reach an agreement on how much the insurer should reimburse Novant to provide medical services.

That could leave about 125,000 Charlotte-area Aetna customers out of network – and paying more out of pocket – to use Presbyterian Healthcare services. Novant, based in Winston-Salem, operates medical facilities and hospitals, serving more than 5 million people across the Carolinas and Virginia.

via Novant sues Aetna over contract dispute – CharlotteObserver.com.

Frequently Asked Questions About Car Insurance

17 Thursday Jun 2010

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I thought I would take a moment to answer some of the more frequently asked questions about car insurance. Please remember I am mainly writing about N.C. Law and the law changes frequently so you should always consult an attorney about any issue you may have.

Coverage For Damage to Others

People are always asking what is Bodily Injury or What is Uninsured Motorist Coverage… well here is the answer:

Bodily Injury: This coverage pays for an injury you cause someone else through an accident. It can pay for medical bills, rehabilitation, funeral expenses, etc…

Property Damage: This coverage pays for property damage to someone else’s car when you have caused an accident. It can pay for the actual repair cost or the cost to total out the vehicle.

Coverage For Your Damages

Collision: This coverage pays for damages when your vehicle is damaged in an accident no matter who is at fault.

Comprehensive: This coverage pays for miscellaneous damages such as fire, theft, hail damage, broken glass etc..

Uninsured Motorists Coverage (UM): This coverage pays for both physical damage and vehicle damage when someone hits your car and it turns out they do not have insurance.

Underinsured Motorists Coverage (UIM): This coverage pays for bodily injury to you when you are in an accident and the person that hits you does not have enough insurance to cover your injuries. UIM coverage does not pay for property damage.

Medical Payments Coverage: This coverage will pay for medical expenses up to your policy limits if you or an insured is injured in an automobile accident.

Insurance Rates

How Does the Insurance Company Determine My Rate?

The insurance company uses several things including your driving record. In N.C. points are assessed on your driver’s license for traffic violations and at fault accidents. If you have points on your license your insurance will be higher. Insurance companies also look at where you live and how far you drive on a daily basis. If you live in an urban area your rates are probably higher than someone that lives in the country.  If you drive the vehicle every day and for more than a few miles each way your will pay more  than you would for a weekend vehicle that is only occasionally driven. You will also pay higher rates for a vehicle that is more frequently stolen or for a vehicle that would be expensive to repair or replace.

Many of these factors you can’t control. You can however control whether you have points on your license. If you get a ticket you may want to consult an attorney who can very likely help you get it reduced rather than paying the ticket and having the points assessed.

What About Insurance Points

Insurance points are very real and they will cost you. In N.C.

Adding An Inexperienced Driver

How bad is the pain going to be when I add my teenager to my insurance policy? Unfortunately, it is going to hurt. I recently added my own teenage daughter to my policy and had sticker shock. The NC Dept of Insurance put out the following chart in a recent brochure. They based the rates on drivers with no insurance points.

If you have more questions, the N.C. Dept of Insurance puts out an excellent brochure on insurance laws in N.C. http://www.ncdoi.com/consumer/consumer_publications/automobile%20and%20vehicle/consumer%20guide%20to%20automobile%20insurance.pdf

What happens when someone other than the named insured is driving the insured’s car and has an accident?

10 Thursday Jun 2010

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INSURANCE COVERAGE

In North Carolina, the insurance contract controls whether insurance coverage exists. There are several variations in insurance policies that are directly bearing on the question of coverage in this type of situation. In order to determine whether there could be coverage a determination needs to be made as to whether the insurance policy contains “Any Person”, “Reasonable Belief” or “Permissive Use” language and whether the person driving the car (tortfeasor) was in “lawful Possession” of the vehicle.

“ANY PERSON”

Some insurance policies define the insured as “any person using your “covered auto”.  This provision provides coverage to anyone using your car. It has no limiting language, so presumably even someone who has stolen the insured’s car would be an insured and the insurance company would likely have to provide coverage to that person.

“REASONABLE BELIEF”

The analysis used to determine whether the tortfeasor had “Lawful Possession” or “Reasonable Belief” that he could use the vehicle when the accident occurred is almost identical. In Nationwide Mut. Ins. Co. v. Baer, 113 N.C. App. 517, 520 (1994), the court held that the “Reasonable Belief” exclusion included in the Nationwide insurance policy was not in conflict with the N.C. Financial Responsibility Act. The court reasoned that the exclusion requiring a person have a reasonable belief that he was entitled to use the vehicle was simply another way of determining whether a person knows that he lacks the owner’s permission to use the vehicle. In previous cases, the court had concluded that the exclusion broadens the inquiry into whether the tortfeasor had a subjective, reasonable belief that he was entitled to use the vehicle.

“PERMISSIVE USE”

However, some insurance policies particularly corporate policies contain a “Permissive Use” clause. These types of policies usually extend coverage to “any person while using the insured auto with the permission of the named insured provided his actual operation is within the scope of such permission”.

If the insurance policy in question contains the “Permissive Use” clause, the analysis of coverage is as follows:

  • First, did the insured grant permission for the tortfeasor to use the vehicle?  The permission can be either express or implied. If not there may not be coverage.
  • Secondly, did the tortfeasor exceed the scope of the permission granted? The scope of the permission can be limited temporarily, geographically, and to limited purposes. N.C. courts follow the minor deviation rule, which provides that if the use of the vehicle by the permittee is not a gross deviation of the terms then coverage will apply.

“LAWFUL POSSESSION”

The N.C. Financial Responsibility Act requires that the policy provide minimum coverage if the tortfeasor is in “Lawful Possession” of the vehicle. “Lawful Possession” basically means that the tortfeasor did not steal the vehicle. Most insurance policies do not include language regarding “Lawful Possession” however this does not prevent the insurance company from having to provide coverage if the tortfeasor was in “Lawful Possession” of the vehicle at the time of the accident. The statute will control in situations where the language of the statute and the language of the insurance policy are in conflict with each other.

CONCLUSION

Coverage analysis should begin with the insurance policy. If the policy contains “Any Person” language, there is almost certainly coverage regardless of the reason why the tortfeasor had possession of the vehicle. If the policy contains the “Reasonable Belief” language, the analysis is one-step. Did the tortfeasor have a “Reasonable Belief” that he was entitled to use the vehicle? If the answer is yes then he is likely entitled to full coverage. If the answer is no, he probably not entitled to any coverage.

If the insurance policy has a provision, regarding “Permissive Use” the coverage determination hinges on whether the individual had permission from the insured to use the vehicle and that he did not exceed the scope of that permission. If both of these elements are met, then the policy will likely provide coverage. If the individual did not have permission to the use the vehicle, you then must look the N.C. Financial Responsibility Act to determine if the individual was in “Lawful Possession” of the vehicle and therefore entitled to minimum limits coverage. For these types of analyses, you should also consult an attorney specifically one familiar with insurance law, insurance defense, and insurance coverage.

When Is A Borrowed Car Covered Under Your Automobile Insurance Policy As A Substitute Vehicle?

07 Monday Jun 2010

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Consider the following, you are a small businessperson and the vehicle

Jennifer Meyers / The Post-Standard

you normally drive is owned by and insured under your business automobile insurance policy. One day your normal vehicle, the one insured under the policy, is low on gas or maybe it needs new brakes so you borrow your wife’s car for the day. Unfortunately, you are involved in a horrible accident and incur several hundred thousand dollars worth of medical bills. The person who hits your vehicle has little or no insurance. Your wife’s vehicle has a $100,000 policy. The company policy for the vehicle you normally drive is $1million in coverage. Are you covered under your company’s automobile policy’s uninsured or underinsured motorist coverage? The answer is it depends.

Typical UIM language in an automobile policy might include the following:

B. Who is An Insured

If the named insured is designated in the Declarations as:

2. A partnership, limited liability company, corporation or any other form of organization then the following are “insured”:

a.         Anyone “occupying” a covered”auto” or a temporary substitute for a covered “auto”. The covered “auto” must be out of service because of its breakdown, repair, servicing, “loss” or destruction.

The analysis to the above hypothetical revolves around determining what is meant by out of service because of a “breakdown, repair, servicing, “loss” or destruction” of your covered auto. In Ransom v. Fidelity and Casualty Co., 250 N.C. 60 (1959), the N.C. Supreme Court held that Francis Lee who drove his brother’s car because his own car was low on gas was not covered under his insurance policy because his car was not withdrawn from normal use. In Maryland Casualty Co. v. State Farm Mutual Automobile Insurance Co., 83 N.C. App. 140 (1986), the court held that Thomas who had borrowed a truck that day did not have coverage under his insurance policy because even though his covered vehicle was rusted and worn out it was not withdrawn from normal use. However, perhaps if your insured vehicle needed repairs you would be safe to borrow another car for the day. In Martini v. Companion Property and Casualty Ins. Co. the N.C. Court of Appeals found coverage for Douglas Martini who had borrow his wife’s car for the day because his Sequoia, insured under his company policy, was in need of new brakes. The court distinguished Martini’s case from Ransom and Maryland and found the facts more in line with the decision in Nationwide v. Fireman’s Fund Ins. Co., 279 N.C. 240 (1971) which held that coverage did exist for a man who borrowed a vehicle while having his insured vehicle painted.

The moral of this story is be careful when you borrow someone else’s car that they either have adequate insurance coverage or that your own insured vehicle is truly out of service otherwise you might be left without insurance coverage.